GIULIETTA TALEVI: ‘Mistakes’ of the lockdown are depressingly common

When in doubt, dust off the father of the nation, Nelson Mandela.

After a depressingly long homily – which felt a little like the lockdown itself: initially promising and gung-ho, then seemingly endless – President Cyril Ramaphosa last night invoked the only leader to have united our fractious land.

Ramaphosa did, mercifully, speak vaguely of a plan to shift the country to a level 3 lockdown from level 4 – but that will only be at the end of May.

So, whether Mandela’s call to rise above our differences will appeal to a nation weary of economically crippling confinement, made worse with incomprehensible and irrational regulations, is anyone’s guess.

I’m not holding my breath, although it was refreshing to hear Ramaphosa acknowledge that his team have made “mistakes”.

“Some of the actions we have taken have been unclear and contradictory and some have been poorly explained … and some have involved a lot of anger and opposition,” he said.

Let’s hope the mistakes he alluded to — like clothing commissar Ebrahim Patel’s ludicrous e-commerce clampdown — will be swiftly rectified.

After all, it’s becoming apparent that while the government has no real idea what the fourth industrial revolution entails — other than some classy insignia sewn onto Stella Ndabeni-Abrahams’s outerwear (apparently allowed under Patel’s code of Covid retail practice) – SA’s top retailers often appear equally at sea.

Think Woolworths, a company so inundated with online orders that it may deliver your parcel of perishables in a month, if you’re lucky.

This flailing prompted Delphine Govender, who runs Perpetua Asset Management, to tweet in frustration: “Dear Woolworths, Truworths, Pick n Pay, TFG et al, I am going to send you weekly reminders that if you don’t throw an A+ team at your e-commerce strategy immediately, you will have only yourself to blame in how you will lose share. Just do it!”

While Patel’s ministry obsesses over crop bottoms (your guess, honestly, is as good as ours), both he and our retailers would do well to have a look at this article from The New York Times, which examines online retail trends since “shelter-in-place” measures shut traditional bricks-and-mortar stores in the US.

“Beyond what might be temporary shifts,” it says, “consumer habits appear to be changing in ways that may well endure beyond the pandemic and determine who will become the most important online players.

The new trick: picking the losers

More broadly, it seems the “fear trade” is back on in the market — not helped by a raft of nervy headlines from the Financial Times (FT) this week, from “Fear factor threatens stocks’ Covid-19 fightback” to “Investors struggle to hear signals from bond markets” and “Strategists query sudden ‘sprint’ in US stocks”.

And traders who’ve enjoyed a mammoth bounce in the share market since its March nadir may be feeling even more circumspect following Federal Reserve governor Jay Powell’s address to the Peterson Institute on Wednesday. Powell argued that the US needs to stump up more money to support Americans – over and above the $3-trillion in stimulus already pledged. He added that the US risks an “extended period of low productivity growth and stagnant incomes”. The FT has a great summary of that address here. 

Perhaps the trick for the smart money now is stock selection in reverse: who are going to be the losers and the fall guys, rather than the winners? If people stop paying their bills, for instance, who is going to fall to pieces first?

The property market, everywhere, seems an obvious contender.

Our colleague Joan Muller has written about the looming threat to the outdated notion of the office, and in this piece, The New York Times looks at how a work-from-home future could affect the entire ecosystem of a high-rise city like New York – from transit systems, to restaurants, to shops, to, crucially, tax. 

In the meantime, keep your sourdough starters fed and get the pineapples ready. We’re in for a very long haul.

*Talevi is the FM's Money & Investing editor.

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