Saturday, May 30, 2009

Zim gold output plunges by nearly 50%


Gold as money.


The people in the video buy a loaf of bread for 0,1 gram of gold. (US$ 979/31.1 gr) : 10 = app US$ 3,15/loaf which makes the loaf very expensive or the gold extremely cheap.

Entrepreneurs know what to do.....

Zim gold output plunges by nearly 50%


Mail&Guardian: 30.05.09

Zimbabwe's gold production fell by 49% last year due to an adverse operating environment and lack of working capital, the Chamber of Mines announced on Friday.


"During the year 3 576kg was produced compared to 7 017kg reported in 2007, a decline of 49%," according to the Chamber of Mines annual report.

"The performance of the Zimbabwean mining industry in 2008 is best described as dismal and gloomy," said David Murangari, Chamber of Mines president, at organisation's annual general meeting.

Prime Minister Tsvangirai who also attended the meeting, however, said the mining sector presented the country with the most immediate opportunity to attract significant investment.

The "government has a window of opportunity to prepare a conducive policy environment by mid 2010 ... that could see Zimbabwe's mineral sector attracting between six billion [US] dollars and 16-billion [US] dollars in exploration and mine development investment during 2011-2018 period," he said.

The report said the major cause of the decline in production was the restricted working capital for production.

"Most mines operated under extremely difficult macroeconomic conditions for the first nine months of the year. Most importantly, there is dire need for recapitalisation of the industry ... the current world recession was something that we in Zimbabwe had not anticipated," said Murangari.

Gold sector earnings during the first six months of the year also declined to $62,1-million compared to $93,5-million earned the previous year.

Although gold sector earnings have declined, platinum production increased by 8,5% in 2008 compared to 2007.

Annual platinum production increased from 5 085,74kg in 2007 to 5 495,10kg in 2008.

Thursday, May 28, 2009

South Korean Troops on high alert after North Korean threat


North Korean Army Babes: Now via Web Cam!



Update1: Kaboom?


Update2: 분수업 무료연장 이벤트 일주일무료체험수업 이벤


Update3: Pick web cam in South Korea. Maybe you're lucky!


Update4: Depending who wins: learn national anthem from North or South Korea quickly.
Also on video: North & South


Update5: 온스 : 높은 경계 태세에 북한의 위협 이후 한국의 친구들


Update6: South Korean Female Rifle Team





The Korean Herald; 29.05.2009


Troops on high alert after N.K. threat


The joint command of South Korean and U.S. troops yesterday heightened their surveillance level following the North's threat of military action.

Tension has been mounting as the North this week conducted a second nuclear test, fired missiles and warned that it is ready to strike the South.

The Combined Forces Command raised its Watch Conditions by a notch to the second highest level as of 7:15 a.m., the Defense Ministry announced.

"Under the higher Watchcon status, more intelligence assets such as airborne surveillance and analysis personnel will be deployed," ministry spokesman Won Tae-jae said.

The second highest Watchcon on a scale of five stages is issued when the allied troops judge that the North poses serious threat of military provocation.

Won said there has not been any "extraordinary" military movement in the North.

The decision was made "in considering all present, potential and expected threats," he added.

The North's warning came as President Lee Myung-bak prepares to host a summit with the leaders of the Association of Southeast Asian Nations on Jeju Island next Monday and Tuesday.

It is first time for the alert to be upgraded to stage 2 since the North conducted its first nuclear test in October 2006.

The latest is the fifth stage 2 Watchcon. The first was issued in 1982 when North Korea deployed bombers close to the border.

On Thursday, the North said it would no longer be bound to the 1953 armistice agreement that ended the three-year Korean War.

It also said it cannot guarantee the safety of South Korean and U.S. vessels near the western sea border, the site of deadly naval skirmishes between the two Koreas in 1999 and 2002.

The South Korean Joint Chiefs of Staff pledged a stern response and tightened security on the West Sea.

The Navy forward-deployed a 3,500 ton-class KDX-I destroyer and readied additional artillery and missiles near the maritime border, military officials said.

The North was reacting to Seoul's decision to fully join the Proliferation Security Initiative, a U.S.-led international campaign to stop and search ships suspected of carrying weapons of mass destruction and related materials.

Seoul declared its participation on Tuesday following the North's nuclear test the previous day. Pyongyang has said it would regard the South's PSI accession as a declaration of a war.

Responding to the North's scrapping the armistice, the U.S.-led U.N. Command said in a statement that the truce remains in force and is binding on all signatories, including North Korea.

"The armistice has served as the legal basis for the ceasefire in Korea for over 55 years," said the UNC, which overseas the ceasefire.

"The U.N Command will adhere to the terms of the armistice and the mechanisms that support it."

About 28,500 U.S. troops are stationed in the South as a deterrent against North Korea.

Wednesday, May 27, 2009

I am 100 percent sure that the U.S. will go into hyperinflation: Mark Faber.


Hyperinflation will be the last straw. It will be the dead sentence for the prudent saver, the ones who looked after themselves by putting aside every month a little amount of money for darker days.

This will be the beginning of the end of a country gone mad by greed.


I am 100 percent sure that the U.S. will go into hyperinflation: Mark Faber

Bloomberg; By Chen Shiyin and Bernard Lo

May 27 (Bloomberg) -- The U.S. economy will enter “hyperinflation” approaching the levels in Zimbabwe because the Federal Reserve will be reluctant to raise interest rates, investor Marc Faber said.

Prices may increase at rates “close to” Zimbabwe’s gains, Faber said in an interview with Bloomberg Television in Hong Kong. Zimbabwe’s inflation rate reached 231 million percent in July, the last annual rate published by the statistics office.

“I am 100 percent sure that the U.S. will go into hyperinflation,” Faber said. “The problem with government debt growing so much is that when the time will come and the Fed should increase interest rates, they will be very reluctant to do so and so inflation will start to accelerate.”

Federal Reserve Bank of Philadelphia President Charles Plosser said on May 21 inflation may rise to 2.5 percent in 2011. That exceeds the central bank officials’ long-run preferred range of 1.7 percent to 2 percent and contrasts with the concerns of some officials and economists that the economic slump may provoke a broad decline in prices.

“There are some concerns of a risk from inflation from all the liquidity injected into the banking system but it’s not an immediate threat right now given all the excess capacity in the U.S. economy,” said David Cohen, head of Asian economic forecasting at Action Economics in Singapore. “I have a little more confidence that the Fed has an exit strategy for draining all the liquidity at the appropriate time.”

Action Economics is predicting inflation of minus 0.4 percent in the U.S. this year, with prices increasing by 1.8 percent and 2 percent in 2010 and 2011, respectively, Cohen said.

Near Zero

The U.S.’s main interest rate may need to stay near zero for several years given the recession’s depth and forecasts that unemployment will reach 9 percent or higher, Glenn Rudebusch, associate director of research at the Federal Reserve Bank of San Francisco, said yesterday.

Members of the rate-setting Federal Open Market Committee have held the federal funds rate, the overnight lending rate between banks, in a range of zero to 0.25 percent since December to revive lending and end the worst recession in 50 years.

The global economy won’t return to the “prosperity” of 2006 and 2007 even as it rebounds from a recession, Faber said.

Equities in the U.S. won’t fall to new lows, helped by increased money supply, he said. Still, global stocks are “rather overbought” and are “not cheap,” Faber added.

Faber still favors Asian stocks relative to U.S. government bonds and said Japanese equities may outperform many other markets over a five-year period. “Of all the regions in the world, Asia is still the most attractive by far,” he said.

Gloom, Doom

Faber, the publisher of the Gloom, Boom & Doom report, said on April 7 stocks could fall as much as 10 percent before resuming gains. The Standard & Poor’s 500 Index has since climbed 9 percent.

Faber, who said he’s adding to his gold investments, advised buying the precious metal at the start of its eight-year rally, when it traded for less than $300 an ounce. The metal topped $1,000 last year and traded at $949.85 an ounce at 12:50 p.m. Hong Kong time. He also told investors to bail out of U.S. stocks a week before the so-called Black Monday crash in 1987, according to his Web site.

Court overturns minister’s land grab




I am aware that news on land grabs in South Africa will tickle the amygdala's of our readers big time. Not that there are a lot of you. But any news which sounds/smells/feels remotely like Zimbabwe gets people talking.

And here you are: a minister and her department decides that anyone who is not using his land has a problem. Luckily, the Department lost this time, but we should not underestimate the popular view on Zim by the ANC leaders.

The ANC never tackled Mugaba, actually, they protected him.


I do not have a problem with expropriation as long as there is law protecting land owners against politicians and their families and as long as they are treated with consideration.

In Europe, governments also take land from their people if they decide it is in the interest of "the greater good'.

Of course "the greater good" is in itself a discussion point, but in South Africa, land ownership by black people might well be "a greater good".

Amandla!


Court overturns minister's land grab.

Business Day; Stepphan Hoffstatter; March 27, 2009

THE North Gauteng High Court in Pretoria yesterday ordered the government to restore land to a black farmer evicted last month under its controversial “use it or lose it” policy

THE North Gauteng High Court in Pretoria yesterday ordered the government to restore land to a black farmer evicted last month under its controversial “use it or lose it” policy.

The case was brought by land- reform beneficiary Veronica Moos against Arts and Culture Minister Lulu Xingwana, who launched the policy with histrionic fanfare while land and agriculture minister.

Moos initially sought a punitive costs order against Xingwana in her personal capacity for her active role in the eviction, but this was later dropped.

Yesterday, the new Department of Land Reform and Rural Development, which has been split from agriculture, was given notice that it had 12 hours to restore the 21ha farm near Bapsfontein in eastern Gauteng to Moos.

Several government sources told Business Day that beneficiaries close to Xingwana had already been allocated the farm.

Moos said the new beneficiaries made several attempts this month to occupy the farm on orders from the department, violating an interim agreement that the property would remain vacant pending the outcome of the case.

“This is a great relief, but it’s only the first step to getting my farm productive again,” Moos said.

“I still have no money for production inputs. I’m not in a position to secure funding elsewhere because I have no lease or title deeds,” she said.

The judgment could expose the department to further legal action from evicted land-reform beneficiaries deemed unproductive. It also highlights structural faults in the state’s Proactive Land Acquisition Strategy, in which the government buys farms aggressively on the open market and leases them to beneficiaries. Leases can be terminated if farms are underutilised.

Designed to speed up land delivery, the strategy has accelerated the failure rate as new farmers cannot obtain credit from commercial banks, co-operatives, or food processing companies because they lack secure title. So they remain dependent on government support.

At least five evictions had already taken place under Xingwana’s policy, and several more were planned, the department said.

Lawyers for Human Rights, which is handling Moos’s case, is considering a court challenge against the strategy because, they say, it is open to arbitrary abuse by officials.

Spokesman Eddie Mohoebi said yesterday the department would have to study the judgment before commenting in detail.

All evictions had followed due process, and Moos had received adequate state support, he said.

This is contradicted by court documents showing Moos tried on several occasions to get the department to honour promises of support and to supply her with a valid lease.

Xingwana accused Moos of neglecting her farm and subletting it to white neighbour Jan Merneweck.

Moos countered that she had received a fraction of the support promised, and was forced to deplete her pension savings to keep the farm going. She had asked Merneweck to share her homestead after burglaries left her afraid to live there alone.

Xingwana shocked the land-reform sector in March by announcing that unproductive beneficiaries on state land would lose their farms. Agricultural unions and land activists denounced this as a pre- election ploy aimed at diverting attention from her department’s bungles.

Tuesday, May 26, 2009

SA in recession as GDP tanks





And Trevor Manuel, our previous Finance Minister, now Minister of Alpha and Omega "Government will Solve All Problems" said 3 months ago that South Africa will avoid a recession.

Oops!

Fin24.com

Johannesburg - South Africa's real gross domestic product (GDP) dropped on a quarter-on-quarter basis by -6.4% in the first quarter of 2009, from -1.8% in the fourth quarter of 2008.

This is a seasonally adjusted annualised figure which ushers in the first recession in 17 years, Statistics South Africa (Stats SA) data showed on Tuesday.

Growth was expected to have decreased by 3.9% on a quarter-on-quarter basis, according to a consensus survey undertaken by I-Net Bridge. The range of forecasts was from -0.7% to -5.2%.

Non-seasonally adjusted year-on-year (y/y) GDP in the first quarter was placed at -1.3% from 1.0%.

Fanie Joubert, economist at Efficient Group, said it's a terrible figure: "It's much worse than what the market expected; it's almost double ... This confirms that South Africa is in a technical recession and growth is under pressure."

'Angry' doctors to march



It puzzles me why some countries treat their health care personnel as filth.

With all respect, I know our population is poor, but proper basic health care is a human right.

Doctors don't have to earn a zillion dollars, I know many of them, normal people with kids and a small car, leading a sober life.

Pushing them in to poverty is a disgrace to us all.

The Department of Health really did its best to get doctors angry like this. And I can promise you, to get these people on the street is really, really difficult.

But if the politician needs a new liver because of excessive drinking, like our previous Minister of Health Manto, the story changes: single room in a private hospital, pushed in front of the row for an operation, ...need some flowers in the room?...

We should be more vocal on what we believe is right or wrong.



'Angry' doctors to march


Johannesburg - Many patients will be left unattended on Friday as doctors are expected to march in Pretoria to show their dissatisfaction over various issues in the health sector.

"Doctors are angry and have legitimate grievances," said SA Medical Association (Sama) spokesperson Phophi Ramasteba on Monday.

Ramatseba said all doctors had been notified - even those that had moved to a new body still waiting to be legally recognised, the United Doctor's Forum.

"The issues raised affect every single doctor. This is not about the differences or personalities."

While the main focus would be on the delays in the implementation of the Occupation Specific Dispensation (OSD) and the "insultingly" low offers by government so far, Ramasteba said the association planned to voice its concerns over other issues.

Other issues

These included the Reference Price List (RPL) which acted as a benchmark for private sector doctor fees, and the recently gazetted dispensing mark-up regulations which had been rejected by dispensing doctors, said Ramatseba.

Sama would plan further strike action, should its demands not be met.

Sama has demanded at least a 50% salary increase which the doctor's forum has upped to 70%. The forum's spokesperson Ratitse Malatji said this was how much doctors were underpaid.

Other issues the doctors raised, which led to a strike last month and the recent lunch-time pickets, was the deterioration in academic facilities, inadequate numbers of doctors being trained, the poor working conditions and the "atrocious" conditions patients seeking medical attention in public facilities had to deal with.

Negotiations between the association, government and the forum representing the doctors collapsed earlier this month after the forum, representing disgruntled doctors, staged a walk out at the bargaining council due to "irreconcilable differences".

New body

Malatji said doctors wanted a new body as they did not trust the association, which no longer represented the interests of the doctors.

Asked whether or not they would take part in the march, Malatji replied: "That will be determined by our members. No one has clarity about details of Friday's march.

"We haven't been contacted about it (the march) but there was a rumour to that effect."

Out of its 7 629 doctors registered with Sama, no one had terminated their membership, said Ramasteba

"None of our members have resigned membership so we expect them to join although we have not yet met with them about the strike"

However, this was disputed by Malatji who said a number of doctors had written letters to Sama.

"Sama's response was that their memberships will be terminated after May 29," he said.

Meanwhile, admitting the health department's woes, Health Minister Aaron Motsoaledi on Sunday expressed his commitment to address the many problems faced by the public health system.


Sunday, May 24, 2009

Gold = Money. The US$ = Toast


Gold = Money. The US$ = Toast


From: Kontent Konsult

Gold is the flip side of debt based fractional reserve fiat based systems because it is a financial asset in its own right, the physical embodiment of the work required to extract it that becomes the economic embodiment of the same because of its properties and the fact that its value is intrinsic; not a claim subject to default by economic collapse, the revolt of the serfs or rent strikes or sovereign default.

It is a put option on the credibility of dollar hegemony and had not officials put coins in the fusebox, it would have signaled we were in trouble years ago.

Since the invention of agriculture and the city state the real game has been keeping elites mindfull of their duties; addressing the issues of those who do the work and containing the manipulation and misuse of the magical power of abstraction enabled by numbers and writing.

The computer network and the spreadsheet and their descendants have enabled vast new abstractions and hubris in the official money sector but those same technologies are also dis-intermediating all of the old relationships between institutions and flows.

We move to a new order.

Gold and silver are real money and the price locus of the realities of energy and geology as well as money, power and politics.

The study of gold is the study of civilisations.

Where Is Our Meili??


The whistle blower gets his "thank you".



The News Junkies of this world might remember Meili
:

Christoph Meili (born April 21, 1968) is a Swiss whistleblower.

In early 1997, Meili worked as a night guard at the Union Bank of Switzerland (UBS, precursor of UBS AG) in Zurich, Switzerland.

He discovered that officials at UBS were destroying documents about orphaned assets, i.e., credit balances of deceased Jewish clients whose heirs' whereabouts were unknown.

Destruction of such documents was a violation of Swiss laws. So Meili took them home. After the Swiss authorities sought to arrest Meili, he and his family were given political asylum in the United States.

Obviously, Meili has intelligence and guts. Unfortunately, as he admits, he was naïve at that time. He is now broke, divorced, without a job and living in Switzerland again (German). But he still does not regret his actions!

Find here the web site containing the audio where Meili contemplates his future.

Gold bugs are crying out loud: "Where is our Meili"?

But it is obvious that:
  1. being a whistle blower can be very, very difficult and dangerous and
  2. one should forget the USA as the country to get political asylum

Mark Faber: Watch Out For Government Confiscation Of Gold




Mark Faber: Watch Out For Government Confiscation of Gold


"It is dangerous to be right if the government is wrong" and "don't overestimate the intelligence of Central Bankers" are just 2 comments of this oracle with Max Keiser (sorry, Max) in the video

This is actually the 2nd time this month I blog about this topic.

How should we translate these confiscation comments. I really would like to sleep well at night and not worry about Big Brother.

In this last article I write that the risk of confiscation depends on how deep the depression will be.

Can we expect severe social unrest? Or only political instability?

We need to be careful, vigilant, on-our-toes, critical, vocal, angry and try to relax at the same time ;)




Saturday, May 23, 2009

Hans Rosling on HIV: New facts and stunning data visuals

If you have time and are interested in this topic take your time to watch this video. Really stunning.

Hans Rosling unveils new data visuals that untangle the complex risk factors of one of the world's deadliest (and most misunderstood) diseases: HIV.

He argues that preventing transmissions -- not drug treatments -- is the key to ending the epidemic.

ANC: take note!

Please visit and bookmark also www.ted.com, a web site dedicated to "riveting talks by re
markable people".

And since you're busy visiting and bookmarking, have a look also at Hans Rosling's web site: www.gapminder.org. Slogan:
"Unveiling the beauty of statistics for a fact based world view".

I promise you will enjoy these web sites.





video

We're Out Of Money: Obama








We're Out Of Money: Obama


Drudgereport.com


In a sobering holiday interview with C-SPAN, President Obama boldly told Americans: "We are out of money."



C-SPAN host Steve Scully broke from a meek Washington press corps with probing questions for the new president.

SCULLY: You know the numbers, $1.7 trillion debt, a national deficit of $11 trillion. At what point do we run out of money?

OBAMA: Well, we are out of money now. We are operating in deep deficits, not caused by any decisions we've made on health care so far. This is a consequence of the crisis that we've seen and in fact our failure to make some good decisions on health care over the last several decades.

So we've got a short-term problem, which is we had to spend a lot of money to salvage our financial system, we had to deal with the auto companies, a huge recession which drains tax revenue at the same time it's putting more pressure on governments to provide unemployment insurance or make sure that food stamps are available for people who have been laid off.

So we have a short-term problem and we also have a long-term problem. The short-term problem is dwarfed by the long-term problem. And the long-term problem is Medicaid and Medicare. If we don't reduce long-term health care inflation substantially, we can't get control of the deficit.

So, one option is just to do nothing. We say, well, it's too expensive for us to make some short-term investments in health care. We can't afford it. We've got this big deficit. Let's just keep the health care system that we've got now.

Along that trajectory, we will see health care cost as an overall share of our federal spending grow and grow and grow and grow until essentially it consumes everything...

SCULLY: When you see GM though as “Government Motors,” you're reaction?

OBAMA: Well, you know – look we are trying to help an auto industry that is going through a combination of bad decision making over many years and an unprecedented crisis or at least a crisis we haven't seen since the 1930's. And you know the economy is going to bounce back (In 2014, Troy Ounce) and we want to get out of the business of helping auto companies as quickly as we can. I have got more enough to do without that. In the same way that I want to get out of the business of helping banks, but we have to make some strategic decisions about strategic industries...

SCULLY: States like California in desperate financial situation, will you be forced to bail out the states?

OBAMA: No. I think that what you're seeing in states is that anytime you got a severe recession like this, as I said before, their demands on services are higher. So, they are sending more money out. At the same time, they're bringing less tax revenue in. And that's a painful adjustment, what we're going end up seeing is lot of states making very difficult choices there...

SCULLY: William Howard Taft served on the court after his presidency, would you have any interest in being on the Supreme Court?

OBAMA: You know, I am not sure that I could get through Senate confirmation...

Developing...

Friday, May 22, 2009

Recession Turns Malls Into Ghost Towns



And with end of access to cheap credit we see as a consequence the decline of the Temples of Mammon.

I am convinced many husbands will be happy never to visit these ugly dungeons again.

The access to malls is "conditional": on the conditions you spend money.

Mall owners call non-spending mall visitors "ice-cream lickers" (actually strange: they bought an ice-cream, no?)


What we need are more spaces where people come together without the implicit or explicit condition to spend money.


That's why old city squares are so wonderful; they have been created organically and intuitively. Developed over the ages with the heart.

We can expect a totally different society after this crisis.

I can't wait!



Recession Turns Malls Into Ghost Towns

www.wsj.com. By KRIS HUDSON and VANESSA O'CONNELL


CHARLOTTE, N.C. -- Malls, those ubiquitous shopping meccas that sprang up in the 1950s, are dwindling in number, with many struggling properties reduced to largely vacant shells.

On the low-income east side of Charlotte, N.C., the 1.1-million-square-foot Eastland Mall recently lost a slew of key tenants, including a Dillard's and, next month, a Sears. Sales per square foot at the venue fell to $210 in 2008 from $288 in 2001.

As the recession alters American spending habits, traditional shopping malls like Eastland Mall are deteriorating at an accelerating pace.

The Metcalf South Shopping Center in Overland Park, Kan., is languishing after plans to redevelop it into an open-air shopping district fizzled. The stretch of shops that connects the two largest tenants -- a Sears and a Macy's -- stands mostly vacant, patrolled by security guards.

With their maze of walkways and fast-food courts, malls have long been an iconic, if sometimes unsightly, presence in the American retail landscape. A few were made famous by their sheer size, others for the range of shopping and social diversions they provided.

But the long recession is helping to empty out the promenades. Some analysts estimate that the number of so-called "dead malls" -- centers debilitated by anemic sales and high vacancy rates -- will swell to more than 100 by the end of this year.

In the 12 months ended March 31, U.S. malls collectively posted a 6.5% decline in tenants' same-store sales, according to Green Street Advisors Inc., a real-estate research firm. The recent slump was led by an average 7.3% sales drop at Simon Property Group Inc., the operator with the largest number of mall locations.

The industry's woes are worsening. Thinning customer traffic, and subsequent hits to tenants' sales and profits, prompted Standard & Poor's Corp. last month to lower the credit ratings of the department-store sector. That knocked Macy's Inc. and J.C. Penney Co. into junk territory and pushed others deeper into junk. Sears Holdings Corp., a cornerstone tenant at many malls, is expected to close 23 stores this month and next.

General Growth Properties, which owns more than 200 U.S. malls, filed for bankruptcy protection April 16, due mainly to its failure to refinance billions of dollars of debt coming due. While the real-estate investment trust has said the filing will have no impact on its mall business, analysts say a prolonged bankruptcy proceeding could make retailers nervous about sticking around once their leases expire.

The severity of the recession is turning some malls that were once viewed as viable into potential casualties. "Any mall that's sitting on life support is probably going to get its plug pulled" as the economy stalls, says Michael Glimcher, chairman and CEO of Glimcher Realty Trust, which owns 23 U.S. properties, including Eastland Mall in Charlotte.

One industry rule of thumb holds that any large, enclosed mall generating sales per square foot of $250 or less -- the U.S. average is $381 -- is in danger of failure. By that measure, Eastland is one of 84 dead malls in a 1,032-mall database compiled by Green Street. (The database focuses heavily on malls owned by publicly traded landlords and doesn't account for several dozen failing malls in private hands.) If retail sales continue to decline at current rates, the dead-mall roster could exceed 100 properties by the end of this year, according to Green Street. That's up from an estimated 40 failing malls in 2006, before the recession began.

"This time around, because of the dramatic changes in consumer spending practices, we're very likely to see more malls in the death spiral than we've ever seen before," says Green Street analyst Jim Sullivan.

Failing malls didn't get into trouble overnight, and most began their descent long before the tough climate. Typically, a mall begins to suffer due to job losses and other pressures in the surrounding neighborhood or because a newer mall opens nearby. The loss of key tenants -- such as the wave of department-store closures over the past three years -- hastens the demise. Also sapping malls' vibrancy: the increased preference among consumers for big-box stores, such as Wal-Mart Stores Inc. and Target Corp., which rarely operate in malls.

Developers, in fact, have been moving away from the enclosed-mall format in favor of big-box centers anchored by free-standing giants such as Wal-Mart or open-air shopping centers with tiny parks and outdoor cafes sprinkled among fashion stores. Only one enclosed mall has opened in the U.S. since 2006: The Mall at Turtle Creek in Jonesboro, Ark.

These pressures, coupled with landlords' difficulties refinancing debts in the bone-dry capital markets, signal tough years ahead for retail-property owners -- even after consumer spending begins to rebound. "The shopping-center bankruptcies and the REIT bankruptcies are the ticking time bomb that people aren't talking about," says Burt P. Flickinger III, managing director of Strategic Resource Group, a research firm.

Four months ago, executives at J.C. Penney headquarters in Plano, Texas, called a "triage" meeting to discuss a recent study of the financial condition and health of the 550 malls housing Penney stores. The study's conclusion: 15 of its stores are located in malls at risk of failure.

"We started to see things heading south," says Penney CEO Myron "Mike" Ullman III. It was important, he notes, to "get ahead of this" mall problem by reviewing Penney's new store strategy to determine whether it might relocate existing mall stores. Over the past 18 months, Penney's weekly sales have been trending better at stand-alone stores that aren't attached to traditional malls.

Hundreds of other anchor stores -- generally two- and three-story department stores that drive mall momentum -- are pulling out of properties. Several anchor chains, including Gottschalks Inc., Goody's Family Clothing Inc. and Boscov's Department Store LLC, filed for bankruptcy protection in recent months. Goody's ended up liquidating its 282 stores, as Gottschalks is now doing with its 58. Boscov's closed 10 locations. As mall-based chains face the prospect of a much smaller market, more closures are likely. So far for 2009, monthly sales declines at upscale retailers such as Saks Inc., Nordstrom Inc. and Neiman Marcus Group have registered mostly in the double digits, compared with results a year ago.

Saks CEO Stephen Sadove is talking with mall owners about closing a few of the retailer's 53 Saks Fifth Avenue stores. "You have to ask yourself: Do you believe the prospects for a given store or mall are going to be positive? Can you make money over the long term?" he says.

For towns and cities that are home to dying malls, the fallout can be devastating. Malls hire hundreds of workers and are significant contributors to the local tax base. In suburbs and small towns, malls often are the only major public spaces and the safest venues for teenagers to shop, hang out and seek part-time work.

Commonly, "the mall will be a meeting place, or, in some cases, like a city center," says Carl Steidtmann, chief economist at Deloitte LLP. The deterioration of a mall can spawn broader problems, he notes. "It can become a crime magnet."

The gradual fade-out of marginal malls has prompted a thriving Web culture dedicated to sharing information about dead or dying properties. Sites such as Flickr.com, Deadmalls.com and Labelscar.com are drawing traffic from mall employees, shoppers and other mall mourners who swap stories, photos and predictions about the status of centers on their way out.

"So sad!" wrote Edith Schilla, 45 years old, of Independence, Ohio, in an April 3 posting on Labelscar.com following her visit to a Sears liquidation sale at the Randall Park Mall in North Randall, Ohio. "I was able to peek into the mall and was so overtaken by the vast emptiness," she wrote, recalling it as previously "so busy."

After the Sears closes next month, Randall Park will be left with only a few remaining tenants, including an Ohio Technical College automotive school. It currently has the most popular page on Labelscar.com, which so far this year has a 25% increase in postings on its "dead malls" category. Mall owner Whichard Real Estate LLC is trying to sell the property, which likely needs to be torn down and rebuilt into something else, says Whichard asset manager Kenneth Whichard. Local officials, meanwhile, want to fill the mall with education and industrial tenants.

During past economic cycles, dead malls were frequently redeveloped into mixed-use space that includes apartments, offices or parks. Repurposing mall space today will be more difficult. Lenders and investors are moving away from commercial real estate as property values decline and delinquencies rise on debt used to acquire or develop properties. Retail real estate has been hit especially hard, as declining retail sales and store closures hammer mall landlords.

In Charlotte, Eastland's deterioration into a dead mall matches the fate of many others across the U.S.

Faison Enterprises Inc. opened Eastland in 1975 as the city's second regional mall. Shoppers crowded four-deep around its skating rink to see local dignitaries kneel gingerly on the ice as a Presbyterian minister blessed the structure with prayers. In the early years, shoppers flocked to the mall's Miller & Rhoads and Ivey's department stores, among others.

"It was just a great place to go and be seen," said Mary Kate Cline, a 51-year-old who frequented the mall in its early years but can't recall the last time she entered it.

Eastland's reign lasted roughly two decades. Its market began to erode when the area around Eastland fostered low-income housing. Meanwhile, the Charlotte area's more affluent residents and new arrivals gravitated to suburbs on the city's north and south ends. Developers built and renovated malls in those suburbs, drawing shoppers away from Eastland. In recent years, discount stores such as Wal-Mart and midtier Kohl's Corp. sprung up near Eastland, siphoning off more of its shoppers.

A string of major store exits at Eastland began with Penney's departure in 2002. Belk Inc. closed in 2007, along with several national specialty stores. The closures gained momentum amid the recession last year, when stores including New York & Co., Genesco Inc.'s Journeys, Finish Line Inc. and Dillard's Inc. pulled out, leaving behind empty, gated storefronts.

A handful of retail holdouts -- stores for Footlocker Inc., Burlington Coat Factory Inc. and several local merchants, many paying reduced rents -- are reluctant to leave, even as sales dwindle. "I've made my business here," Luz Pavas said, while manning her kiosk of health and beauty aids. "I don't want to move to another mall. I want Eastland Mall to be like it was eight years ago."

Boarded-up stores near the mall languish as reminders of departed retailers, including Mega Food Market, Uptons department store and Harris Teeter Inc. Neighbors and community leaders want Eastland razed and replaced with developments such as upscale housing to attract a new demographic.

But the mall's current owner, Glimcher Realty Trust, the Columbus, Ohio-based owner of 23 malls, is keen to sell Eastland rather than spend the hefty sums needed to redevelop it. A better investment, says the company, "would be to put money into assets that were doing well," according to Glimcher spokeswoman Lisa Indest.

Charlotte city officials have lined up resources to help reinvent the mall, including $20 million in public financing. They acknowledge that finding a developer willing to underwrite the additional $180 million needed to turn Eastland into a mix of housing, shops and parks will be tough.

"No one's kidding themselves that this is an easy real-estate deal," says Charlotte City Councilman John Lassiter. "It wasn't easy when the market was good. Now it's much harder."

How a Magician would escape from hand cuffs

Thursday, May 21, 2009

Paper Gold is Not a Safehaven


Slide 3
Many people buy gold as a safe haven and get advices from brokers. “Trust us”, they say, “We give you a piece of paper. Paper gold is as good as real gold”.

So the financial industry created a fantasy world with paper gold several times bigger in volume than there is physical gold.

This works really great in the good times.

Until people start getting really nervous and begin asking for delivery.
“We can’t deliver”, the Financials will then say, “and we saw the broker leaving for the hills”.

And you are the owner of that piece of paper. Nothing more, nothing less.

There should be nothing between you and your gold: no shares, I.O.U’s, agents or companies.

The only safe haven that exists is physical gold in your possession; anything else is a risk.

The KRUGERRAND is a gold coin with the biggest market share in the world.
It can easily be sold and stored, is immune to decay and cannot be counterfeited.

The Decision is yours.......

ANC public relations in a spin over car


The story continues; zero points for Zuma

ANC public relations in a spin over car.

Business day; May 21, 2009

Ndebele claims moral high ground but Zuma raises eyebrows, writes Wilson Johwa

TRANSPORT Minister Sbu Ndebele’s initial acceptance of a R1,1m gift car, which he decided to return under public pressure, has presented the African National Congress (ANC) with a public relations nightmare.

In announcing his decision to return the Mercedes-Benz along with two cows and fuel vouchers, Ndebele said he was doing so despite the ANC and President Jacob Zuma allowing him to keep the gifts. Handing back the luxury vehicle appears to have given Ndebele the moral high ground ahead of Zuma and the ANC.

Marketing expert Chris Moerdyk says the ANC wasted a great opportunity to endorse the principles that Zuma had been emphasising in the past few weeks. “It’s the old story of not communicating within the organisation and not communicating quickly enough,” he says.

Politicians did not seem to understand the power of perception, Moerdyk says. “We live in a world where perception is reality. In people’s eyes, the difference between bribery and a gift is almost indiscernible.”

ANC secretary-general Gwede Mantashe said Ndebele followed the right procedure of declaring the gifts and then seeking guidance from the president.

Procedure had to be followed regardless of whether there was an intention to keep the gifts or not. “Keep it or return it — follow the right steps,” Mantashe said.

But not everyone agrees.

“This is such a clear-cut issue that you can’t really argue that it’s okay for a Cabinet minister to accept a gift from people he might do business with,” says political analyst Steven Friedman.

Rob van Rooyen, a planning executive for the McCann Group, says the ANC’s mistake was in not using the human touch that Zuma effectively exploited to get elected. “They took it so seriously when they should have made light of it,” he says.

Zuma could have acknowledged the legal position but in good humour explained that accepting the gifts was not advisable. “They have made it academic rather than human,” Van Rooyen says. As a result, the issue was now subject to scholarly analysis and appeared to have split opinion within the party.

One view was that the matter was a no-brainer and that as a long-serving political officer-bearer, Ndebele should have immediately recognised the moral impropriety and not bothered to seek Zuma’s view. “It’s an excessive gift. If it was me, there would have been no two ways about it,” said an ANC member who did not wish to be named.

Businesswoman Noluthando Gosa feels that, as president, Zuma’s role is to uphold the law and not necessarily rule on matters of personal ethics or morality.

“Moral issues cannot be legislated; that’s why it is possible that he may have left it to minister Ndebele to decide,” she says, adding that Ndebele’s decision to return the car indicates that Zuma may not have been keen on Ndebele keeping it.

Presidential spokesman Thabo Masebe said Zuma was not asked to decide on the morality of the gift — something which could have been referred to Parliament or the public protector. “All the president said was it was fine as long as you comply with the ethics code,” Masebe said.

The final decision rested with Ndebele. “In this regard, the minister said ‘I’m not going to keep this thing’, and the president was happy with that,” Masebe said.

The fact that various companies contributed towards Ndebele’s gifts reduced the likelihood of any one of them influencing him. “It would have been a serious problem if it had come from one company,” he said.

Last Saturday, Ndebele was presented with a Mercedes-Benz S500 worth R1,1m by members of an emerging contractors programme he had helped set up when still MEC for transport in KwaZulu-Natal.

At a farewell party in Pietermaritzburg, Vukuzakhe contractors also presented Ndebele with other gifts, including two cows , fuel vouchers and a plasma TV.

Vukuzakhe has a membership of almost 30000 contractors who received government contracts of about R19bn over the past 10 years.

United Democratic Movement president Bantu Holomisa thought the ANC leadership had once again been caught in a situation that required them to differentiate what constituted a conflict of interest and what did not. “It confirms that in the ANC, when you bring cattle or sheep, they don’t see anything wrong with that,” he said.

Wednesday, May 20, 2009

Could President Obama ban U.S citizens from holding gold?


No, he won't, will he?

It all depends on how deep the depression will be. Reading other bloggers we should run for the hills. Black Swan. The media says it is all OK and we've reached the bottom

Originally I thought we would fall off a cliff. This did not happen but we are experiencing a slow motion train crash.

The core problems are not being fixed. And they will not disappear. Governments want us to go back to the malls and buy. They want the old system to revive itself.

Denial.

How deep will the depression be and how long?

My guess: very deep and very long. Let's just hope......




Could President Obama ban U.S citizens from holding gold?


Back in 1933, at a time of economic crisis, President Roosevelt forced U.S. Citizens to sell their gold at $20 an ounce - and then subsequently revalued the metal to $35. Could President Obama, a Roosevelt disciple, have similar plans in mind.

Mineweb; Author: Lawrence Williams; 20 May 2009


Whether one believes in the GATA premise that the gold price is being held down by a gigantic conspiracy between the World's Central Banks, Governments and some major banking institutions or not, there is little doubt that governmental-initiated currency manipulation does occur, and if one looks at gold as money then it is logical that some degree of manipulation here also takes place at Central Bank level.

Whether one can call this a global conspiracy, or part of the general process of stabilising currencies and exchange rates, depends perhaps on which side of the fence you are sitting. In a way this is similar to the terrorist/freedom fighter debate!

But, history does tell us that the US government, in the days of a fixed gold price, did intervene in a very direct manner with President F.D. Roosevelt banning the "hoarding of gold coin, gold bullion, and gold certificates" and thus forcing US citizens to sell to Federal Reserve at $20 an ounce. Subsequently the Fed raised the price of gold to $35 an ounce.

President Obama is known to be a Roosevelt disciple and he must be well aware of what was done at the time, given the parallels of the U.S economy between the present time and the 1930s. There must be a temptation to try the same tactic, and then raise the gold price dramatically in a move which would certainly support reserves within those nations which still have major gold holdings.

Indeed, if monetary authorities worldwide sees the gold price really start to take off, this kind of process has to become even more of a temptation as a big global move into gold could exacerbate the global financial crisis in that it would show that people no longer have faith in the economic status quo (it can be argued that already they don't) and the the current crisis of confidence could be severely worsened by such a rush.

In an article published late last year, Mark Mahaffey of Hinde Capital, argued that such a possibility existed and pointed out that "the fear for anyone who is in credit is that the financial system could become geared towards negating debt which, in turn, would destroy the value of their assets. One way of bypassing this threat is to buy gold. However a general shift to gold would undermine the power of central banks and their influence on the economy."

Of course the monetary situation nowadays is completely different and the banning of gold holdings, and subsequent revaluation would be much harder to accomplish domestically - and even more so globally.

Back in 1933 the dollar was on the gold standard which meant that, in theory at least, each dollar could be exchanged for the same value in gold. Nowadays all currencies are effectively fiat money with no solid backing (except perhaps of a fiat dollar), and to revert to a gold standard would require an upward revaluation of the gold price beyond belief.

But, there is a precedent out there and while we think the idea is unlikely, it might appeal to someone who is prepared to try radical means to stabilise the economy if all other measures fail.
And - consider this thought - are shortages of gold coins from national mints due to a total underestimation of demand, or part of government policies to control gold flows into private hands. We think the former, but the conspiracy theorists no doubt have other views.

Banks Give You an Umbrella in the Summer, only to Take it from You again in the Winter





Moral of the story: Buy at the bottom of the market.

You know when the bottom has been reached when you newspaper articles say that banks have relaxed their lending practices.


When can we expect the bottom of the market? See the counter in the right top corner of this blog.


So you will have plenty of time to save and to climb onto the next bubble.


Home loans depend on (the return of growing) home prices

www.fin24.com; Elma Kloppers

Capital for banks has become a scarce resource.

It has become increasingly expensive for banks to get capital to fund their asset books, especially those assets requiring long-term finance, such as mortgage loans.

This was the reaction on Monday by Gavin Opperman, Absa's group chief executive for securitised loans in the retail division, to the prevailing debate in which banks are being accused from every quarter of smothering the housing market with their lending criteria.

There are currently two issues being debated: banks' stricter lending criteria, in which prospective homebuyers are required to put down a deposit of 10% to 20%, and the interest rate at which banks are advancing money to clients.

Although the prime lending rate is currently 12%, this is not necessarily the rate that all clients pay. Historically some clients secured loans at rates of prime minus two, which no longer offered as an option.

Sean O'Sullivan, head of sales and marketing at First National Bank (FNB), says that in the current market of declining house prices, it is sensible to advance loans more conservatively.

As far as the stricter lending criteria are concerned, both reckon that this is not the time to relax them. "We are still applying a conservative lending strategy because of the falling house prices, but at the same time we are keeping a close eye on the market for any signs of improvement," notes O'Sullivan.

Opperman believes that since the residential market has not yet turned, banks are currently in no position to review their lending criteria.

"As soon as there are indications of improvement, we want to be in a position to review our lending policy and advance money more aggressively than currently."

UPDATE: Zuma test: 1/25: Test Failed



Remember?

ZUMA SAID: "we support clean and corrupt free government"

CASUS:
The Minister of Transport S'bu Ndebele accepted a R1.1m Mercedes Benz S500 from a group of contractors with contracts worth more than R400m in the department.

QUESTION: Why should Ndebele get a Merc for doing his job? Ndebele asked Zuma to make a decision.

WHAT ZUMA DID: He gave the nod to Ndebele to keep the Merc.

MORAL OF THE STORY: Zuma missed an opportunity to set the correct tone for his administration by ensuring that special favours for a well connected governing elite are not tolerated.


GOOD NEWS:
Ndebele gave the Merc back and will use the money to educate emerging contractors (OK, he did so after intense pressure, but he did it, didn't he?)

Tuesday, May 19, 2009

The Zuma cabinet: An interpretation



Conclusion:

Zuma is the representative of millions of impatient, black South Africans insisting that the ANC must deliver NOW.

I am sure he and his team will rattle our Western thinking with some stunts, but he might just be our savior.




The Zuma cabinet: An interpretation

Stanley Uys and Paul Trewhela ask whether SA is now headed towards a leftist, state controlled economy

Is South Africa headed for a left-wing, state-controlled (statist) economy, because the orthodox market-orientated economy that Thabo Mbeki set in stone in previous ANC governments has failed to reduce black poverty?

Conclusions are being drawn that the April 22 election was a coup for the Left because the economic ministries are grouped now under active or one-time Communists, so that "transformation" of the economy can begin. The evidence for these conclusions is erratic: it could be just a coincidence that members and supporters of the South African Communist Party have been appointed so as to form a cluster, and it could be that this does not guarantee they will pull together.

But there are firm grounds for the belief that economic transformation will begin soon. The national conference of the ANC at Polokwane in December 2007 ordered it. It was a crucial element in the ANC's populist election campaign. The strong Communist presence now appointed to the economic ministries follows this pattern.

The sheer size and complexity of the presidency and of Zuma's government seems to be custom-built for turf wars. If indeed turf wars break out between economic departments, or between these departments and the government as a whole, or between them and other individual ministers, the party bosses in Luthuli House (ANC headquarters) have the authority to call errant ministers to order. Given the cadre deployment system by which the ANC operates, and the lack of a constituency system which might provide freedom of conscience for the individual MP or minister, the entire way in which ANC government is structured, even more so under Zuma than under Mbeki, provides for enforcement - in the name of the ANC. For every top-ranking politician or official there is a custodian, which raises the question: quis custodiet ipsos custodes (who shall guard the guardians themselves)?

Does Zuma sense he could be caught in the crossfire between warring ministers because transformation is such so awesome? According to Mbeki's biographer Mark Gevisser, "the ministers of justice, defence, intelligence" [now called ‘state security' in a throwback to both apartheid and the ANC's old Stalinist past], "police and communications are all die-hard Zuma loyalists." Zuma expects these ministers to serve him in the way their predecessors served Mbeki. Is there method in Zuma's ministerial appointments: presenting the economic ministers with a poisoned chalice, while retaining the hard core of power for himself?

As this article will point out, the Zuma government does not represent a single tightly knit party, but is a form of coalition of disparate interests. There may well be different levels of enthusiasm for statist transformation among the partners.

The ANC's enforcers

We already have Trevor Manuel (National Planning Commission) and Pravin Gordhan (Finance) watching each other. And Zuma has proposed that Ebrahim Patel's Economic Development department should formulate the policies of the Department of Trade and Industry and Finance to sort out long-standing tensions. Now a new official appears whose daunting task will be to maintain working harmony in the party. He is Collins Chabane, an ANC national executive committee member whose title is Minister in the Presidency: Performance Monitoring and Evaluation as well as administration in the presidency.

Columnist Justice Malala writes: "Not many people know anything about Collins Chabane, the man who is in charge of monitoring and evaluation of the government's programme. He will work closely with Manuel and Zuma. This means the man is instantly the most powerful individual in the cabinet. He can fire any minister."

In Business Day (May 14), Karima Brown writes: "Collins Chabane is the ultimate backroom operator...He played a key role in the ANC's transition team which fashioned the details of President Jacob Zuma's overhauled executive". Explaining his new role, Chabane told Brown: "Peer rivalry can cause havoc. You have four politicians with huge personal staff in the presidency [Trevor Manuel, Pravin Gordhan, Rob Davies and Ebrahim Patel]. It can be tricky. We would have to prevent turf politics in the presidency. I think that is why I was put in this position."

Brown says Chabane will "peer over the shoulders" not only of cabinet colleagues, but also of mayors, premiers and other ANC leaders.

Yesterday, the Sunday Times revealed that a wealthy businessman, Sandile Zungu, 41, will be named this week as head of Zuma's office in the Union Buildings - the post the Rev Frank Chikane occupied under Mbeki. Zungu's company has interests in mining and telecommunications. Last year Zungu said that while Trevor Manuel was one of the best finance ministers in the world, he was not up to key challenges like job creation.

Now Zungu will work with Manuel. Further additions to the already large presidency staff, says the Sunday Times, are that the current ANC spokesperson, Lindiwe Sisulu, will be named as cabinet secretary, while two former ministers, Charles Nqakula (former national chairperson of the SACP and Minister of Safety and Security in Mbeki's government) and Mandisi Mphahlwa (Trade and Industry) will be appointed advisers to the presidency.

Malala says that not only has the cabinet been inflated to 34, but the presidency at present contains about 500 people working on policy matters and occupying "all sorts of other positions." Every minister "gets a blue light, a driver and a whole new department...virtually every ministry has been renamed, which means millions of Rands will be spent on rebranding, making new business cards and so forth." The opposition Democratic Alliance estimates that the Zuma overhaul will cost R2 billion annually. This sum, it says, could build 60,000 low cost houses, employ an additional 20,000 police constables for a year, or pay for the salaries of 17,000 teachers.

Zuma's coalition government

As Malala has noted, the voting on April 22 was not an election, but a "narrow plebiscite...a referendum on the ANC rule of the past 15 years."

To explain: An election is for choosing a government or representatives or officials, whereas a plebiscite is on a specific issue. On April 22 the specific issue was about returning the ANC to office, the unspoken injunction to ANC voters being to wait patiently in queues and tick "ANC" on their ballot papers, because the ANC is a legend and its supporters are required to endorse the legend. As ANC Youth League president, Julius Malema, said: "We'll show them that outside the ANC there is no life; no nice things."

The new ANC asked for a blank cheque on April 22 and was given one. It will take weeks, months, even years, before the electorate grasps fully what it voted for. Scrutiny of the new government confirms that the whole Zuma movement is a coalition. To the extent that it is a unity, this is due to a common negative factor: principally, mutual dislike of Mbeki, plus no doubt desire for the spoils of office from among those who perceived themselves as unjustly excluded.

More important, the ANC now represents an almost totally monoracial constituency. It has lost the inter-racial alliance with which it entered office in 1994, in which a substantial base of ethnic support for the ANC was represented in a Mac Maharaj, an Ahmed Kathrada or a Joe Slovo. This inter-racial element has been diverted and is beginning to take root directly in the Democratic Alliance's election vote, and indirectly through the possibility of post-election agreements between the DA and Cope (the breakaway Congress of the People). Whites, Coloureds and Indians voted for the DA, whereas a good deal of their allegiance went previously almost automatically to the ANC. An imbalance has built up in South African electoral politics that increasingly will tend to make the ANC more inward-looking; and in these locked-in tensions of inwardness and turf wars, factionalism will breed.

Here another interesting development occurs. Neither Gwede Mantashe (ANC secretary-general and SACP chairman), nor Zwelinzima Vavi (Cosatu secretary general), nor Julius Malema (ANC Youth League president) have taken seats in the National Assembly. There may be various every-day explanations for this, but a possible explanation is that if things get out of control in the cabinet or parliament, these non-parliamentarians will be able to exert pressure on government from strong vantage points with mass support outside the NA.

Zuma's own position is unclear. As the Cosatu/SACP battering ram against Mbeki, and with his own reserves of populist support, especially among Zulu-speakers, he is indispensable to Cosatu and the SACP. But they have reservations about his reliability. At the ANC national conference at Polokwane in December 2007 he was voted in as ANC president (with 60% of the votes, as against 40% for Mbeki). The next time the ANC votes for a president will be in 2012. This means Zuma has already served 18 months of his five-year term, and has three-and-a-half years left. If the mood in the party turns against him, he will be replaced in 2012 by a new president - for which position there is likely to be a rush of candidates. Some Cosatu/SACP leaders can't wait; nor can some other high profile politicians.

Exiles and inziles

Another factor in the Zuma camp's composition is the exile/inzile one. When the ANC (and other organizations) were banned between 1960 to 1990, many of their supporters went into exile. Those who continued the struggle against apartheid on the home front became known as the inziles. In this way, two groups emerged. The returning exiles, led principally by Thabo Mbeki, soon came to dominate the inziles, even persuading them to shut down the nationwide United Democratic Front, formed in 1983, which had been largely responsible for sustaining the struggle against apartheid within the country. Foreign and local donors were encouraged to divert financial support from local NGOs to the regrouped ANC. Except on specific issues, such as the convening of the Truth and Reconciliation Commission, even Nelson Mandela could not stand in the way of the exiles.

Today, with the exception of Zuma himself, all the big names from the exile period have been eliminated from cabinet office. Zuma presides over a government principally of inziles, plus lower level operatives from the exile period, and is much more "South Africa"-based in terms of life experience.

Some analysts see this as a good thing, in that (a) the "arrogance" and high-handedness associated with the ANC under Mbeki essentially reflected the character of the exile Apparat, of which Mbeki became a head at a very young age; and (b) nearly all ministers are younger than Zuma himself, who is 69. The entire Apparat in government from the 1990s (Essop and Aziz Pahad, Ronnie Kasrils, Manto Tshabalala-Msimang among them, all tied to Mbeki) is gone, removed from office in the ANC at the Polokwane conference in December 2007, which made a clean sweep of the ANC's exile Old Guard. Being younger than any previous ANC government, the new members of government may prove collectively to be closer to South African realities, more pragmatic, and less ideological than their predecessors. Or maybe not....

Manuel and Gordhan

Among those few members of Mbeki's government who were returned to office in the ANC's national executive committee at Polokwane, Finance minister Trevor Manuel was the principal target of Cosatu and the SACP. Change him, they said, and you change core financial policies. As these kingmakers of the Alliance wished, Manuel has now been moved, to function instead as minister in the presidency in charge of a new National Planning Division, which "will be responsible for strategic planning for the country to ensure one National Plan to which all spheres of government would adhere."

Few know what this commission means.

Just days before the announcement of its formation, Matthews Phosa (one of the ANC's top six leaders) said privately that the commission would never be created. The opposition Democratic Alliance sees it as "a step into the unknown." In addition to the possibility of turf wars in the government, there is uncertainty anyway over Manuel's shelf-life. There is speculation that it will not be long before he leaves government to take up one or other attractive international position. This is a matter of concern for the corporate world, but also worrying for it will be how the National Planning Division then continues to function, and the political mindset of the person who replaces Manuel: should this person prove, say, to be a Communist Party hardliner.

In Manuel's place comes Pravin Gordhan, 60, who as Commissioner of the SA Revenue Service since 1999 was the country's chief (and highly efficient) tax collector. Gordhan worked underground for the SACP for 20 years in KwaZulu-Natal. Manuel's policies, he said, will not change. "To put it plain and simple," he explained (Business Day, May 14), "the current policy remains exactly as it is." But if that is so, why change Manuel?

Gordhan no doubt will do what the ANC "leadership" wants him to do. Already, he has raised the issue of inflation targeting: the Manuel commitment that caused Cosatu and the SACP to froth serially at the mouth. On the day before Gordhan declared that Manuel's policies "will not change," he said (with reference to inflation targeting and other matters): "We want to have all role players in one room for as many days as is necessary...and emerge with a consensus on how we manage these sorts of issues in the best interests of SA." In other words, inflation targeting will be put into a melting pot . What comes out is most unlikely to be Manuel's policies.

Left-wing appointments

1. Finance under Pravin Gordhan (see comments above). According to analyst Anthony Butler, "Gordhan is regarded as a linchpin that will hold government's significant new power networks together." In other words, Chabane and Gordhan are ANC enforcers. At a higher level, Gwede Mantashe, ANC secretary general at Luthuli House headquarters, will also be an enforcer, but more actively so than his predecessor, Kgalema Motlanthe, now Deputy President.

2. Economic Development under Ebrahim Patel, 49, is seen by the opposition as "a step into the unknown." As general secretary of the Cosatu affiliated clothing and textile union (Sactwu), and a member of the central executive committee of Cosatu itself for two decades, Patel is a lifelong activist. He leans towards protectionism, a subject on which Cosatu has warred endlessly with Mbeki, asking for tariff barriers to be raised on imports (such as Chinese textiles) that undercut local manufacturers. He has also served on local and international public bodies.

In The Sowetan, Michael Hamlyn has described Patel as "an ardent socialist," adding: "If you imagine a firebrand agitator, red in tooth and claw, you will have imagined Ebrahim Patel." Zuma suggests that Patel's department should formulate the policies of the Department of Trade and Industry and of Finance, and help to remove long-standing tensions between them which have led to contradictory economic and trade policies.

3. Trade and Industry under Dr. Rob Davies, a member of the Central Committee of the SACP and a former Politburo member (who will work with two deputy ministers). In 2005 Davies was appointed deputy minister of Trade and Industry, focussing on international trade relations and industrial policy. With a doctorate from Sussex University and a focus on economics, he has been a member of parliament since 1994.

4. Higher Education and Training under Dr Blade Nzimande, general secretary of the SACP. Nzimande is an ambitious, high profile Zuma supporter, who has concerned himself with student affairs, trade unionism and academic life. Gwede Mantashe, secretary general of the ANC and SACP chairman, says of him: "We need a person who understands the concept of the skills revolution: that the skills revolution is critical for the success of this country. Therefore you need a revolutionary to do that revolution."

A strong grouping in the ANC, SACP and Cosatu had wished to see Nzimande as Deputy President. In January this year Nzimande began publicly attacking Kgalema Motlanthe, the former ANC secretary general who was appointed interim state President after the downfall of Mbeki, and is now Deputy President under Zuma. Nzimande declared that Motlanthe was part of the "old Mbeki crowd". He also criticised Motlanthe because he had refused to sign the SA Broadcasting Bill, which would have given the ANC full control of state television. Trouble could be brewing in their relationship.

5. Co-operative Governance and Traditional Affairs under Deputy Minister Yunus Carrim, a member of the SACP's Central Committee and its Politburo.

6. Transport under Deputy Minister Jeremy Cronin, deputy general secretary general of the SACP.

7. International Relations and Co-operation (formerly Foreign Affairs) under Deputy Minister Ebrahim Ismael Ebrahim, an SACP member and close colleague of Zuma from the time together in Robben Island prison.

8. Communications under retired General Siphiwe Nyanda, a commander in the Umkhonto weSizwe Operation Vula and subsequent Chief of the South African National Defence Force.

9. Justice and Constitutional Development under Jeff Radebe, member of the Central Committee of the SACP, who held cabinet office in Mbeki's government.

With so many Communists in control of economic departments, the SACP realises that this is a unique chance to capture real control of the country's government. (The M&G notes that "Countrywide the SACP has 99 legislators, 37 in the National Assembly".) Zuma, too, knows he has to tread carefully to restrain this powerful nucleus in government, so as not to frighten the horses in the corporate world. But he is skilled at playing tactical games. Repeatedly, he has said of South Africa's macro-economic policies: "Nothing will change." Repeatedly, Cosatu has retorted: "Everything will change."

The view of this article is that the ANC fairly soon will begin to dismantle Mbeki's macro-economic programme of Growth, Employment and Reconstruction (GEAR). Cosatu and the SACP are running out of time. The masses of the impoverished - the great majority of them black - are becoming impatient, and outbreaks, often violent, occur in the townships. Promised relief from poverty by the Zuma election campaign, they want that promise to be kept now. Zuma's backers may have no choice than to go for the jugular now instead of later.