From Gareth Stokes, MoneyWeek editor, SA

Dear MoneyMorning reader,

If you enjoy a good laugh then a quick flip through the business pages is highly recommended. Many of the economic proposals in the wake of sub-prime belong in a Monty Python film rather than the World Economic Forum. Whatever the topic you’ll find something worthy of ridicule.

Read on...

Let’s begin with executive bonuses. As the kingpins at the world’s major banks sift through the debris of their once magnificent institutions it occurs to them that demolition is an accomplishment too – and should be rewarded. We’re not sure which example to share with you. Ex-chief executive at Merrill Lynch – John Thain – tried to tap dance his way to a $10m reward despite his company’s $15bn Q4 2008 loss. And Royal Bank of Scotland – fresh from achieving the largest corporate loss in British history – was quick to read management the riot act. “Bonuses will be slashed to £1bn!” the bank screamed, “and you’ll not get a penny more if you do worse next year!” South Africa’s chief executives seem similarly nonplussed. Short-term insurer Mutual & Federal announced that executives would be handsomely rewarded despite the near R1bn reversal in investment income this year. You see – they’re not judged on investment decisions – but on the company’s operational outcome.

First prize for comic macroeconomic policy goes to Muammar Gaddafi. The Libyan ruler – and head of the 53 member African Union – wants to create a United States of Africa with a single currency and consistent economic policy. Raise your hand if you can guess who Gaddafi would back to lead this wasteland! His “ludicrous fantasy” is flawed on so many levels MoneyWeek hardly knows where to start. Perhaps Gaddafi will learn something from a quick study of the world’s most successful economic union. The European Union functions seamlessly during boom times; but during recession leaders must keep their citizens happy, or lose at the next elections. That’s why French Prime Minister, Francois Fillon, has attached plenty of ‘only-ifs’ to the €6bn bailout for auto manufacturers Renault and Peugeot-Citroen. It’s strictly French money for French citizens to make French cars in France!

What about South Africa, you ask? We’ve produced our share of comedy in the last 48-hours. Our reluctant President has suggested that Zimbabwe adopt the rand as its trading currency and that the Reserve Bank roll up its sleeves to make this happen. It might be a great idea. There are so many Zimbabweans earning in South Africa already, and so much commerce in Zimbabwe is already conducted in dollar or rand, that it’s possible nobody will notice the difference. But our favourite local gaff comes in the form of an open letter from Integer Home Loans chief executive Simon Stockley to international swimwear model Caprice.

On learning that she wants to dump her South African property assets he chides “it’s a bit like launching a swimwear range in the middle of a snowstorm!” He urges her to wait for better times, “for the summer to return.” Will it? Stockley isn’t the only person with an opinion on real estate prices. In today’s feature article on page 20, James Fergusson shares his thoughts on the prospects for residential property in the UK and the US.

Turning to the markets

The JSE All Share Index closed down 0.08%. The Gold Mining Index fell 0.72%. Resources added 0.77%.

Banks and Financials closed in the red 0.68% and 0.58% respectively. Industrials decreased 0.92% and the Platinum Mining Index lost 4.78%.

London’s FTSE 100 closed negatively 0.30%. The Dow Jones is down 1.04% and the Nasdaq followed 0.48%.

Tokyo’s Nikkei fell 0.16% and Hong Kong’s Hang Seng closed down 1.71%.

Brent crude is currently trading at $44.85 per barrel.
Spot gold’s trading at $938.27 and platinum was last quoted at $1059.00.

And here’s how the rand is performing against the major currencies:
R/$ 10.02
R/£ 14.25
R/€ 12.78
 
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