Forget about the petrol price...

[fandacious]

what he said

[Jackes]

Linnega, what's the chance the your payslip starts off with " Dept of finance"

and ends with

" yours sincerely, Trevor " 

[RaceChick]

My father is in the steel business and by the end of July their steel prices will have increased by 64% for the year.

[fandacious]

I believe that a large portion of the steel price increase is attributed to MASSIVE demand for structural steel for the new stadiums they're building. There's also a huge aluminium smelter being built @ Koega which needs a few pieces of steel to hold it up

[linnega]

Linnega' date=' what's the chance the your payslip starts off with " Dept of finance"

and ends with

" yours sincerely, Trevor " 

[/quote']

Eisch, no, comrade.  Although I do have a brother-in-law in provincial government.

 

I just happen to have share options that are highly dependent on the state of the economy.  Share options aren't worth much when the share price halves in 12 months after growing 400% over the preceding 24 months.

[Jackes]

everything is hitting us hard,  fuel, food, interest, eishkom, property taxes valuations, should i continue ?   But every cloud has a silver lining

[linnega]

I believe that a large portion of the steel price increase is attributed to MASSIVE demand for structural steel for the new stadiums they're building. There's also a huge aluminium smelter being built @ Koega which needs a few pieces of steel to hold it up

Are you sure that anything is going to get built at Coega?  Been hearing that story since 1995.

 

I imagine that at least some of the steel (and cement) price increase are related to the stadia being built.  They are busy sticking up big blocks at the moment in Durban of a curvy thing that goes over the entire stadium.  I am assuming that is re-inforced by a lot of steel.

[greatwhite]

Quote from Max's column:

"I've never understood the logic of making people pay more for the same things in order to combat inflation. Surely inflation would go down if people spent less and saved more? "

 

The idea, as I understand it, is to lift the rate high enough to discourage people from borrowing - if the rate was lifted quickly early on less folks would have borrowed and there would be less rate increases later. If anything, now its too little too late. Modern economics debates this though - leading to another Quote:

"Flies in the face of analysis

Well, it seems I'm in good company. Professor Joubert Botha, former professor of economics at Wits and past president of the Economics Society of South Africa, declared in an open letter to the Reserve Bank this week that the belief that there was a direct relationship between prices and the interest rate "flies in the face of two centuries of economic analysis by the founding fathers of monetary economics".

Botha believes external factors are too strong for the Reserve Bank to reduce price levels. But if anything is to be done, it would be through controlling the credit banks can give."

 

Which is partly what the NCA is supposed to acheive. i.e. reduce borrowing

 

 

What isn't mentioned in this article is outside driving forces which are outside Titos control:

1. The one most people know - The fuel price (although, I agree, the tax can be reduced because they are over recovering hugely on that at the moment)

2. Raw materials cost. e.g. Steel in the spread that I use has gone up 73% since february and I've just had a notification there is another 5%+ increase due for July so over 6 months, that will be 82% (yes 5% on 73% IS 82% before you question the maths).

etc etc

 

Investor confidence isn't high either with the likes of Eskom screwing up royally, the crime and gereral lack of service delivery by many government department. So foreign investent isn't as high as some might expect with high interest rates

 

With factors like above how can anyone really expect there not to be huge inflation

 

In a nut shell, like just about everyone, I don't like the rate increases, but I don't think we should be blaming Tito - he's the poor bastard that has to make a crappy decision and pick up the pieces from problems caused by others. (If anything, he and Trevor are two of the top performers in our otherwise underperforming government)

[Bateleur1]

I tend to think that a great part of the building sector at the moment is focussed on 2010 projects and other goverment projects.  If you drive around Gauteng, the huge building projects are all related to 2010 and Gautrain which I have to say is HUGE.

[Groot Lem]

On your primary residence you pay CGT  after R1,5m profit(if its in your own name) , but only 25% of that gets added to your annual income. So someone thats on the max tax rate of 40% will pay (only for the part more than the R1,5m profit) 40% of 25%, thats 10% says my grade 8 boy.

For non residence the same formula applies just from R1 profit, unless you held the property in another legal entity, then its more. Bla, bla, bla.

But the residential property market is in for a moerse shock. I had an auction of properties mostly in the Strand areas, not one house got enough interest for a sale. The estate agents and sellers were moerse shocked. Since yesterday I had calls from strangers that saw my ads to auction 13 properties. But are they willing to go low enough, not sure, we need another rate hike. Then hopefully I'll cook. People just want the money back they paid 2 years ago. But what will the banks say if we get less than the outstanding debt? But I did appoint a lady cyclist with good looks to council the poor sellers.(ex Olympian and married)

[fandacious]

yes, the banks will let the house go for less than what is outstanding if they feel they've made enough on interest...

friend of a friend just 2.5mil place for 600k, and owner owed the bank 900k...

 

lem... pm me your details... ek stel belang in auctions..

[Groot Lem]

Why PM , I'm not a woman. Let me advertise. www.newbridge.co.za

hendrik@newbridge.co.za

[Poison Ivy]

But I did appoint a lady cyclist with good looks to council the poor sellers.(ex Olympian and married)

 

that sounds like your training partner ........ very clever

[linnega]

I believe that a large portion of the steel price increase is attributed to MASSIVE demand for structural steel for the new stadiums they're building. There's also a huge aluminium smelter being built @ Koega which needs a few pieces of steel to hold it up

Are you sure that anything is going to get built at Coega?  Been hearing that story since 1995.

 

 

Just went to check our share price and saw this:

http://www.fin24.com/articles/default/display_article.aspx?ArticleId=_2333482

 

So much for Coega.

[fandacious]

 

Just went to check our share price and saw this:

http://www.fin24.com/articles/default/display_article.aspx?ArticleId=_2333482

 

So much for Coega.

 

Should lighten up the steel crisis then

[MintSauce]

 

So Minty' date=' if you compare over 5 years, the average growth has probably been excellent, but over the past year poor because you are comparing to an unreasonably high base.  It certainly doesn't mean the building industry is in any crisis.

[/quote']

 

My point had nothing to do with my companies growth now vs the last 5 years. I was just trying to point out that ito quantities moved, we have definitely slowed down and this would indicate that there is less activity in the industry.

 

That and the fact that the guys who are supplying the hardware stores that supply the builders that build houses, are complaining that business is very slow.

 

 

 

 

If the prices of

steel continue to rise though beyond 2010' date=' then we will see some large

scale bankruptcy in the building industry.

[/quote']

 

 

Personally, I don't see the prices of steel necessarily crippling the building industry. It's mainly because property owners will stop building and extending, in the same way that they aren't buying at the moment.

 

Same thing happened in the mid to late 90s when the rates hit 25% and hordes of small builders folded.

 

 

 

Of course, the upper elite will continue to make money when the middle- and lower income groups are suffering. A good friend builds in the upper segment of the market, building multi-million rand mansions and he is fully booked for 3 years