As the US and UK media coverage of their property crashes continues to increase exponentially, I am shifting my opinion of our own appallingly sparse coverage. I used to think it was just paltry because we have no tradition of economics reporting in this country. Now I'm starting to smell a rat.
I believe that our media are either deliberately keeping quiet on the bursting bubble, or else are being subtly urged to focus on other stories. Why? Because our media are all owned by people who have property fortunes to protect.
Exhibit A is Avusa, what used to be Johnnic. Avusa owns, and therefore subtly dictates the editorial policy of the following extremely influential sources of financial and investment news: Business Day The Financial Mail SUMMIT TV I-Net Bridge
Those of you who listen to Lindsay Williams’ Fine Business Radio (sponsored by Business Day and Summit TV) will know that he hosts a regular Wednesday slot with, wait for it, the CEO of a property company.
Avusa also owns: The Sunday Times The Herald The Daily Dispatch SA Home Owner SA Home Owner Buyer’s Guide Top Huis Built Magazine (construction industry) The Home Show
The Board of Directors of Avusa makes for interesting reading from a property bubble point of view:
Dumisa Ntsebeza, on the board of Barloworld which sells construction equipment. The biggest shareholder of Barloworld is the Public Investment Corporation, which has R8.5 billion invested in property. (August 2007, PIC head Brian Molefe tells Parliament that the US subprime problem is “a temporary matter, a glitch in the market” – Fin24 – Clearly they are now in deep doo-doo, and cannot afford the panic to become public knowledge)
Brand Dods, on the board of Massmart, which owns Builder’s Warehouse.
Tommy Oliphant, previously chairman of Aventura, government-owned group of holiday resorts.
Then come a whole slew of big shots at Tokyo Sexwale’s Mvelaphanda Group, which has massive exposure to property in all sectors
Mark Willcox, has property background in the US, is also CEO of Mvelaphanda Group.
Mikki Xayiya, Executive Deputy Chairman of Mvelaphanda Group. Both Xayiya and Mark Willcox are investors in the 440-hectare Hemel en Aarde wine estate near Hermanus, where golf estates are sure to follow.
Shakes Matiwaza, Group Investments Executive at Mvelaphanda Group
Yolanda Cuba, Chief Executive officer of Mvelaphanda Group.
Zolani Mtshotshisa, Group Executive: Corporate and Public Affairs, Mvelaphanda Group.
The second major media stable is Naspers. They’re moving more into TV, but their print stable includes Die Burger, Beeld, Volksblad, The Natal Witness (50% shareholding), the Daily Sun, True Love, Huisgenoot and You, Drum, and Finweek. In other words, they’re speaking directly to the masses (You, Huisgenoot, True Love and Drum) and have buttoned up the Afrikaans market. But are they telling the masses about the property crash? Don’t bet on it.
And their board of directors? Let’s have a look.
Fred Phaswana, chairman of Transet when it sold the V&A Waterfront to Dubai consortium.
Boetie van Zyl, on the board of construction firm Murray & Roberts
Francine-Ann du Plessis, a director of the Industrial Development Corporation (IDC) of South Africa (with vast interests in property), and the KWV group.
Ben van der Ross, chairman of Bonatla Property Holdings.
Lourens Jonker, owns the Weltevrede Wine Estate, former chairman of the KWV group. He is a director of Absa, the country’s biggest mortgage lender.
I could go on, but I don’t think I need to. None of this is to say that the above people are trying to suppress news about the property crash. Not at all. I’m sure most are honest and talented businesspeople. But the people below them know where their bread is buttered, and will respond to even the subtlest hint about the direction the news should take. We cannot be so naïve as to believe that our media stables have our best interests at heart, especially when it comes to telling us the facts about the deflating property bubble.
I think you may have something here, I would not go so far as to suspect a full blown editorial policy, rather a 'don't rock the boat' friendly suggestion from management. The paucity of coverage is frightening more than anything else, it shows a lack of intellectual vigour, or maybe it's as simple as a blind hope that 'it can't happen here'
Hard for me to judge from 6,000 miles away, but I have Googled 'SA house price crash' and similar terms and nothing comes up, apart from this blog, it's how I found it !
Way to Google them media barons, Mediaheretic! Nice to see someone scratching through the fine print. I totally agree that our pathetic financial media have been neutered by vested interests - I often marvel at the Mail&Guardian, with its brave independent editorial stance, oddly silent about property as every week that huge glossy Pam Golding insert falls out of the paper.
Of course people get the media they deserve, or are educated to understand. I would estimate that there are fewer than 2 million out of 47 million in this country who are up to doing any kind of critical reading of anything, whether the business pages or an election poster. And of course it suits the info barons and the government for it to stay like that.
I was wondering when someone would post something up on this weekend's open thread. Such a good point mediaherectic, and well researched!
I totally agree. You broke down the property market's connection with the media through the filter of Noam Chomsky's 'Manufacturing Consent.' It is totally spot on. The media is owned by conglomerates and these fraternal powerhouses have very real economic and idealogical interests, as well as having strong political ties. Its a very simple concept...a person wouldn't cut off their nose to spite their own face, a conglomerate wouldn't sell a story to damage its profits.
I think if there was a single voice to confront on the matter of S African media, that voice would say that it would be irresponsible to create such a fear that would encourage the population to painic. This panic would create economic chaos and lead to an implosion that we are seeing in the US and the UK. Of course this would seem logical and that is why it is nearly impossible to put a finger on the truth. This is why there will never be another French Revolution. The puppetmasters can hide behind the voice of logic, and the majority of people can't really get a grip on it anyways.
I also beleive that there is a certain kind of psychology in middle class S Africa that basically says FU to the rest of the world. It defies logic, reasoning, and objectivity (although there is no true objectivity.) It might have roots in the kind of paradigm that kept apartheid in effect for so long. The North Koreans have this kind of mentality ten thousand times over...but ours is more subtle and therefore more damaging.
I think S Africans perceive the rest of the world as operating on a completly different set of rules than themselves. Maybe it has roots in the identity of the country within the continent and the rest of the world. S Africans dont see themselves in the same league as the UK or the US, or even the rest of Europe and Australia...that's the major leagues. But, we are the head of the pack in Africa. I think S Africans also believe that they can withstand any kind of struggle just because they have been struggling so long. They think the resiliency of the economy as it survived through sanctions during apartheid is testament that it can survive through anything. But, the world has changed much, and SAfrica is very much part of the GLOBAL economy. We will be feeling the pain of this global meltdown pretty soon, and even MORE than the rest of the world. Our lack of infrastructure,our corrupt inept gov leaders, and the fact that there are already so many that aren't just below the poverty line but barely above the starvation line will lead us to become overwhelmed and things could get very ugly.
But, this story will break. There will become a point where it becomes undeniable that SA is part of the property/credit/global meltdown. One of these large companies will start to tell the story and it will become PROFITABLE. It will catch on like a virus and BOOM! everyone will be telling it and the race for the most spectacular meltdown story will be on. THEN the country will panic and things will be even worse than they should be.
Okay, but what about our saving grace? What about the most intelligent media outlet that we have in this country?
MAIL AND GUARDIAN!!
Are these guys also in the hands of these property moguls? Why haven't they gone wild with these stories of the property bubble bursting?
Its a shame and its probably going to lead to racial tensions as well. The last ANON had some brilliant points and such a macro-view of the whole thing that makes sense.
I would like to add something to that brilliant post, which was started with mediaherectic's brilliant post.
As was said, the French Rev cannot happen again and ESPECIALLY not in SA. When apartheid ended the method of creating even playing field amongst the whites and blacks was to replace the figureheads and let equality trickle down. Certain practices like affirm action were implemented and the theory was that with the guys at the top being black, they would restructure things so that wealth and power would trickle down to the oppressed black Africans. Who were the big supporters of this? The Apartheid heroes!! They black guys at the top who were going to take power!! They discouraged an all out revolution and convinced the people that this way was the best.
What are we left with? Just a replacement of the big dogs at the very top of the food chain. They are untouchables. This is a class issue and not a race issue, but in order to save their own asses they will make it into a race issue. They will never get caught. They abuse their power and gain undeserved wealth that exceeds our imaginations.
I also think that they are selling off as much of their investments in property and construction at the moment, and thats why they don't want this property bubble stuff to break into the media.
Not to put the M&G down,but if there is one truly independent investigative journalism publication in this country it's name is Noseweek. I buy it every month and so should you.
Mediaheretic? Awesome post! Ya, just go read through the latest Who Owns Whom (RIP Robin McGregor) and you can see just how incestuous big business, media and politics is in SAfrica.
You are so right. There's no big conspiracy or any real pressure on the media as it takes too much effort to conceal it. The simple reality is that if you work for a publication and your boss own a house in Suncet Links, then you're going to think twice about writing a story about rising sea levels and storm surges nuh?
Last Anon? Spot on. These lads and lasses are probably all scrambling to divest themselves of a substantial part of what is essentially very illiquid investments, while the going is still good. And in the nature of all scavengers, whoever gets a rebalanced portfolio first will start capitalizing on the profitability of fear (and at the same time reduce the competition).
Every day I am absolutely amazed at how ignorant SAfrica is of what's going down on a global scale. The most telling is how the 'free' press, the SABC and e-TV report business news. Nothing, but nothing of consequence relating to the real issues. Like e-TV business reporting... Intl Markets... Nasdaq... and that's it! As if the Nasdaq matters bwahahaha.
The really sad thing is that most people here feel themselves inured to the global issues as BC said. Well, the rude awakening is coming. Manufacturing down 11% is a staggering drop of depressive proportions and it's only starting.
Like I said in a previous post, it seems that people are taking wild hope from an expected cycle of rate drops coming? Are SAfricans truly so ignorant? What can possibly be good about interest rate drops in an economic meltdown? It is merely confirmation of how bad things are going to get when rate drops are forced on an economy. Sure bonds are cheaper, but the underlying fundamentals of these rate drops spells disaster for the economy since manufacturing and exports recede, and so does employment, and then who is going to buy those McMansions?
I don't think there is a single company in SA this year which is either going to pay bonuses or increases (those that do might as well close their doors today) and that makes the average Joe 13% poorer over the past 12 months alone.
You can bet your shorts that the Avusa's of this world are shaking with fear. If an astute and conservative genius like Buffet manages to lose one third of his wealth in one year, can you imagine what our local free-loading clowns have done to their own portfolios?
Yes, it's most definitely in their own interests for the average Joe to remain blissfully ignorant of the compounded effects of deflation and fear
Perhaps our economy is somewhat isolated from the global economy. Of course we are part of the global economy, but countries are reliant on it to varying degrees. The UK is heavy on global trading, the US is a consuming/credit nation, S Korea and China manufacture goods for the US and UK. These countries all have a very symbiotic relationship like vital organs in a body.
Maybe we are the appendix?
Look, I know that we are going to feel a big hit, but maybe not on such a grand scale or with the same force of these other countries?
In America everyone spends like no tomorrow. If you go to any town big or small you will feel like you are in a flipping car show. Large trucks and SUVs, muscle cars, luxury cars. When I go there I always wonder how in the hell EVERYONE can seem to afford these things. I swear, its difficult to find a car thats over ten years old. But, in SA we do keep better care of our posessions. We make things last. There are so many cars that are at least ten years old on the streets and every other car is a Toyota Tazz, and every other car other than that is a Chico! Cheap cars that are well kept. Maybe it is our spending frugality that might help us weather the storm?
It isnt just cars either! Americans eat like machines and they have the kg's to prove it. They eat rich, high cal foods that are expensive to boot. They live and breath off of credit. The US does not have as strong of a culture as we do, and their consumption is probably their strongest cultural value.
I am not in denial, I know the crunch is coming. We did make a mess of the property industry. But is it realistic that it will not be AS bad in SA? I think the prime interest rate in the US is like 6%...does that indicate that maybe we havent tapped our pockets dry just yet?
Sincerely,
Roberto
PS- www.seeff.com just remodeled their website and its pretty spiffy! Maybe better marketing will save the property industry!! Just joking.
I think it's going to hit here as hard as anywhere else. Scroll back a few days on this site and you'll see my post about how our bubble was by far the biggest in the world. The Economist has also just published an article stating (someone unfairly) that we are the most risky emerging economy in the world. Make no mistake: it's going to klap us very very hard.
I must also disagree about South Africans' spending habits. Yes, America is awash with big cars, big houses and big stomachs, but remember that there are 300 million of them, and perhaps 250 million of those are middle class. Our middle class probably numbers about 5 million. And yet despite having such a tiny middle class our roads are clogged with cars. Yes, there are Tazzes and Chicos; but there are also hundreds of thousands of Beemers and SUVs - far more than our national average income suggests there should be. Trust me, South Africans are just as addicted to credit and conspicuous consumption as Americans, perhaps even more so because we don't even had the Americans' tradition of shopping around and haggling for a bargain.
I think it's time we hope for the best and prepare for the worst.
Its reasons like this that we will always be a third world country. We have too much of controlling in areas that require free speech!
I always believed that the media were fools when it came to free speech and reporting on what is happening and affecting the "every day mans" pocket!
SABC is government owned and extremely politically inclined. I hate it when we mix politics and media. Its dictatorial to say the least!
As long as we (individuals) see things for what they are, we will be fine. The rest can continue to be brain washed by those fools that think they run the country and everyone in it!
Nice post mediaheretic - some excellent sleuthing.
I started posting here and at realestateweb a few years back when the property bubble was becoming blatantly obvious and yet no one in the mainstream media was talking about - there was just endless property hype from property people trying to feed the bubble to ever greater proportions.
There were warnings of the perfect storm heading our way from an enlightened few, but they were being totally ignored.
Part of the problem is that much of the advertising in the newspapers comes from property ads. They aren't going to tell the truth and upset all their estate agent clients.
CT Bubble has done an excellent job with this blog and it is great that it is generating such thoughtful debate nowadays.
The scary thing is, now that the anticipated financial meltdown has arrived, it is hard to see where it will all end. The property part is easy, I can't see it having much attraction for many years to come.
It is the rest that concerns me. Predicting the meltdown was fairly obvious - predicting how the world is going to emerge from it is a whole different ball game. It is all a bit unnerving if one ponders on it too long.
A business journo friend once told me how censorship occurs in the business media:
1 - Most stories are given to you to write. Business uses media here as a marketing tool. 2 - When phoning your contacts and sources they will inform you of scoops and developments but often ask you that you do not write about them for fear of retribution from their superiors, even if they remain anonymous. If you ignore the request you lose the source. 3 - The editor decides what is an acceptable story, language and words via codes of ethics, responsible journalism, regulation and guidance etc etc
Media heretic makes sense but he must also admit that the property industry, in all its forms, is the biggest industry in the world by far.
Linking the directors of Avusa back to property is no science. If one was to look at directors of every big company, there would be a link back to property bar none.
Property is the best wealth creator of any asset. The fact that so many influential and rich people invest in property makes one wonder.
There is no media conspracy to hide the fact that the bubble has popped. Its quite obvious but in the long term, nothing but nothing beats property in terms of return of investment and wealth creation.
Anonymous above, I do not think that mediaheretic disputes that a lot of wealth creation comes through property. Actually it was the point, along with the protection of that wealth creation ability, of his/her post.
If you have done your research on media there is no other conclusion other than media is used to further the interests of groups allied to, or in control of the media. We can see this locally with the SABC.
Moving further afield we can take the case of Somalian pirates. It is not a well known fact, due to the MainstreamMedia, that the pirates were or are mostly fishermen. With the collapse of their government obviously there is no coast guard or protection of their territorial waters. Multinationals have for years been taking advantage by illegally overfishing in their territorial waters while other multinationals have been dumping toxic waste in the same waters, discovered after much washed up on the beaches after the tsunami. (please avoid questioning how one multinational can be fishing while the other is dumping toxic waste) The so called "pirates" have now with less fish to catch and many polluted beaches have taken to protecting their resources and obviously having found it lucrative other armed groups have come aboard so to speak.
The point is that everyone is scared into believing, through the MainstreamMedia, that our way of life is under threat. What has actually happened is that the Multinationals profits have once again come before the environment and the people and these are now under threat. Now that the people have reacted they are demonized and the MSM actively supports the multinationals by failing to tell the true story.
Anon, I'm not sure where you're getting your facts but I'm afraid property is nowhere near the world's largest industry.
According to the World Bank, tourism is the biggest industry. Others put food production just ahead of tourism, while most agree that the arms trade is in the top three or four. I doubt whether property is even in the top ten industries in the world.
You've also clearly bought the official line about property as a wealth generator. Do your homework and you'll discover that historically property is no better or worse than host of other assets. And for the next ten years it's going to be worse.
Your final assertion is nonsensical. If nothing beats property for personal wealth accumulation, why aren't the ten richest people in the world all property investors?
Well, after reading all your blogs, i can only say that i am retired, have 2 properties abroad that i let and i live very well with the rents i have been receiving for the last 15 years. I have no bond. People, nowadays who depend on their pension or shares, will have to work until they drop. So personally for me, properties was the best investment i made and i retired at 50 years old.
Firstly, the number of people who can buy two properties, and I am assuming live in a third, are few and far between. I imagine these properties are overseas, so you are making quite a bit with the exchange rate and what not.
And to have no bond! How logical!
Thats all fine and dandy, but you see, this blog is for S Africans, and most S Africans are not wealthy enough to carry out the plan that you seem to think was based on good planning, common sense, and hard work. I am betting your lifestyle is based rather on family money (or some kind of easy cash) and moving to a developing country. I am not sure about the easy money part, but your lifestyle is definitely partially a result of moving to a developing country.
The way you 'achieved' your lifestyle is not a viable course for 99.9% of us.
Plus, to retire when you are 50 is laughable. What kind of sorry lazy ass retires when they are 50? Perhaps you hated the line of work you were in? In any case, you should find another blog to comment on. One geared to lazy assed rich kids who became lawyers and hated it but did it because they didnt have a soul or a family, and so they could retire when they are 50.
Could you imagine what kind of world we would live in if everyone was like you? It would really suck.
23 comments:
As the US and UK media coverage of their property crashes continues to increase exponentially, I am shifting my opinion of our own appallingly sparse coverage. I used to think it was just paltry because we have no tradition of economics reporting in this country. Now I'm starting to smell a rat.
I believe that our media are either deliberately keeping quiet on the bursting bubble, or else are being subtly urged to focus on other stories. Why? Because our media are all owned by people who have property fortunes to protect.
Exhibit A is Avusa, what used to be Johnnic. Avusa owns, and therefore subtly dictates the editorial policy of the following extremely influential sources of financial and investment news:
Business Day
The Financial Mail
SUMMIT TV
I-Net Bridge
Those of you who listen to Lindsay Williams’ Fine Business Radio (sponsored by Business Day and Summit TV) will know that he hosts a regular Wednesday slot with, wait for it, the CEO of a property company.
Avusa also owns:
The Sunday Times
The Herald
The Daily Dispatch
SA Home Owner
SA Home Owner Buyer’s Guide
Top Huis
Built Magazine (construction industry)
The Home Show
The Board of Directors of Avusa makes for interesting reading from a property bubble point of view:
Dumisa Ntsebeza, on the board of Barloworld which sells construction equipment. The biggest shareholder of Barloworld is the Public Investment Corporation, which has R8.5 billion invested in property. (August 2007, PIC head Brian Molefe tells Parliament that the US subprime problem is “a temporary matter, a glitch in the market” – Fin24 – Clearly they are now in deep doo-doo, and cannot afford the panic to become public knowledge)
Brand Dods, on the board of Massmart, which owns Builder’s Warehouse.
Tommy Oliphant, previously chairman of Aventura, government-owned group of holiday resorts.
Then come a whole slew of big shots at Tokyo Sexwale’s Mvelaphanda Group, which has massive exposure to property in all sectors
Mark Willcox, has property background in the US, is also CEO of Mvelaphanda Group.
Mikki Xayiya, Executive Deputy Chairman of Mvelaphanda Group. Both Xayiya and Mark Willcox are investors in the 440-hectare Hemel en Aarde wine estate near Hermanus, where golf estates are sure to follow.
Shakes Matiwaza, Group Investments Executive at Mvelaphanda Group
Yolanda Cuba, Chief Executive officer of Mvelaphanda Group.
Zolani Mtshotshisa, Group Executive: Corporate and Public Affairs, Mvelaphanda Group.
The second major media stable is Naspers. They’re moving more into TV, but their print stable includes Die Burger, Beeld, Volksblad, The Natal Witness (50% shareholding), the Daily Sun, True Love, Huisgenoot and You, Drum, and Finweek. In other words, they’re speaking directly to the masses (You, Huisgenoot, True Love and Drum) and have buttoned up the Afrikaans market. But are they telling the masses about the property crash? Don’t bet on it.
And their board of directors? Let’s have a look.
Fred Phaswana, chairman of Transet when it sold the V&A Waterfront to Dubai consortium.
Boetie van Zyl, on the board of construction firm Murray & Roberts
Francine-Ann du Plessis, a director of the Industrial Development Corporation (IDC) of South Africa (with vast interests in property), and the KWV group.
Ben van der Ross, chairman of Bonatla Property Holdings.
Lourens Jonker, owns the Weltevrede Wine Estate, former chairman of the KWV group. He is a director of Absa, the country’s biggest mortgage lender.
I could go on, but I don’t think I need to. None of this is to say that the above people are trying to suppress news about the property crash. Not at all. I’m sure most are honest and talented businesspeople. But the people below them know where their bread is buttered, and will respond to even the subtlest hint about the direction the news should take. We cannot be so naïve as to believe that our media stables have our best interests at heart, especially when it comes to telling us the facts about the deflating property bubble.
Thanks God for blogs like this one.
Wow that kind of research puts any post I've ever made to shame.
mediaheretic said....
'Thanks God for blogs like this one.'
Ammen to that!
Responding to mediaheretic's post
I think you may have something here, I would not go so far as to suspect a full blown editorial policy, rather a 'don't rock the boat' friendly suggestion from management.
The paucity of coverage is frightening more than anything else, it shows a lack of intellectual vigour, or maybe it's as simple as a blind hope that 'it can't happen here'
Hard for me to judge from 6,000 miles away, but I have Googled 'SA house price crash' and similar terms and nothing comes up, apart from this blog, it's how I found it !
Way to Google them media barons, Mediaheretic! Nice to see someone scratching through the fine print. I totally agree that our pathetic financial media have been neutered by vested interests - I often marvel at the Mail&Guardian, with its brave independent editorial stance, oddly silent about property as every week that huge glossy Pam Golding insert falls out of the paper.
Of course people get the media they deserve, or are educated to understand. I would estimate that there are fewer than 2 million out of 47 million in this country who are up to doing any kind of critical reading of anything, whether the business pages or an election poster. And of course it suits the info barons and the government for it to stay like that.
BC
I was wondering when someone would post something up on this weekend's open thread. Such a good point mediaherectic, and well researched!
I totally agree. You broke down the property market's connection with the media through the filter of Noam Chomsky's 'Manufacturing Consent.' It is totally spot on. The media is owned by conglomerates and these fraternal powerhouses have very real economic and idealogical interests, as well as having strong political ties. Its a very simple concept...a person wouldn't cut off their nose to spite their own face, a conglomerate wouldn't sell a story to damage its profits.
I think if there was a single voice to confront on the matter of S African media, that voice would say that it would be irresponsible to create such a fear that would encourage the population to painic. This panic would create economic chaos and lead to an implosion that we are seeing in the US and the UK. Of course this would seem logical and that is why it is nearly impossible to put a finger on the truth. This is why there will never be another French Revolution. The puppetmasters can hide behind the voice of logic, and the majority of people can't really get a grip on it anyways.
I also beleive that there is a certain kind of psychology in middle class S Africa that basically says FU to the rest of the world. It defies logic, reasoning, and objectivity (although there is no true objectivity.) It might have roots in the kind of paradigm that kept apartheid in effect for so long. The North Koreans have this kind of mentality ten thousand times over...but ours is more subtle and therefore more damaging.
I think S Africans perceive the rest of the world as operating on a completly different set of rules than themselves. Maybe it has roots in the identity of the country within the continent and the rest of the world. S Africans dont see themselves in the same league as the UK or the US, or even the rest of Europe and Australia...that's the major leagues. But, we are the head of the pack in Africa. I think S Africans also believe that they can withstand any kind of struggle just because they have been struggling so long. They think the resiliency of the economy as it survived through sanctions during apartheid is testament that it can survive through anything. But, the world has changed much, and SAfrica is very much part of the GLOBAL economy. We will be feeling the pain of this global meltdown pretty soon, and even MORE than the rest of the world. Our lack of infrastructure,our corrupt inept gov leaders, and the fact that there are already so many that aren't just below the poverty line but barely above the starvation line will lead us to become overwhelmed and things could get very ugly.
But, this story will break. There will become a point where it becomes undeniable that SA is part of the property/credit/global meltdown. One of these large companies will start to tell the story and it will become PROFITABLE. It will catch on like a virus and BOOM! everyone will be telling it and the race for the most spectacular meltdown story will be on. THEN the country will panic and things will be even worse than they should be.
Pete Van Vleet...
Okay, but what about our saving grace? What about the most intelligent media outlet that we have in this country?
MAIL AND GUARDIAN!!
Are these guys also in the hands of these property moguls? Why haven't they gone wild with these stories of the property bubble bursting?
Its a shame and its probably going to lead to racial tensions as well. The last ANON had some brilliant points and such a macro-view of the whole thing that makes sense.
I would like to add something to that brilliant post, which was started with mediaherectic's brilliant post.
As was said, the French Rev cannot happen again and ESPECIALLY not in SA. When apartheid ended the method of creating even playing field amongst the whites and blacks was to replace the figureheads and let equality trickle down. Certain practices like affirm action were implemented and the theory was that with the guys at the top being black, they would restructure things so that wealth and power would trickle down to the oppressed black Africans. Who were the big supporters of this? The Apartheid heroes!! They black guys at the top who were going to take power!! They discouraged an all out revolution and convinced the people that this way was the best.
What are we left with? Just a replacement of the big dogs at the very top of the food chain. They are untouchables. This is a class issue and not a race issue, but in order to save their own asses they will make it into a race issue. They will never get caught. They abuse their power and gain undeserved wealth that exceeds our imaginations.
I also think that they are selling off as much of their investments in property and construction at the moment, and thats why they don't want this property bubble stuff to break into the media.
Once again
Where is the
MAIL
and
GUARDIAN!!?!!?!
Not to put the M&G down,but if there is one truly independent investigative journalism publication in this country it's name is Noseweek. I buy it every month and so should you.
Mediaheretic? Awesome post! Ya, just go read through the latest Who Owns Whom (RIP Robin McGregor) and you can see just how incestuous big business, media and politics is in SAfrica.
You are so right. There's no big conspiracy or any real pressure on the media as it takes too much effort to conceal it. The simple reality is that if you work for a publication and your boss own a house in Suncet Links, then you're going to think twice about writing a story about rising sea levels and storm surges nuh?
Last Anon? Spot on. These lads and lasses are probably all scrambling to divest themselves of a substantial part of what is essentially very illiquid investments, while the going is still good. And in the nature of all scavengers, whoever gets a rebalanced portfolio first will start capitalizing on the profitability of fear (and at the same time reduce the competition).
Every day I am absolutely amazed at how ignorant SAfrica is of what's going down on a global scale. The most telling is how the 'free' press, the SABC and e-TV report business news. Nothing, but nothing of consequence relating to the real issues. Like e-TV business reporting... Intl Markets... Nasdaq... and that's it! As if the Nasdaq matters bwahahaha.
The really sad thing is that most people here feel themselves inured to the global issues as BC said. Well, the rude awakening is coming. Manufacturing down 11% is a staggering drop of depressive proportions and it's only starting.
Like I said in a previous post, it seems that people are taking wild hope from an expected cycle of rate drops coming? Are SAfricans truly so ignorant? What can possibly be good about interest rate drops in an economic meltdown? It is merely confirmation of how bad things are going to get when rate drops are forced on an economy. Sure bonds are cheaper, but the underlying fundamentals of these rate drops spells disaster for the economy since manufacturing and exports recede, and so does employment, and then who is going to buy those McMansions?
I don't think there is a single company in SA this year which is either going to pay bonuses or increases (those that do might as well close their doors today) and that makes the average Joe 13% poorer over the past 12 months alone.
You can bet your shorts that the Avusa's of this world are shaking with fear. If an astute and conservative genius like Buffet manages to lose one third of his wealth in one year, can you imagine what our local free-loading clowns have done to their own portfolios?
Yes, it's most definitely in their own interests for the average Joe to remain blissfully ignorant of the compounded effects of deflation and fear
Perhaps our economy is somewhat isolated from the global economy. Of course we are part of the global economy, but countries are reliant on it to varying degrees. The UK is heavy on global trading, the US is a consuming/credit nation, S Korea and China manufacture goods for the US and UK. These countries all have a very symbiotic relationship like vital organs in a body.
Maybe we are the appendix?
Look, I know that we are going to feel a big hit, but maybe not on such a grand scale or with the same force of these other countries?
In America everyone spends like no tomorrow. If you go to any town big or small you will feel like you are in a flipping car show. Large trucks and SUVs, muscle cars, luxury cars. When I go there I always wonder how in the hell EVERYONE can seem to afford these things. I swear, its difficult to find a car thats over ten years old. But, in SA we do keep better care of our posessions. We make things last. There are so many cars that are at least ten years old on the streets and every other car is a Toyota Tazz, and every other car other than that is a Chico! Cheap cars that are well kept. Maybe it is our spending frugality that might help us weather the storm?
It isnt just cars either! Americans eat like machines and they have the kg's to prove it. They eat rich, high cal foods that are expensive to boot. They live and breath off of credit. The US does not have as strong of a culture as we do, and their consumption is probably their strongest cultural value.
I am not in denial, I know the crunch is coming. We did make a mess of the property industry. But is it realistic that it will not be AS bad in SA? I think the prime interest rate in the US is like 6%...does that indicate that maybe we havent tapped our pockets dry just yet?
Sincerely,
Roberto
PS- www.seeff.com just remodeled their website and its pretty spiffy! Maybe better marketing will save the property industry!! Just joking.
Roberto,
I think it's going to hit here as hard as anywhere else. Scroll back a few days on this site and you'll see my post about how our bubble was by far the biggest in the world. The Economist has also just published an article stating (someone unfairly) that we are the most risky emerging economy in the world. Make no mistake: it's going to klap us very very hard.
I must also disagree about South Africans' spending habits. Yes, America is awash with big cars, big houses and big stomachs, but remember that there are 300 million of them, and perhaps 250 million of those are middle class. Our middle class probably numbers about 5 million. And yet despite having such a tiny middle class our roads are clogged with cars. Yes, there are Tazzes and Chicos; but there are also hundreds of thousands of Beemers and SUVs - far more than our national average income suggests there should be. Trust me, South Africans are just as addicted to credit and conspicuous consumption as Americans, perhaps even more so because we don't even had the Americans' tradition of shopping around and haggling for a bargain.
I think it's time we hope for the best and prepare for the worst.
Its reasons like this that we will always be a third world country. We have too much of controlling in areas that require free speech!
I always believed that the media were fools when it came to free speech and reporting on what is happening and affecting the
"every day mans" pocket!
SABC is government owned and extremely politically inclined. I hate it when we mix politics and media. Its dictatorial to say the least!
As long as we (individuals) see things for what they are, we will be fine. The rest can continue to be brain washed by those fools that think they run the country and everyone in it!
On a somewhat unrelated note, I think some of you may find this interesting:
http://jameshowardkunstler.typepad.com/clusterfuck_nation/2009/03/side-trip.html
For sure made me think again whether it makes sense to buy a property in SA...
Sorry, here is the link for the story.
Nice post mediaheretic - some excellent sleuthing.
I started posting here and at realestateweb a few years back when the property bubble was becoming blatantly obvious and yet no one in the mainstream media was talking about - there was just endless property hype from property people trying to feed the bubble to ever greater proportions.
There were warnings of the perfect storm heading our way from an enlightened few, but they were being totally ignored.
Part of the problem is that much of the advertising in the newspapers comes from property ads. They aren't going to tell the truth and upset all their estate agent clients.
CT Bubble has done an excellent job with this blog and it is great that it is generating such thoughtful debate nowadays.
The scary thing is, now that the anticipated financial meltdown has arrived, it is hard to see where it will all end. The property part is easy, I can't see it having much attraction for many years to come.
It is the rest that concerns me. Predicting the meltdown was fairly obvious - predicting how the world is going to emerge from it is a whole different ball game. It is all a bit unnerving if one ponders on it too long.
oi! CJ?
Henry Kissinger was asked what it will take to sort oi all out... not too long ago.
His answer?...
"Reduce the Global Population by 80%"
Makes you think doesn't it?
I'm heading for the platteland bru
A business journo friend once told me how censorship occurs in the business media:
1 - Most stories are given to you to write. Business uses media here as a marketing tool.
2 - When phoning your contacts and sources they will inform you of scoops and developments but often ask you that you do not write about them for fear of retribution from their superiors, even if they remain anonymous. If you ignore the request you lose the source.
3 - The editor decides what is an acceptable story, language and words via codes of ethics, responsible journalism, regulation and guidance etc etc
Media heretic makes sense but he must also admit that the property industry, in all its forms, is the biggest industry in the world by far.
Linking the directors of Avusa back to property is no science. If one was to look at directors of every big company, there would be a link back to property bar none.
Property is the best wealth creator of any asset. The fact that so many influential and rich people invest in property makes one wonder.
There is no media conspracy to hide the fact that the bubble has popped. Its quite obvious but in the long term, nothing but nothing beats property in terms of return of investment and wealth creation.
Anonymous above, I do not think that mediaheretic disputes that a lot of wealth creation comes through property. Actually it was the point, along with the protection of that wealth creation ability, of his/her post.
If you have done your research on media there is no other conclusion other than media is used to further the interests of groups allied to, or in control of the media. We can see this locally with the SABC.
Moving further afield we can take the case of Somalian pirates. It is not a well known fact, due to the MainstreamMedia, that the pirates were or are mostly fishermen. With the collapse of their government obviously there is no coast guard or protection of their territorial waters. Multinationals have for years been taking advantage by illegally overfishing in their territorial waters while other multinationals have been dumping toxic waste in the same waters, discovered after much washed up on the beaches after the tsunami. (please avoid questioning how one multinational can be fishing while the other is dumping toxic waste) The so called "pirates" have now with less fish to catch and many polluted beaches have taken to protecting their resources and obviously having found it lucrative other armed groups have come aboard so to speak.
The point is that everyone is scared into believing, through the MainstreamMedia, that our way of life is under threat. What has actually happened is that the Multinationals profits have once again come before the environment and the people and these are now under threat. Now that the people have reacted they are demonized and the MSM actively supports the multinationals by failing to tell the true story.
Anon, I'm not sure where you're getting your facts but I'm afraid property is nowhere near the world's largest industry.
According to the World Bank, tourism is the biggest industry. Others put food production just ahead of tourism, while most agree that the arms trade is in the top three or four. I doubt whether property is even in the top ten industries in the world.
You've also clearly bought the official line about property as a wealth generator. Do your homework and you'll discover that historically property is no better or worse than host of other assets. And for the next ten years it's going to be worse.
Your final assertion is nonsensical. If nothing beats property for personal wealth accumulation, why aren't the ten richest people in the world all property investors?
Well, after reading all your blogs, i can only say that i am retired, have 2 properties abroad that i let and i live very well with the rents i have been receiving for the last 15 years. I have no bond. People, nowadays who depend on their pension or shares, will have to work until they drop. So personally for me, properties was the best investment i made and i retired at 50 years old.
To last comment:
Firstly, the number of people who can buy two properties, and I am assuming live in a third, are few and far between. I imagine these properties are overseas, so you are making quite a bit with the exchange rate and what not.
And to have no bond! How logical!
Thats all fine and dandy, but you see, this blog is for S Africans, and most S Africans are not wealthy enough to carry out the plan that you seem to think was based on good planning, common sense, and hard work. I am betting your lifestyle is based rather on family money (or some kind of easy cash) and moving to a developing country. I am not sure about the easy money part, but your lifestyle is definitely partially a result of moving to a developing country.
The way you 'achieved' your lifestyle is not a viable course for 99.9% of us.
Plus, to retire when you are 50 is laughable. What kind of sorry lazy ass retires when they are 50? Perhaps you hated the line of work you were in? In any case, you should find another blog to comment on. One geared to lazy assed rich kids who became lawyers and hated it but did it because they didnt have a soul or a family, and so they could retire when they are 50.
Could you imagine what kind of world we would live in if everyone was like you? It would really suck.
You are a twat.
Yes, a real twat!
Smugness doesn't suit anyone
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