David Gracey

David Gracey

David Gracey | Head of Foreign Exchange and Fixed Income Trading

Free Sushi for everyone

  • Our CEO recently announced his well-earned retirement from next year. The office has been abuzz with corridor talk about who his successor will be?
  • This got me thinking – what would happen if we chose our CEO’s the same way that we choose our politicians.
  • We would get a little mail drop with all the potential candidates who have put their names forward for the position. All of the names would have a “manifesto” attached providing a list of promises of the things they would do.
  • Pretty soon we would have a new CEO – the one who would provide.
    • Lamborghinis and Ferraris as company cars.
    • Free Sushi on Tuesdays and Crayfish Thermidor on Wednesdays. Why only two free meals? Because Mondays, Thursdays and Fridays would be non work days of course.
    • Overseas holidays would be sponsored.
    • Childhood education paid for, and tertiary education at Harvard or Oxford taken care of for those children of members of the Man-co, which of course is everyone who owns a set of earphones.
    • Double pension payouts taken care of.
    • Pay increases – triple the inflation rate for those staff whose performance reviews only just meet the required standard.
    • Share options for everyone.
    • And the occasional group conference in Hawaii or Lake Como to which all staff will be invited, all sleeping in 6 star hotels.
    • Free cosmetic surgeries for everyone over 45.
  • All would be well – for about 5 minutes until the shareholders realized what was happening.
  • This is the great weakness in democracy. World over we are led by people who make outlandish promises until the cheques need to be cashed.
  • For my Gen Z readers, cheques are little pieces...you know what, never mind, you can ask chat GPT what they are.
  • Take the USA for example...currently they are dealing with a debt ceiling crisis. They owe the rest of the world just shy of 32 trillion USD. But no leader will ever get elected if he promises to cut spending and increase taxes in order to bring down the deficit. Any such candidate would find him or herself elected only to the toilet of history.
  • Here in South Africa, we have a policy mix that has driven our own deficits higher and higher every single year since 2005.
  • Even in 2020-2022, when the commodity boom provided a welcome relief to the fiscus, our own leaders did not use the money to pay down debt. What they did was decide to hand out the many billions of extra revenue in social grants, which of course need to become a permanent fixture, especially leading into an election year.
  • I have written about South Africa’s economic ills many times in the past and there is no need to rehash here today.
  • And finally, the world has woken up to the fact that South Africa, in its current state is at worst, uninvest able, and at best, demands a much higher risk premium.
  • Promises made, need to be delivered on. But that’s a tough act when the elected leaders are spending their time gorging on crayfish and expensive cars, instead of providing basic services like electricity and roads.
  • Like the above CEO scenario, you pretty quickly run out of other people’s money.
  • Don’t ask why the rand is at 19.70 to the USD...ask why not?????
  • Free Sushi Anyone? Get it now because next week it could be much more expensive.