Latest news with #Panicof1907
Eyewitness News
3 days ago
- Politics
- Eyewitness News
The people must ceaselessly challenge the lawlessness of the SA government
Malaika Mahlatsi 30 May 2025 | 13:08 Nandipha Magudumana appeared at the the Bloemfontein High Court on 5 June 2024. Picture: Katlego Jiyane/Eyewitness News The people must ceaselessly challenge the lawlessness of the SA government A few weeks ago, the Supreme Court of Appeal of South Africa delivered a judgment in the Magudumana v Director of Public Prosecutions, Free State and Others. The case sought to decide whether Magudumana's extradition from Tanzania (which she contends was, in fact, an abduction by the South African Police Service (SAPS) on the instruction of the South African State) was lawful. The majority judgment found that it was. But Judge Makgoka, in his minority judgment that has been lauded by international law experts, disagrees with his colleagues, arguing that the arrest of Magudumana was unlawfully disguised as an extradition when it did not, in fact, follow proper extradition processes. The judgment is extensive, delving into the complexities of international law. But it is on page 43 of its conclusion that Judge Makgoka makes a profound reflection, one that goes beyond the case in question and to the very issue at the core of the moral crisis of the South African state – its perennial lawlessness. Speaking to this lawlessness, Judge Makgoka quotes the words of Judge Louis Dembitz Brandeis in the Olmstead et al v United States judgment, where the then Associate Justice of the Supreme Court of the United States made this profound input: 'In a government of laws, existence of the government will be imperiled if it fails to observe the law scrupulously…Government is the potent, omnipresent teacher. For good or for ill, it breeds contempt for the law; it invites every man to become a law unto himself; it invites anarchy'. Judge Brandeis had spent many years challenging the erosion of morality on the part of the American state, specifically about its problematic relationship with the banking industry. For Brandeis, this relationship was one of the roots of corruption within the state, particularly because of the stranglehold that the industry and its lobby had over politicians. Nowhere was this relationship more evident than in the influence of the leading financier and investment banker of America's Progressive Era, J.P Morgan, who directly and indirectly directed American economic policy, particularly during and following the Panic of 1907. I found myself reflecting on Judge Brandeis' argument on the danger of a lawless government in the context of the recent (now withdrawn) appointment of board chairs of the Sector Education and Training Authority (SETA) and the consolidated general report on local government audit outcomes by the Auditor-General (AG). A few weeks ago, the Higher Education and Training Minister, Dr Nobuhle Nkabane, announced the board chairs of SETAs that comprised largely of African National Congress (ANC) leaders and former leaders. Following public uproar, the minister withdrew the appointments and indicated that the process would be redone. But while she claims that the withdrawal is indicative of her regard for the voices of the people, her actions border dangerously on lawlessness, or at the very least, very serious unethical conduct. That the minister presided over the appointment process and signed off on it as the Executive Authority, and then failed to account and explain her actions, choosing to restart the process, is a dereliction of duty. In South African labour law, dereliction of duty, which refers to an employee's intentional or conscious failure to perform their duties, is a serious offence, potentially leading to dismissal. The AG's report paints a debilitating picture of the state of municipal finances in the country. Only 41 of the country's 257 municipalities received clean audits. In cases of those that received unqualified audits with findings, which amount to 99, the issue of financial mismanagement is at the centre. Of particular interest for me is the City of Johannesburg, the nerve-centre of the national and regional economy, and a city that I call home. That the metro is in a state of collapse is no longer a question. It scores highest in all areas of poor performance - having the highest unauthorised expenditure at an alarming R2.8 billion, the highest water losses at R2.9 billion and the highest electricity losses at R4.9 billion. The metro also has high levels of fruitless and wasteful expenditure, with the amount standing at over R350 million in the last three years. The AG's report also noted poor governance not only in the municipality and its entities. But of significance is the criminality that the AG flagged. According to the report, nearly R1 billion in contracts in the City of Johannesburg were awarded to companies with close ties to employees of the municipality, including councillors, who failed to declare conflicts of interest in the 2023/2024 financial year. This is in direct violation of the law. The Public Administration Management Act (PAMA) 11 of 2014, specifically Section 8 (2), and Regulation 13 (c) of the Public Service Regulations, 2016, prohibit State employees from conducting business with the State or being a director of a company doing so. What this indicates is that there is a flagrant disregard for the law in the City of Johannesburg and other municipalities across the country. These are two of many instances in which the political leadership of South Africa has been very casual about being party to or presiding over complete lawlessness and immorality. It has become so embedded in our society that it does not shock anyone anymore. It is just another news item – another point of discussion on social media before something else grabs our attention. But this should not be the case. The people of South Africa should be ceaseless in challenging the lawlessness of our government whenever it rears its ugly head. Forcing the minister to withdraw her appointments was a step in the right direction. We should do more of this. As Brandeis so correctly asserted, the government should never engage in acts of lawlessness because this breeds contempt for the law and invites every man and woman to become a law unto him/herself. This breeding of anarchy is the foundation on which the erosion of the state is built. Malaika, an award-winning and bestselling author, is a geographer and researcher at the Institute for Pan African Thought and Conversation. She is a PhD in Geography candidate at the University of Bayreuth in Germany.
The South African
4 days ago
- Business
- The South African
Warren Hammond's Personal View: EUR/USD at 1.50 – The Price of Reckoning
In March 2016, The Personal View, released 'The USA – The Next 18 Years', and I warned of an anticipated period of deep structural transformation in the foundational architecture of American finance. My decade-long 2016 forecast continues to gather relevance: 'For far too long the USA, and others, have been locked into a pattern and habit of high-flying, risky investment and consumption, the very source of the 2008 meltdown…the USA has not dealt with its obsession with debt and risky investment…Ultimately, over 18 years, the results are very positive as structural reform is implemented.' We now approach a scenario where EUR/USD at 1.50 is inevitable, as the consequence of sustained U.S. fiscal excess, speculative momentum, and monetary distortion. It's about a reassessment of the value and credibility of the U.S. dollar itself. And yes, there is a volatile, disorderly glide path to 1.50. It doesn't happen in the afternoon. See The Personal View: 'Positioning for the Market Turmoil Ahead (2025–2028)'. This forecast is part of a broader theme: the idea that when debt-driven consumption and high-risk investment are treated as the nectar of the gods, the price is losing one's head before reform arrives. As the Panic of 1907, led to the creation of the Federal Reserve in 1913, today's challenges are forcing the system toward structural overhaul. Yes, the U.S. issues debt in its currency, and it can print to meet obligations. However, this monetary flexibility comes at a cost. The real price emerges through dollar devaluation, inflationary pressure, and the erosion of monetary credibility. We are witnessing a fiery, necessary transformation, a phase where the financial status quo is washed away, creating space for reassessment, recalibration, and redefinition of the institutions at the core of the U.S. system. The Federal Reserve, designed for a different era, increasingly outmoded, faces a world it wasn't built to manage. Its role and structure are being reformed in time. The pillars of U.S. post-war dominance, cheap capital, endless leverage, and default intervention, are being sanctioned by investors. In 2016, The Personal View warned: that indulgence in debt-driven speculation and consumption cannot persist without profound consequences. In 2025, this reform is no longer merely my forecast. It's underway. The U.S. financial landscape is being deeply overhauled. What emerges will reshape domestic markets, global capital, reserve structures, and strategic influence. See The Personal View 'Megatrends & The Future of Capital'. This isn't another cycle. It's the dawn of a new financial epoch. What's your take on the dollar's future and the road to EUR/USD 1.50? Join the conversation below. Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1 Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
Yahoo
01-05-2025
- Business
- Yahoo
What is a bear market, and are we in one?
In some cultures, bears symbolize courage, strength, and wisdom. Investors have a different view. To investors, bears mean falling stock prices and anemic portfolio values. A bear market occurs when stock prices, according to a benchmark index, fall 20% or more. The S&P 500, the Dow Jones Industrial Average, and the Nasdaq Composite Index are popular benchmarks representing different segments of the U.S. stock market. All three indexes dipped in the wake of new tariff policies announced on April 2 by President Trump. After stock prices declined, experts began warning of a new bear market in the U.S. Let's explore what this warning means, whether we're in a bear market, and what actions you can take to protect your wealth. This embedded content is not available in your region. Learn more: How to start investing: A 6-step guide A bear market is a prolonged reduction in stock prices of 20% or more from a recent high point. While some investors may view bear markets as the enemy of long-term returns, periods of weaker stock prices are normal and necessary. Without bear markets, investing risk would be limited. And without risk, investors would pay more for stock, limiting potential returns. The table below outlines key bear market characteristics, including how often they happen, how long they last, and how severe they are, according to Goldman Sachs research. Bear markets are temporary detours from bull markets, or periods when stock prices are rising. A 20% gain from a recent low point is an accepted bull-market threshold. Bull markets last longer than bear markets and more than offset bear-market losses. This is evident in the stock market's long-term returns. Over time, stock prices grow an average of 6.5% to 7% annually, net of inflation, despite periodic bear markets. Learn more: Create a stock investing strategy in 3 steps A market correction is a decline in stock prices of less than 20% from a recent high. While there's no firm threshold, many investors begin talking about corrections when stock prices have fallen 10%. As with bear markets, these price movements are usually measured by changes in a major benchmark index like the S&P 500. The S&P 500 hit a high of 6,147.43 on February 19, 2025. A 20% decline from that point would be 4,917.88. The index did fall as low as 4,910.42 on April 8. On April 9, President Trump paused most of the new tariffs, and stock prices rose. In this case, the S&P 500 fell 20% and quickly rebounded. That does not constitute a bear market. However, the index's closing level of about 5,375 on April 23 remains more than 10% below its February high — which does meet the market correction threshold. Learn more: Panic of 1907: The stock market crash that brought us the Fed Market corrections and bear markets happen when more investors are selling vs. buying. This trend is often prompted by uncertainty about future business conditions. Changing tariff rules and a rising conflict with China are two factors that sent investors looking for more safe-haven investments. Learn more: How to invest in gold in 4 steps Selling stocks before a bear market or correction begins can be a good strategy. If you sell while prices are still high, you get maximum value. You can then redeploy the funds temporarily in safer assets. The challenge is that most investors cannot accurately predict the timing of stock market cycles. A mistimed trade can result in unnecessary losses or missed opportunities for gains. You can avoid mistimed trades by following the simplest bear market investing strategy, which involves making no changes to your plan. Keep contributing to your 401(k) and brokerage account, hold on to your stocks and funds, and wait for the bear market to end. Learn more: How much should I contribute to my 401(k)? Maintaining the status quo on your investing activities during a bear market provides these advantages: Your dollar buys more when stock prices are down. You can add to your share count faster in bear markets, which positions you nicely for gains in the future. You avoid realizing losses at temporarily low prices. A stock can fall from $100 to $75 and then quickly rise to $110. You don't want to sell at $75. You remain invested and able to benefit from recovery gains. Gains near the end of a bear market can be extreme. Staying invested is the only way to participate. You don't have to make decisions. Bear markets are stressful. You might be anxious about doing something — anything — to stem your losses. Permitting yourself to do nothing can alleviate that worry. Bear markets happen, and a 20% or more decline in stock prices has a chilling effect on your net worth. The good news is, these cycles are temporary. And that gives you the option to ignore the headlines, stay calm, and continue investing to move toward your long-term financial goals. Tim Manni edited this article.
Epoch Times
23-04-2025
- Business
- Epoch Times
The Confrontation Between Trump and the Fed
Commentary The popular movement to question the Fed's prowess in managing the nation's money has grown for decades, with countless books and articles and mounting evidence that something has gone very wrong. With the Trump administration's overt criticisms and even threats to fire the chairman, now dialed back, we have entered a new era. It is no longer the untouchable subject. It's about time. The Federal Reserve was created in 1913. If you understand American politics and intellectual culture at the time, you can understand the thinking. We'd been through several decades of astonishing economic growth marked by tremendous technological achievements in lighting, transportation, metallurgy, energy, communications, and flight. It all happened at once, and it caused dramatic increases in living standards. The great question of the day was: Why has all this happened at once? I have my own answers to this question that relate to freedom, trade, and capital accumulation. An easier if less sophisticated explanation, and the one pushed by most respected thinkers, was better engineering backed by science. Engineers and scientists basked in glory as cities rose up into the air, planes flew overhead, and the darkness turned to light. Related Stories 4/22/2025 4/9/2025 The prevailing ethos was that the experts could fix anything with enough resources, power, and good plans. So it was for banking. We'd lived through decades of bank failures, business cycles, skewed investing signals, and seeming chaos especially with the Panic of 1907, the event that created the rationale for a new system. The solution seemed obvious. Bring the best and brightest, the most experienced and the most far-seeing, together in a room and create a central bank like Germany and England. That way we can bring rationality, good engineering, and science to the cause of money, banking, and economic management. The Fed was born as a quasi-government institution, a public-private partnership, that would invite every bank in the country to be part of its clearing system. The government would grant the monopoly in exchange for the bank's willingness to guarantee public debt. Then the experts would take charge, managing money creation, interest rates, and business cycles. Everything looked good on paper. They would favor business stability, keep banks open during a crisis, foster job creation, and keep inflation under control. The architecture of the new system seemed perfect, at once decentralized in states but also centralized in New York and later D.C. What could go wrong? The fatal flaw was the relationship with the federal government, which was the Fed's benefactor. It obligated the Fed to swing into action when called upon in exchange for retaining its banking cartel. In effect, government now had a printing press, which is a prescription for disaster. No one said that, but that is exactly what it meant. The Fed would face constant political pressure to keep rates low, keep the financial system liquid, keep bank failures at bay, and effectively fund whatever policies, however crazy, the government had in mind. Thus came the Fed's first major job: funding U.S. intervention in the European conflict that came to be called the Great War. The printing presses got busy and made the war possible, not only for the United States but for all the European governments too. This was the first great central-banking war. With the power to print, government had less incentive to rush to peace and contain the wars. That's why this war was the first 'total war,' meaningful involvement of the civilian populations across many countries and including conscription. In the aftermath, most currencies were devastated, including the U.S. dollar. It was a sign of things to come. The Fed had said it would keep business cycles at bay and curb inflation. The exact opposite happened, decade after decade. The core reason: whereas the old system served depositors, the new system mainly served the government and itself. Of this there can be no doubt. The big picture following a century and a dozen years is that the purchasing power of the dollar has been crushed. A dollar in 1913 is worth $0.03 today. Not even the great inflation in Spain in the High Middle Ages reached such levels. (Data: Federal Reserve Economic Data (FRED), St. Louis Fed; Chart: Jeffrey A. Tucker) The Fed has abused its power and the government has abused the banking and money system to feed the growth and entrenchment of a Leviathan state. None of the architects of the Fed itself anticipated such a result. They were accomplished men of finance and banking who were certain that they could do a better job than the exigencies of a decentralized banking system with its periodic crises stemming from bouts of speculative frenzy. In trying to perfect the system, they created a tremendous mess. The problem is not just inflation but the instability generated by centralized control of interest rates. The business cycle has become more severe since its creation, with effects more profoundly impactful on labor markets. Before the Fed, hardly anyone really spoke of a problem with structural unemployment because there were always things to do and always people to pay others to do them. After the Fed and especially following 1929, unemployment was added to the chronic conditions of modern economic life. There is another feature of the Fed that has become obvious since Richard Nixon took the United States off the gold standard and an agreement made the dollar the currency for the world. It became the tool of settlement for all international trade and every government in the world was happy to hold dollar-based assets. Every student of trade can tell you that the country with the strongest currency will always be outgunned as a producer and exporter. All else equal, production will be more advantageous elsewhere. There is a fix for this, which involves allowing purchasing power to rise domestically and production costs to fall to match those of our trading partners as their cost structure moves in the opposite direction. That's how accounts are settled. The Fed did not do this. Instead, it permitted wide abuse of the dollar's status to keep cranking out the funding for the welfare state and the military machine, with forever debts and deficits piling up and now threatening prosperity in a fundamental way. The number of financial crises is legendary. Let's blast forward to the present moment. Trump has distinguished himself as the major statesman in the 21st century to observe what is now very obvious. He has said that the United States cannot thrive long-term as nothing but the debt-laden consumer of China's production. We need to reclaim our position as a manufacturing nation. Tariffs are the way, he says. Financial markets have not been warm to his plan. Initially befuddled by the skepticism, he has finally decided that the real problem is the Fed itself. He demanded that it lower interest rates, to which the Fed responded that this is risky. It just conquered a wicked inflationary bout. Why should the country risk yet another with another round of quantitative easing? Jerome Powell makes some good points, but there is a lack of credibility here. The Fed waited far too long to raise rates the last time—from zero the last time Trump was in office—and now Trump believes they are waiting too long to lower them this time. But let's ask a more foundational question: why should this be up to the Fed rather than be left to market forces? Trump's outlook and demands are worthy of doubt but it seems to be his role in life to raise the question that cries out for answers. Why should the Fed have so much power? What is this codependent relationship between the central bank and the central government? How could it not veer toward corruption and mismanagement? After more than a century of experience, it is time to rethink the great error of its initial creation. Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
