Alarm raised over South Africa's disappointing GDP figures

[Sneeky]

Congress of South African trade unions (Cosatu) General-Secretary, Zwelinzima Vavi says: “We’re sitting with a situation where almost weekly we are negotiating retrenchments - we're not talking about five to 10 people we're talking about thousands and thousands. We’re up to here running from factory to factory trying to save jobs, government must help us."

I was listening daily to many radio shows with callers, experts and government officials implying that because of our sound banking and financial system we have been largely insulated and unaffected by the global meltdown.
The same people were pointing fingers at the west.
Funnily enough we seem to be tracking the downturn in China for the last year or so, eggs one basket?

Anyway, either way, we are getting hammered locally and this is only the start.
http://www.sabcnews.com/portal/site...d4ea9bRCRD&vgnextfmt=default&channelPath=home

 

[Albereth]

So drop the interest rate already - even if it doesn't kick start the economy it'll bring relief.

 

[Sneeky]

a bridge to far!

 

[Moederloos]

I was listening daily to many radio shows with callers, experts and government officials implying that because of our sound banking and financial system we have been largely insulated and unaffected by the global meltdown.

Not really quite the same thing. We ARE insulated from the root causes of the global financial crisis - in that our banks are not involved in dodgy, underhanded, lending practices. That much is true. (And let it be said that our banks would happily *have* been involved, had the NCA not been passed....)

We are not however immune from the secondary affects of the collapse - which is the slowdown and collapse of the economies in the West.

 

[killadoob]

No moeder we are not involved in the melt down because our banks charge so much to lend, they are financially sound because funnily they rip us off badly so they are protected in a way due to all the money they make.

Drop the interest rate by 2% already dammit!!!

 

[sox63]

Not really quite the same thing. We ARE insulated from the root causes of the global financial crisis - in that our banks are not involved in dodgy, underhanded, lending practices. That much is true. (And let it be said that our banks would happily *have* been involved, had the NCA not been passed....)

We are not however immune from the secondary affects of the collapse - which is the slowdown and collapse of the economies in the West.

Well put.

And even though the collective GDP contracted by that percentage, it was good to see the Construction gain about 10% in the quater. So there are some sectors making money out there.

 

[boramk]

SA is in recession, there are reports of the next two quarters also seeing contractions

 

[sox63]

SA is in recession, there are reports of the next two quarters also seeing contractions

How many consecutive quaters for it to be official?

 

[werner]

not to sound like a broken watch, but it is pretty common knowledge that the Uk is now in the grips of one of the worst financial crises ever..hey, we all know that already.

so, rewind one year to this
http://mybroadband.co.za/vb/showthread.php?t=113104
and then come back and read this thread

and then try have a nice day if you can, because i *unfortunately* think we are all going to miss having nice days for a few years. go to the park, play frisbee, take the dog for a walk. it is worth it.

 

[BBSA]

Not really quite the same thing. We ARE insulated from the root causes of the global financial crisis - in that our banks are not involved in dodgy, underhanded, lending practices. That much is true. (And let it be said that our banks would happily *have* been involved, had the NCA not been passed....)

Was our banks involved in dodgy lending practices before the NCA was passed in 2006?

 

[Moederloos]

Was our banks involved in dodgy lending practices before the NCA was passed in 2006?

Yeah - which is why we got the NCA.

Remember that ABSA branch/division who collapsed a few years ago after it was found they were giving microloans to anyone who asked? I forget their name now, but will remember it later.

The Debt Councellor Programme is seeing a major upturn in applications - and many of those are being granted, as the consumer is "over indebted". Again, from pre-NCA rushes by the banks to hand out credit cards to everyone.

So, yes - the banks would have, and did, act irrationally when granting credit.


EDIT: UniFer
http://www.fmd.co.za/fmd/data/M00042/M00042.ASP

 

[TooFastTim]

Not really quite the same thing. We ARE insulated from the root causes of the global financial crisis - in that our banks are not involved in dodgy, underhanded, lending practices.

In 1994 wife & I needed a new house in the 'burbs (she was heavily pregnant and Woodstock wasn't really the place to raise a kid). We worked out we could afford R160,000. We approached the banks for a pre-approved loan and were told we could spend up to R360,000! More than double what we KNEW we could afford. We ended up buying for R165,000 and sold for over a million.

Look at those black diamonds driving new BMW 325's. How much do they earn? What are the repayments on those cars? R5,000 pm? I know of a "black diamond" couple who were earning (combined) a total of just over R10,000 pm. But they bought a new BMW 325. I certainly couldn't afford one.

How many people do you know who had a standard of living that simply didn't make sense? Many I'll guess.

Now, are you still sure about the SA banks?

 

[brixton tower]

Look at those black diamonds driving new BMW 325's. How much do they earn? What are the repayments on those cars? R5,000 pm? I know of a "black diamond" couple who were earning (combined) a total of just over R10,000 pm. But they bought a new BMW 325. I certainly couldn't afford one.

How many people do you know who had a standard of living that simply didn't make sense? Many I'll guess.

Now, are you still sure about the SA banks?

That only happens when people are cutting back in other areas. I know a lot of people who prefer to live in the townships because they'll be able to drive fancy cars...even though the stress levels in the township are crazy.

 

[TooFastTim]

In the case I mentioned that was exactly what they were doing. But, think about it, there are many "black diamonds" who live in a nice, faux, Tuscan villa (if such a thing exists), drive a new BM and a new Passat (for example) and both work for the dept of home affairs (again, for example).

How many credit cards have you been offered? Woolies card, Edgars card? The access to credit in SA (as with the rest of the world) had no bearing on the ability to repay that capital.

I'm afraid SA isn't so isolated. In fact it's much worse in SA than it is in many oher, first world, countries because of the newly upwardly mobile demanding (that word again) the instant gratification the govt promised.

*edit* this isn't a rant against black diamonds, I knew many people whose lifestyle was way out of whack with their skills.

 

[brixton tower]

In the case I mentioned that was exactly what they were doing. But, think about it, there are many "black diamonds" who live in a nice, faux, Tuscan villa (if such a thing exists), drive a new BM and a new Passat (for example) and both work for the dept of home affairs (again, for example).

How many credit cards have you been offered? Woolies card, Edgars card? The access to credit in SA (as with the rest of the world) had no bearing on the ability to repay that capital.

I'm afraid SA isn't so isolated. In fact it's much worse in SA than it is in many oher, first world, countries because of the newly upwardly mobile demanding (that word again) the instant gratification the govt promised.

*edit* this isn't a rant against black diamonds, I knew many people whose lifestyle was way out of whack with their skills.

When Nedbank, Standard Bank started calling me with offers of credit cards I knew there was something rotten in the state of Denmark. I don't bank with either of those banks and here they were offering me a credit card and I could've easily taken them up on their offers but that's where self-discipline comes in...There was a temptation to take these offers but I just said fukkit coz I know like banks tempting you with credit is like the drug dealer offering you the first couple of hits for free- it all works on the comeback. Thankfully for the NCA not too many people got swallowed by the beast that was easy credit.

I don't think the credit situation is worse in SA, basically if you can't swim you either go to a debt counselor, get your financial house in order, or you take a serious cut back on some of your expenses(like cars and superfluous sh&t like DStv) or you suffer the consequences.

 

[TooFastTim]

I don't think the credit situation is worse in SA

I wouldn't say the situation is worse I'd say that SA isn't as isolated from the problems as many think. Certainly the NCA helped in this regard, but the downside is that SA's growth was derived, to some extent, from access to credit.

What will excerbate SA's situation is the diminishing manufacturing and agricultural sectors and the rate of contraction in these areas is alarming.

 

[LeetStone]

How many people do you know who had a standard of living that simply didn't make sense? Many I'll guess

Plenty, but those I have met, I know for a fact they are tax dodgers and hiding their money in tax shelters.

 

[boramk]

How many consecutive quaters for it to be official?

A recession is 2 quarters of negative growth.

 

[zippy]

Not really quite the same thing. We ARE insulated from the root causes of the global financial crisis - in that our banks are not involved in dodgy, underhanded, lending practices. That much is true. (And let it be said that our banks would happily *have* been involved, had the NCA not been passed....)

We are not however immune from the secondary affects of the collapse - which is the slowdown and collapse of the economies in the West.

Yes. The "Buy American" and "Buy British" etc., campaigns are what you should be worried about. You will find SA banks will start having problems when their bond holders start defaulting because they lost their job because their employer's exports have evaporated.

 

[brixton tower]

Certainly the NCA helped in this regard, but the downside is that SA's growth was derived, to some extent, from access to credit.

What will excerbate SA's situation is the diminishing manufacturing and agricultural sectors and the rate of contraction in these areas is alarming.

As long as we weren't exposed to foreign banks like the Icelanders were I'd say we're safe. I'm not sure about contraction in the agricultural/manufacturing sector but one sector that's definitely taken a beating is the mining sector for which a sizable chunk of our growth the past five years can be attributed with the crazy mineral prices.