The Doldrum in Platinum – Part II

This is the second article in a three part series. Our focus in this article will be on the state of South Africa and its currency.

South Africa – on the verge of being a failed state

As a primer, we encourage you to read the following two articles to truly appreciate the current state of affairs in South Africa:

  1. A fascinating piece written by Mr. Michael Fridjhon, titled: South Africa: The Rambo Nation.
    • Given the rate at which things are falling apart, it’s evident we are running out of time. Forget about downgrades, #GuptaLeaks and elective conferences. If we don’t address what is happening, it’s only a matter of time before the kind of widespread looting which follows a natural disaster will become a norm. If the law cannot hold, lawlessness followed by martial law (replete with its own abuses) is what awaits us – and it’s just around the corner.

  2. A brilliant piece in today’s Financial Times, written by David Pilling, titled: How corruption became ‘state capture’ in South Africa.
    • The National Prosecution Authority, headed by Shaun Abrahams, a Zuma appointee, has denied suggestions that it prosecutes selectively. Mr Zuma, for one, has been a beneficiary of the office’s busy workload. So far, he has avoided prosecution on no fewer than 783 pending charges of fraud and graft.

Please click here to read the article.

 

A Melt Up in US Equities

  • Low levels of VIX get all the attention; the often attributed reason is complacency, the often prescribed medicine is caution.
  • Equity risk premium relative to Aaa rated bonds and Baa rated bonds do not scream over valuation.
  • We have put together a presentation in which we present 21 charts that should make any one predicting doom and gloom on the US equity markets reconsider their stance.
  • We too are guilty of having given up on this market way too prematurely but the breadth of the market, which got us bearish in the first place, is now showing signs of underlying strength and it behooves us to recognize it.

Please click here to view the presentation.

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