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Business confidence has crashed quicker than it has in the last 18 years according to figures released yesterday.
The Business Confidence Index (BCI) is sitting at 84.2 having lost 5.7 points. According to Business Day the BCI peaked at 103.5 in December 2006. Business Report said the drop in the figures released by the SA Chamber of Commerce and Industry (SACCI) were caused by concerns around the global financial meltdown.
The Dispatch quoted SACCI economist Richard Downing who felt that confidence could be returned by proper regulation and supervision of lending practises. This slump in business confidence is not limited to South Africa. The global fallout is in fact the main cause. This fallout will have an effect on our markets reported iAfrica. The Monetary Policy Review Committee stated that there would be an effect and that they were going to concentrate on inflation targeting, particularly in light of the expected electricity price rises next week.
While our banks are safe, click here to compare banks, there are heightened levels of uncertainty at the moment. The Huffington Post comes in with an article that cautions listening to pundits too much as they are frequently wrong. The solution was to know how to play the investment game yourself, and finished with a great quote from J.K. Galbraith the economist: "We have two classes of forecasters: Those who don't know - and those who don't know they don't know".
The Economist carried a story on how American retailers were coping with plummeting demand. Without credit extension doing business often becomes harder. Credit cards can be got by clicking here.
Another major story doing the rounds this morning is the effect that the recent US elections will have. The Times reported that the election euphoria effect was fast fading. The whole world may love Barack Obama but the cold hard economic reality is that the world economy is deep in it. Very very deep in it.
So while you can wait it out with a savings account or investment portfolio there are big falls still to be seen. Business Report however reckoned that by the time Obama is on his way to the white house, the markets may well have turned into a bull run. Obama may be able to ride the turning of the tide and then take credit for it. iAfrica were of the opposite opinion, figuring the Obama would enter the white house with the economy still tattered, which will leave him constrained in his policy implementation.
The Huffington Post carried an opinion that Obama has a mandate to intervene in the economy, for example by renegotiating mortgages and clamping down on irresponsible lending. We already have programmes like that in place here in SA. Click here for the Justmoney guide to the National Credit Act, click here to consolidate your debt into your home loan.
On a final note it has been announced that internet star Nhlanhla Nene has been redeployed as Trevor Manuel's deputy. Both the Business Report and Business Day welcomed this appointment with Nene noted as having a steady hand and willingness to listen to all views. But just in case your chair falls out from under you, click here to get medical aid quotes.