Slasher's coffee beans

Jozi, Jozi. A good day, which could have been a very good if the currency had not firmed and New York markets had not been at their worst levels of the day around when we were closing. The MPC conclusion was a non event really, there were a few that thought there could be a chance of a rate cut, but it was not to be.

The CPI read came in at 6.4 percent, so inflation certainly abating, and I suspect the firmer currency could see us sink into the band as early as the current month. Session end, we saw around half a percent better on the Jozi all share index, up 115 points to 25456.

Climate change. The debate is certainly growing and those who five years ago thought that this does not affect them, well there are more people in the camp that believe that we have to do something to curb emissions. I often think that the movement to a greener earth gathered momentum from a very bad hurricane season in 2004.

Pictures from the Beijing Olympics and the extraordinary measures that the Chinese officials took to clear the air was again another reminder that we need to do more. Polar bears drowning because the distance between floating masses of ice, just got further and further. And of course the Al Gore movie. He might not have got the top job, but he certainly raised awareness.

Former US president Bill Clinton was on CNBC yesterday talking about this, he is absolutely captivating. We sat and watched the entire interview without the usual commentary, normally from talk too much me. Bill Clinton implied that he was embarrassed that the Chinese authorities were doing more to curb emissions and move to a greener world. One where the steady warming comes under control.

All this at the UN in New York yesterday, US president Barack Obama urged all the big culprits in emissions to act together on the issues of pollution. The big meeting will be in Copenhagen at the end of the year.

Perhaps the warmest ever Copenhagen for that time of the year, average high in Copenhagen over December is 4 degrees Celsius. Wonderful, wonderful Copenhagen said Danny Kaye, I remember as a kid listening to this on long play, Danny Kaye. Perhaps that will be the theme song, listen up.

At the same time whilst the Americans were trying to build momentum going into the meeting, the Chinese failed to deliver what Bill Clinton had talked about earlier in the day. Chinese President Hu Jintao delivered a commitment without putting a figure on where he wanted to be by 2020. I guess for the time being the developing nations, who need cheap energy, will be trying to defer this for as long as possible.

Often the argument that comes from India and China is one that, alright, so you pollute and polluted like crazy when developing, but you want us to subscribe to much more expensive forms of energy, that are much greener? Yes?

But we (China, India and all the other developing nations) still need to drag ourselves out of the same place you were when you starting to developing. And now the rules have changed. If you think healthcare is a tough one, I think getting folks who are completely marginal to think about climate change is even tougher.

To put it into context, you must now appreciate that the eyes are on China, they now emit more CO2 than the Americans. But have over four times the people. Another card often that emerging markets play is that they bear the consequences of the angrier planet, whilst the Western world still pumps away, an realise that they are onto a bad thing here.

I agree with Jeff Immelt here, the chief of GE. The green theme is perhaps the single biggest agenda facing the world. Because it is real. I often think that a simplistic approach of planting more trees than you know how can help, but that is way simplistic. The trees planted should supply shade during the summer months. Studies show that in California, electricity bills in the summer can be reduced by 30 percent, by planting shade trees on the Western side of a house. The sunny side. Turn down the aircon guys……

So where are the opportunities for us down here, from an investment point of view? It might only be platinum for the time being. With emissions controls and alternative energy spaces set to grow in importance, I think that the idea of owning a green stock in your portfolio is a lot more important now than ever before.

Sadly access here is limited, but in New York it is boundless, alternative energy. Solar, wind, tidal, there are now funds completely focused to the investment themes of the future. Fad or the floor (the start), time will tell. Personally, I think it is here to stay, fossil fuels will only last as long as we can use them.

It takes a while to turn dead organisms into fossil fuels. Millions of years you see. We have less than 50 years worth of oil left at current consumption rates. And lets not forget, the stones did not run out when the stone age ended.

New York, New York. Goldman Sachs was reported to have taken a stake in Geely Automotive, by buying convertible bonds and warrants. Another sign that the future of auto makers lies to the east or west, depending on which way you look at it. 14 hours 48 minutes travel time, nearly 12 thousand kilometres. 12827 kilometres from here (Jozi) to New York. Takes a little longer than 15 hours, around 18 hours flight. So Shanghai is closer to New York.

But that does not explain markets in New York, that enjoyed a fairly good day. Energy and materials clusters did well as commodity prices rebounded. The Fed FOMC meeting concludes today and some folks are looking for specifics around exit strategy from the extraordinary measure, the state of the economy, are matters improving, just the general tone of the speech.

Session end the Dow closed at 9829, bring back those Dow 10000 caps, up 51 points, whilst the nerds of NASDAQ added eight and a quarter to 2146. The broader market S&P 500 notched up seven points exactly to 1071.

The oil price is trading flat on the session at 71.69 Dollars per barrel, the gold price is slightly firmer at 1017 Dollars per fine ounce, whilst the copper price is off a touch at 2.82 Dollars per pound. The platinum price last traded at 1331 Dollars per fine ounce, off the best levels of Hong Kong trade. The Rand is strong at 7.37 to the US Dollar, 12.09 to the Pound Sterling and lastly at 10.91 to the Euro.

Hmmmm…do you think we might be uncommitted at these levels. Or maybe the money managers long cash might turn the other way, tired of swimming against the tide. Perhaps.

Best wishes

Sasha Naryshkine
sasha@vestact.com