Disciples of “the-less-regulation-the-better” school (of which I was a supporter until 2008), lists the places where the state should (could) be involved in, such as defense (the army), safety and security of citizens (police), education, and health services. Banking was never part of this list. At least not since the 1970s.

That was a mistake. For the same reasons that the army, police and schools should be in the hands of the state, the banks should also be in the hands of the state.

At best, banks should be managed as public/private sector joint-ventures, with the state holding 51% and thus, full control.

To leave banks and banking to private individuals, is a responsibility too big for them to handle. We’ve been reminded of that how many times in the past 5 years now. The JP Morgan bugger-up is just the last straw on the camel’s back (for essentially-free marketeers like me). Nationalise the lot!

I must be missing out on something, because I don’t understand how these countries are supposed to finance such business cycle  stimulation programmes. We’re beyond the point where Keynes can help these countries.

Let’s take it from the start once more:

* over many years the countries in the West built their state debts to levels just manageable;

* then the greedy bankers came (in about 2008) and the countries in the West were forced to roll out massive stimulation programmes to prevent the world economy from imploding (in 2009 and 2010);

* these unplanned and unexpected programmes were financed with more debt;

* and so the whole lot suddenly saw (in 2011) their debt had risen beyond sustainable (servicable) levels;

* this problem was especially acute in Europe, where a few countries (Greece, Ireland, Portugal, Spain and Italy) suddenly found no takers for their newly issued debt paper;

* crisis….;

* into this crisis Angela Merkel stepped and saw confidence would only return to the debt markets once the debt-making countries are seen to be living within their means;

* on behalf of the German people she promised to stand in for debt of others, if they stopped making so much new debt (ie. run big deficits);

* at the time this was the only choice Angela had;

* of course, this pushed the already weak economies into recession, but again: this was the only choice then;

* once confidence had returned (yes, yes…I’m going through this with broad brush-strokes), and the economies started crumbling, the Americans, IMF, The Economist, new French president and everyone who is anyone started shouting: stimulate, stimulate.

My question is: with what? There is no money to stimulate. The current situation came about for this very reason, namely not enough money to finance the first crisis (the banker-induced fuck-up).

So, we’re in a dead-end. Economies crumbling, governments falling, and no way out of the downward spiral.

None of the above voices has said anything (yet) about what should be in such stimulation programmes, and who would finance them.

But, it won’t be long now until reality hits home.

At the latest, when this scenario unfolds: Greece decides to throw the saving plans overboard and says it’ll stimulate the local economy instead – with lower taxes, increased social spending etc. etc. On the same day they announce this, the fragile confidence in the financial markets evaporates. Soon thereafter Greece realizes there is no way to stimulate themselves out of their misery. (The IMF will jump in, but it will also only pay for non-current expenditures; there is no money.)

Other crisis countries come to the same realization, namely: they’ve arrived in a cul de sac. A point where there is no breaking out of the downward spiral, without a major re-think.

The euro crisis is not behind us. It may just be starting. And Euroland may still splinter.

Comment: Remember, I’m no financial adviser. Secondly, good news that Yuri Milner is now at DST. Thirdly, just a pity about the Groupon stake in the Mail.ru portfolio. I’m sure Naspers doesn’t like that part.

The SKA needs clear skies, uncluttered with radio signals. No better place than the Karoo for that. Overnight in the flat landscape of this semi-desert and you’ll be overwhelmed by a star-filled night-sky so dominant you’ll think it wants to crash down on you. Unbelievable. On its own, this is reason enough for tourists to pilgrim down from the northern hemisphere (with its boring night-sky) to SA, I think. Quite apart from the animals. (But, I might be a bit subjective.)

The article, written by Nina Klotz out of Johannesburg for the influential German business daily, suggests (quite subtly) that SA (and neighbouring states) would be the better place to build the SKA, a collection of telescopes and still-to-be-built computers 100 times more powerful than anything existing, and which will be able to look into the universe as far back as the Big Bang.

SA’s man-behind-the-project Bernie Fanaroff, as well as other government people such as science deputy minister Derek Hanekom, are among the quoted. The overall impression is one of a country that is doing everything in its power to grab this chance to host a prestigious future-project that’ll hug the headlines in many countries (70 research institutes in 20 countries are involved), provide jobs, bring foreign exchange into the country and (hopefully) “begeister” SA’s youth.

People in the know have said for some time now the SKA project is likely to be divided into two by “the jury” next week, to make both Australia and SA happy. Still, that would be a disappointing second-best solution for SA.

Who knows, maybe this article helps SA to the full cake.

How did I get onto this depressing topic (yet again)? Well, this article brought me to it. Read it and weep. If SA could close this gap with the rest of the world, thousands of new jobs will spontaneously jump out of nowhere, the internet economy will wake up and start catching up with the rest of Africa (yes, SA is lagging behind Africa) and then even the rest of the world (it’s way behind everyone). All of this will happen naturally – without the government having to do anything.

But, first government must invest in broadband infrastructure (which will create a lot of jobs on its own), to bring broadband costs for the consumer down and stretch consumer usage (at current speeds no-one wants to sit in front of a computer).

The article also answers the question, “why aren’t there more globally successful internet entrepreneurs in SA?”.

A (big) part of the answer: when an IT developer switches his computer on in SA in the morning to start his working day, he is already 80% less productive than his counterpart in Europe. Because a page takes almost 8 times longer to load on a screen in Cape Town than in Stuttgart. Thanks to the SA government, IT developers in SA are completely and utterly unproductive compared to (almost everywhere else in) the world.

How much longer do we have to wait, President Zuma?

On 11 December 2008 I first suggested SA’s property market is hugely overpriced. And that a long period of slow “price rectification” was facing South Africans. In 2010 I repeated the mantra. In October last year my “gut feel statement” got some serious support and scientific backing in the form of SA’s property guru Erwin Rode (read here).

Today I received his latest newsletter with the best analysis of the situation I’ve seen to date (read here).

In short: real property prices* are on average 25% too high and it will take many years to deflate this price bubble. He suggests five years of five percent per year declines (in real prices!) are what we may see.

* A real decline/rise is what you get when you deduct the inflation rate in a particular year from the nominal rise in that year. (Or add it to a nominal decline!) For example: nominal house prices rose on average 1% in year x; in the same year building sector inflation came in at 6%; in year x real prices would then have dropped by 5%.

So, what would a realistic purchase price be for the average house advertised for R2 million today? R1.5 million. You could also hang on and sell it for R1.59 million in 2017. (Based on assumption of a 25% drop in real prices in the next 5 years.)

Life is tough – and then you die.

http://www.moneyweb.co.za/mw/view/mw/en/page295053?oid=560713&sn=2009+Detail

Apparently, Naspers had turned Zattoo down (already a few years ago).

Now, I hear through the grapevine, that Swiss media group Ringier (which is an internet competitor of Naspers in East Europe and East/West Africa) is talking to Zattoo. Ringier hasn’t been in TV until now and wants to get in. Apparently, price is the only thing still standing in the way of a deal.

It’ll be such a pity if Naspers lets this one slip through the fingers.

Here is how Zattoo describes what it does:

Zattoo (www.zattoo.com) is a company in the Live WebTV market with offices in Zurich, Switzerland and Ann Arbor, Michigan, USA. Zattoo provides live streaming TV channels on connected devices.

We are currently operating on PC, iPhone, iPad, Windows Phone 7 and Android smartphones, with more devices in planning. Our small team of roughly 25 employees are the pioneers of this space and together we have created this leading service that has attracted 9.0 million registered users across Europe.

We provide a live TV service in Switzerland, Germany, Spain, France, UK, and Denmark. Zattoo is the origin and most active further developer of concepts and technology in this space. In addition, we have developed the most comprehensive recording-in-the-cloud solution thinkable. We successfully offer this state-of-the-art catch-up TV and time-shift service in Switzerland.

But, last year I discovered I can do something – I can change someone’s life with a loan as small as €25 and later get it back (when he’s on his feet). What’s more: I can choose who I want to help and/or in which country I want to help someone.

And I can see what he and his family look like and receive regular updates on progress with the repayment of my €25 loan. Of course, I could also give more. But, the magic is: €25 does the trick, because we’re dealing here with a “crowd-lending” action (that’s my word for it). And at the end you get your money back. Into your PayPal account. That is, if you don’t decide to finance another poor guy’s business idea.

It’s so much fun for so little time and effort, it’s hard to believe it’s true. And hard NOT to participate.

The not-for-profit organization sits in California and the website is at www.kiva.com.

I started doing my bit last year by lending €25 to a family of clothes manufacturers in Tanzania. Together with a number of lenders around the world we got around €800 together in no time. And about 6 months later the family had bought the stitching machine they wanted and repaid my €25.

This week I “re-loaned” my €25. This time to a cattle trader and his family in Zimbabwe. Here is a photo of the group. (Hope you can see it…might have to be logged in.)

This time the crowd-lenders (37 of them) got over €1,250 together for the cattle traders in just a few days. The group must pay back over 8 months. I’m confident I’ll get my money back (no interest paid). And if I don’t, it’s OK – the people of Zimbabwe have suffered enough under Uncle Bob. They deserve a break.

(I can see pics of the other 36 lenders and contact them, if I want. For instance, there’s a young guy from Berlin in my “lender-crowd” (another word-creation of mine), with outstanding loans to 37 business ideas around the world! I can’t see for how much, but even if it’s only for the minimum (€25), his exposure would still add up to an impressive €925.)

But, that just by the way. The point is: Kiva now makes it possible for everyone of us to become “mini-development banks”, finding and funding deserving business ideas in all poor countries of the world. And later getting our money back.

This is such a compelling idea, it’s a must-do. So, go to www.kiva.com and check it out. You’ll be amazed.

Unfortunately, South Africa hasn’t yet lifted its lame arse off the ground (as one of just a few countries in the world not participating with Kiva). So, you won’t be able to fund a deserving South African down-an-outer (yet). Until South Africa gets its arse into gear, you can do Zim, or Tanzania. Or any of a number of African countries.

So, check it out!