Mongolian mining mania

Mongolia, landlocked between giants China and Russia, has a population of less than 3m. The city of Cape Town, at the  southern tip of Africa, has a population exceeding 3m. Mongolia is the size of western Europe and is gradually emerging from obscurity as more and more people become aware of its substantial mineral resources. A huge copper/gold project is under way at Oyu Tolgoi, while Tavan Tolgoi, the world's largest untapped coal deposit is also moving towards production. Rio Tinto, one of the world's mega-miners, is wrangling with the Mongolian government over royalties at Oyu Tolgoi but the project is so vital for both parties that some solution will be found. Tavan Tolgoi has an estimated coal resource of 6.4bn tonnes, enough to keep a quite a few fires burning! Newly-elected Japanese prime minister, Shinzo Abe, he of Abenomics fame, is set to visit Mongolia, proclaiming it for its 'shared democratic values'. Abe is cosying up to several Asian economies as part of a plan to neutralise some of China's growing muscle in the region. The Tavan Tolgoi development will also need a lot of heavy equipment of the kind that Japanese companies are good at. 800 years ago Genghis Khan founded the Mongol empire and grandson Kublai conquered China. Kublai's summer palace was in Xanadu, now known as Beijing. That's not going to happen again anytime soon but the country is starting to become a player after years in the wilderness. The QSL is from Radio Ulan Bator, English Section, heard in Cape Town in 1968. Typed on an old typewriter, the upper case characters popped up half a line and the lines nearly ran off the page.

Argus-watching in the Deep South

This year's Argus cycle tour in Cape Town was another roaring success with 35000 riders from around the world on the 109 km course. The winner clocked 160 minutes, giving an average speed of over 40km/hour. This is the world's largest individually-timed cycle race and, as with all such large occasions, offers a delightful mix of deadly-serious professionals and out-for-a-fun-day amateurs. One fellow hared past on an elliptical stairmaster on wheels. A group of tandems tore through with an ominous whoosh. Here in the Deep South, Simon's Town is the perfect vantage point for observers, as the road slopes gently into the village and riders take a bit of a breather or even stop at the large watering point on Jubilee Square. A lone bagpiper on the balcony of the British Hotel serenaded the pedallers through. Once the last of the stragglers had gone I jumped on my mountain bike and followed in the wake of the tour. Just beyond Miller's Point I stumbled across another large watering station, feverishly packing up after a long day and festooned with Coke flags flapping frantically in the breeze. It was a reminder of the huge logistical effort underpinning the event. This was the first cycling event outside Europe to be included in Switzerland's International Cycling Union's Golden Bike Series. The QSL is from Swiss Radio in Beromunster heard on AM in Kent in 2000.

Russian out of Cyprus

We’ve had a couple of holidays in Cyprus, in mid-summer when it is stiflingly hot. We stayed in a villa in the hills above Paphos. The routine was: get up late, have brunch, laze around while the sun was high, then head to the beach in late afternoon for relief. The first time we visited, in 1999, I was struck by the amount of Russian spoken on the beach and in town. With hindsight this was probably the vanguard of a surge in Russian connections with the island. This year it is estimated that over $30bn of deposits in Cyprus banks is from Russian sources. Russian depositors surely weren’t the only ones: there are thousands of UK expats on the island with money in local banks. The similarities with Iceland are quite striking: Icelandic banks were offering these great interest rates to foreigners to the extent that its bank assets grew to 12x GDP. We had many friends in the UK who were only too happy to put their cash with Icelandic banks, only to squeal like crazy when the banks were nationalised. Cyprus was doing the same thing and although the bank asset-GDP ratio only reached 7x, this is still pretty ballistic. Caveat emptor! South African bank assets are less than 1x GDP, for example. Bank failures have been around for a long time: the collapses in the US and England in the early 1800s are well documented. In short, we need banks but they will constantly come back to bite us – that’s leverage and no amount of regulation is likely to change it. The QSL is from the Cyprus Telecommunications Authority, a radio-telephone utility service in Nicosia, heard on 8mHz in London in 1995, using 3 kW.

Please Sixto Rodriguez, avoid the Great American Songbook

Sixto Rodriguez loves SA and SA loves him. We went to his latest show and knew we were being just a little bit had. But we didn't care. Here is a guy whose music is iconic for a generation of South Africans and even some of their kids. In the 70s just about everyone I knew had a vinyl copy of Cold Fact, his best album. You heard it at parties, on lazy Sunday afternoons, wherever. In the Oscar-winning documentary, Searching for Sugar Man, which had many grown men crying, much was made of the 'anti-apartheid anthems' in his discography. This is poppycock. We just liked the music - his plangent voice, punchy lyrics, simple arrangements, catchy tunes. And in his concerts he still mostly pumps out those same songs. Unfortunately, his backing group was totally over the top. For starters, no less than two drummers with full kit and separate congas. Then a rhythm guitar with six and twelve strings, Rodriguez himself on rhythm and finally lead and bass guitars. It was hilarious at times. There were moments when the backing band lost the plot. For one song, a cover of 'Fever', Rodriguez strummed a few bars while the band stood nonplussed before the base player suddenly twigged, shouted it out and then they quickly chimed in. There were also a couple of songs out of the Great American Songbook, the kind of stuff that Rod Stewart and Robbie Williams have puked out when past their prime. Rodriguez did a version of 'I Only Have Eyes for You' which was written in 1934. It made me cringe, out of tune and out of character, appalling. Someone shouted from the crowd, "I love you, Rodriguez" and he shouted back, "I know it's the drinks but keep talkin' baby!" This is a stock line he delivers over and over round the world and it still gets a laugh. Anyway, this wiry construction worker deserves his place in our hearts. He's an American from Detroit but his parents came from Mexico. The QSL is from Radio XEG in Monterrey, Mexico, heard booming in one morning in 1991 in Morgan Bay, South Africa on AM 1050, a distance of more than 10000 miles.

Central banks light the fuse

Central banks are in overdrive, red blood corpuscles pumping. QE 'over-the-horizon' is the play. There are variations in style but the game is essentially the same: ensure abundant liquidity at the core of the financial system. Numerous targets are deployed but the ultimate objective is to re-stimulate spending. I created an indicator based on excess manufacturing and labour capacity in the US. Even if some capacity is left permanently obsolete, there appears to be plenty of space to accommodate a big pickup in demand. So far the indicator has retraced from record lows only to the point where previous recessions ended. Some economists are calling for a nominal GDP target i.e. a combination of inflation plus real growth. Don't worry about inflation, they say, it's a long way off. For now I share this view. What I see is the winding up of a new global cycle, ultimately likely to end in tears, but which for the moment is actually accompanied by a high degree of scepticism. The wall of worry remains - this is usually good for risk assets. We are some way from buy-in and even further away from euphoria. But the almost unlimited licence now claimed by central banks is setting the charge for the next bubble. Recently we've seen a spate of articles claiming that irresponsible bankers and the private sector should not have sole right to driving the new cycle. Rather, the public sector is equally if not more entitled, especially when it comes to creating new capacity, sorely needed around the world. And why shouldn't central banks buy the paper government issues to fund this? This theme looks set to run and run. Japan's central bank funding of state spending in the 1930s has already risen like a phoenix and the arrival of Mark Carney from Canada at the Bank of England looks set to take the idea another step further. Carney was born in Canada's Northwest Territories. The QSL is from Cambridge Bay Aeradio in NWT, Canada. This remote station, using 5 kW, was heard in Johannesburg in 1991 in contact with transcontinental aircraft.

To what or not to what?

Unobtrusively, ineluctably and relentlessly a certain horrifying usage of English has crept up on us, here in South Africa but also in the UK. I'm not sure where it first gained coinage but it was always lurking in the shadows. For decades it had made sporadic appearances only thankfully to recede back within its confines. But now it is unleashed - instead of the exception it's becoming the rule. I'm referring to the howler: 'than what', as in 'this is much worse than what I thought it was'. You come across it in multiple guises: another example: 'analysts were surprised by the company's earnings guidance which was much higher than what management had indicated last month'. Whenever I hear that intrusive 'what' I scream silently, no please, not another one. Every time another 'what' is uttered, universal usage is tipped another notch in its favour. Soon it will be deemed wrong not to 'what'. Language police will pounce on offenders. Non-whatters will be ridiculed for their ignorance. 'Than what' is in the same category as 'as well' where the accent is on the 'as', not the 'well'. Only, 'than what' is far more widespread and gathering steam. In fact it appears to have taken over. Another travesty that appears to be gaining momentum is the use of 'desert' instead of 'dessert' in restaurants. Suddenly it's all over the place. Or maybe, its all over the place? It's not that I'm advocating a reversion to Fowler's A Dictionary of Modern English Usage (published 1926) or anything but really, you just don't need the 'what', it's superflouous. The QSL is from BBC Radio Kent, heard in London in 1996. Note the lovely oast house logo on the letter. Henry Watson Fowler was born in Kent.

It's a load of old Coppock

The market rally continues with equities putting on a good show around the world. By just about any short-term measure the market is very overbought. It looks well primed for any adverse news to trigger a pull-back. But on the flipside, there is such a cacophony telling us this is the year of the equity and for moving down the risk curve that many players may just buy into any weakness in fear of being left out. Because we know we can't really see the future and that forecasting is a mug's game, we resort to all kinds of techniques to help us decide which way to turn. Still very popular, despite scorn from some in the investment community, is technical analysis. And there is no shortage of different versions. As one of my earliest teachers taught, "The beauty of technical analysis is in the eye of the beholder." In other words you have to find your own way, there is no magic potion. But it does have value. Technical experts are feverishly rolling out their Bollinger bands and Coppock indicators, trend reversals, point-and-figure upside targets and the like. Coppocks measure long-term trends. You can use data going back 50 years and only find a dozen or so buy signals, so they can seem pretty persuasive. The problem is that when you look at a 50-year chart on a single page it doesn't give you a sense of how much pain you might have to take while you're waiting for it to work. Tiny little blips on the chart could be twisting your stomach upside down from day to day. Edwin Coppock developed the curve in 1962 for the Episcopal Church in San Antonio basing his calculations on bereavement and mourning periods. It's useful if you apply it in your own way but can cause its own kind of bereavement as well! The QSL is from WOAI San Antonio, TX, a clear channel station heard in Morgan Bay, South Africa in 1987.