South African Airways….part II July 25, 2007
Posted by simonminitzer in Airlines.2 comments
I only think it is fair to give what transpired following my irratations with South African Airways….As a gesture of goodwill, SAA gave me some free “upgrades” to a higher flying class on 2 international flights. They told me that they wanted to show me what a great airline they are…. fine. Yesterday, I make a call through to the airline, and pose the following question to them.. “I would like to book a ticket and take advantage of this offer you have given me, and give you the opportunity to show me what a great airline you are” – the response comes back “Well Sir, you need to phone in 2 days prior to the flight, and subject to availability, we will upgrade you”…. so I think to myself…. this gesture is not
hing more than an opportunity to sell more seats on the plane….I don’t want to fly with airline, and they not really doing anything to make me feel that they are trying to compensate me for my loss incurred on their plane…. they telling me to stand in line! I told the sales lady that I had no intentions of flying with the airline, and wanted to take the airline up on their gesture, but only if I could actually use the upgrade, otherwise I would be stuck with an economy class ticket I didn’t really want in the first place…. well…. I got the usual “well sir, the rules of the airline state….blah blah blah”….. I told the sales lady that I wasn’t interested in the airline hiding behind their own rules, and for their lack of forsight, they have lost a customer….. I have chosen Virgin Atlantic as my choice airline….. they think out the box….!
Whats with that Dollar? June 21, 2007
Posted by simonminitzer in Business, Dollar, Euro, Financial Markets.add a comment
Thought it would be interesting to look at the history of the US Dollar, it seems to derive plenty of interest from many corners of the globe. One should look at the coverage of the US Dollar – I always laugh to myself on any travel into a country where the language is not your mother tongue, and secondly where the options for communicating is limited to hand movements and facial expressions, in this instance, what usually transpires is that you pull out a calculator and start punching in figures, when all else fails, you pull out a dollar bill – this is unquestionably the most universally excepted means of transacting – forget Visa or Mastercard, the dollar bill, the good old buck or greenback is what endorses most transactions. According to wikipedia, in 1995, over US $380 billion were in circulation, two-thirds of which was outside the United States. By 2005, that figure had doubled to nearly $760 billion, with an estimated half to two-thirds being held overseas, representing an annual growth rate of about 7.6%. Further, it is interesting to note that However, as of December 2006, the dollar was surpassed by the Euro in terms of combined value of cash in circulation. The value of euro notes in circulation had risen to more than €610 billion, equivalent to US$802 billion at the exchange rates at the time. So what has happened? The Euro has started to impress its way as a rubber stamp on international transactions? The demand for it is increasing as the demand for dollars slows? The indications would certainly elude to that. Further,
At the present time, the U.S. dollar remains the world’s foremost reserve currency, primarily held in $100 denominations. The majority of U.S. notes are actually held outside the United States, known as eurodollars (not to be confused with the euro) regardless of the location. Economist Paul Samuelson and others maintain that the overseas demand for dollars allows the United States to maintain persistent trade deficits without causing the value of the currency to depreciate and the flow of trade to readjust. Milton Friedman at his death believed this to be the case but, more recently, Paul Samuelson has said he now believes that at some stage in the future these pressures will precipitate a run on the U.S. dollar with serious global financial consequences.
Not long after the introduction of the euro as a cash currency in 2002, the dollar began to depreciate steadily in value. After the euro started to rise in value in March 2002, the U.S. trade and budget deficits continued to increase. By Christmas 2004 the dollar had fallen to new lows against all major currencies, especially the euro. The euro rose above $1.36/€ (under 0.74 €/$) for the first time in late December 2004, in sharp contrast to its lows in early 2003 ($0.87/€). In late May and early June, the U.S. dollar, with the advantage of Federal Reserve’s policy of raising rates, rose significantly against all major currencies. The U.S. dollar broke almost all expectations in 2005 (some analysts previewed the dollar dropping as far as $1.60 per euro), finished the year with a significant double-digit recovery against the euro and Japanese Yen. However in 2006, the dollar again showed a double digit (11%) loss against the euro.
So what we can see is that the dollar is being used less as a currency of reserve, and the euro is taking on more significance…where will it all go?
What next for Financial Markets and the Dollar? June 12, 2007
Posted by simonminitzer in Business, Dollar, Equity Markets, Financial Markets, Interest Rates, Investment, Private Equity, Property, Real Estate, UK Real Estate.add a comment
We are entering a period of uncertainty, but what is it really about? Financial markets seem to be quite rocky, there is talk of interest rate hikes across the UK and most of Europe, even China is focusing in on their domestic markets to control levels of inflation. The question we need to ask is whether “shock” treatment is what the UK economy needs to check inflation – will it work? Does the UK government need to control fiscal spending so as to control inflation and consumer spending? Will the property market slow or even worse crash?
The fundamentals coming out of the United States appears to be positive – and there are signs that the US economy is rebounding positively. My view is still that this is the perfect time to buy dollar assets. The dollar at its current level is very attractive and in the short term, we will see increasing interest rates in the UK, which will further depreciate the dollar in the short term, but my view is that this will be temporary and the dollar will appreciate. The same could be said for sterling against the Euro, where it is felt that the Euribor will increase at a faster rate to the Libor.
Interesting times, and as for the property market, I still believe that there is too much demand for UK housing and too low a level of supply to warrant a crash, so the market should still provide comfortable levels of growth in 2007! There may be dips in the buy-to-let market, with decreasing margins due to interest rate hikes causing cash flows to fall and creating pressure, but overall, I think we ok!
tip: buy dollars! thats my 10p’s worth!
Interest Rates on the MOVE! May 10, 2007
Posted by simonminitzer in Business, Property, Real Estate, UK Real Estate.add a comment
The UK base rate was increased by .25 basis points to 5.5%, resulting in the 4th rise in the base rate since August last year. This rise has pushed the base rate up to its highest level in 6 years. The Bank of England have cited the targeted inflation rate as the reason for the increase. So where does this leave us? Well, your disposable income just fell! This means that you will have less money to spend on consumables, hence theoretically resulting in keeping the inflation in check. Laymans terms, you have less money.
It is unclear at this stage what effect the increase will have on the housing market. The housing market seems to be resillient. At some point i guess there needs to be a cool off, the change in the interest rate cycle is the first sign – everything works in cycles, the property market is no different. It may take some time before we see anything.
What next for the Dollar? April 19, 2007
Posted by simonminitzer in Business, Dollar, Investment, Private Equity, Real Estate.2 comments
So whats up with the Dollar? or rather, whats with the depreciation of the dollar? I am certainly no economist guru, but I can see one thing – the depreciation of the Dollar will no doubt make the US more competitive, as exports become more competitive and US assets start to look cheap. There will no doubt be an asset binge from the “richer” currencies into the Dollar to mop up some cheap assets. On a basic level you will see Britons heading over to the states to do some shopping, and less Americans heading over to Europe as things start to look a bit more expensive. An American friend of mine bought a few banana’s and a drink or two from M&S and was horrified that it cost her $8! The UK aint cheap, but its now more expensive for Americans – I think it could be time to mop up some Dollar assets. Everything works in cycles…..
Interest rates remained unchanged! April 5, 2007
Posted by simonminitzer in Business, Investment, UK Real Estate.add a comment
The good news is that interest rates remained flat at 5.25%, reported by the Bank of England today! More pounds in your pocket!
Have a good easter break!
Get down to the Cape Town Book Fair! April 5, 2007
Posted by simonminitzer in Books, Cape Town, South Africa.1 comment so far
The Cape Town Book Fair is from 16-19 June 2007. You should definately make a trip to the book fair, as it is said to be bigger and better this year. I have heard that the Kids Zone is going to be phenominal, and I also understand that there will be some extra exciting events this year, so go on down. Books are the secret to imagination. Check out the link and get down to the book fair, put it in your diary!
Zimbabwean Refugees pour into South Africa… April 4, 2007
Posted by simonminitzer in South Africa.add a comment
Zimbabwean refugees are pouring into South Africa, and more interestingly into Cape Town. Over 2,750 Zimbabweans have poured into Cape Town alone this year according to the article, reported by IOL. The refugees are choosing Cape Town over Johannesburg due to the perception of safer eniviroment, with less crime and the possibility of work. Who knows how many illegal refugees there are, but the crisis in Zimbabwe is having a massive impact on South Africa. With unemployment at around the 40% mark, can South Africa afford this? What will it do to the socio-economics of a country battling to enrich the previously disadvantaged.
Its not an easy one, I am not sure that anyone is happy about what is going on in Mugabe land – why has the world turned a seemingly blind eye to the plight of the people of Zimbabwe? What was it that brought on politcal sanctions in South Africa all those years ago? The rubicon was crossed a long time ago by Mugabe! The agendas of the G7 so full, that they have no time for a small country with no real economic impact on the world stage, whereas Iraq has all the oil…. come now Mbeki, do something about it… or is too late?
South African Govt won’t support SAA indefinately! April 4, 2007
Posted by simonminitzer in Airlines, Business, South Africa.add a comment
Somehow this report by Reuters does not surprise me, note my previous posting a few days ago. I won’t associate all these losses with what appears to be to me a lack of interest in the quality of how they operate, but higher fuel costs and increased competition. Each time I flew with SAA in the last year or so, the planes were full, so there must be a high level of innefficiency within the organisation.
It just goes to show you, sometimes the finer details we as consumers note, are certainly contributing to the overall state of the company. Innovation is key in business, and I am not sure SAA are doing anything different to anyone else?
Its time you started listening to your customers! I still invite some sort of response from the airline (my complaint is in investigation!)…
Whatz UP with the UK Property Market….? April 3, 2007
Posted by simonminitzer in Investment, Property, Real Estate, UK Real Estate.add a comment
One of the biggest questions hanging around (I would be so bold as to say globally) is what is going to happen with the UK property market – much is at stake for the stability of so many people, and this baffling question resonates on the minds of many, local to the UK and those with vested interest on the foreign stage. In an article titled ” Why property bubble hasn’t gone pop yet” I thought it was explained pretty well, and supports an arguement I have been documenting, that the property market in the UK is underpinned by a massive level of demand, which is difficult to erradicate – people always need a roof over their heads, and the top end of the market is being propelled by foreign money who want a piece of the action, not only as an investment, but to live in. So ultimately, there needs to be some levelling off, I am not sure we should expect a “crash”….
