A thirtysomething trillionaire at the Zimbabwe Stock Exchange

A thirtysomething trillionaire. Like Wired Magazine predicted Bill Gates would be back in 1999 [you recall how that ended!]. I do not even know how many dollars or euros or francs or rands it took, but the smiling moneychangers at the Zimbabwe - Zambia border posts had more than a few. A trillion is 10.12, a lot of zeroes!

Hyperinflation is what happens when politics believe their own hype, and command the reserve bank and treasury to print money which is not backed by real assets. It ruined the Weimar Republic in Germany in the 1920s, and Latin America in the 1980's. With hyperinflation, confidence is wiped immediately, and the irresistible force of geometric compounding swamps calculators as each unit of currency becomes worth decimals of what it once did. Zimbabwe’s president has bankrupted his country. But being better educated and able to manipulate the levers of power, Mugabe no doubt has his wealth offshore. Not in Switzerland, too close to those who hold him accountable, and as of Friday, a less secret place to stash the cash. No, his money is allegedly further east, probably in Singapore, Malaysia or Kong Kong. But also embarrassingly, Mugabe may have cash in the Isle of Man and land in the UK, according to Harvard Kennedy School Professor Rotberg who has covered the ZIM corruption since 2007.

HK is where Mugabe's daughter is getting her degree. I have never met her and she may be the nicest person. Readers may recall that HK is where his wife allegedly took around USD50k cash - straight from the ZIM Reserve Bank - to go shopping, and where she managed to be famous for punching a photographer [the media is real outside ZIM]. The obliging HK administration declined to press criminal charges. Anyway, I am surprised Mugabe's daughter did not simply have her father order the university to issue her with one. But then, having driven past the University of Harare last week, one understands the head of state’s own family choosing to study elsewhere: it was impossible to see the campus buildings through the head high grass and weeds. Perhaps the student activists who reject the presence of the dictator’s child in class may create more of a challenge to “normal” than the is possible within Zimbabwe itself. If the university is anywhere decent, it will have more freedom of expression, and more accountability, than Zimbabweans have experienced in the past twenty years.

Like opinion polls to politicians or market prices to CEOs and their bankers, a currency’s worth is a relative score on the perceived health of a political economy. Which is why for the first time one may recall, the Chinese premier called upon the US to be fiscally responsible and to guarantee its good credit over the weekend around the G20 summit. Yes, the Obama USD 800 bn rescue package has a price tag, and the low interest rates and trillion-dollar spending will lead to a weaker dollar, just not today. The Economist has its own problems with it. SeekingAlpha website covered the hyperinflation effect for the US. The mighty Swiss france has become too strong for its banking and manufacturing industries, leading the Swiss to devalue their currency by intervening in the forex market. A short term strategy that “beggars-thy-neighbour”, but the CHF is small enough to slip by for now.

So where does “responsible investment” factor into the ZIM situation? In November 2008 when I visited London I recall a furore that Anglo and Barclays were making new investment into their ZIM country operations - ZIM Barclays does have the cleanest buildings. The ZIM regime is despised in a way I would think apartheid South Africa once was. But the convoluted and conflicted behaviour at a country level within the UN system, the lure of ZIM’s mineral wealth, and Mugabe’s “street cred” among African “liberation” politics including his ability to manipulate has kept him around way past his sell-by date. But how many country screens are excluding ZIM?

Few investment policies will even reference ZIM, partly because it is dwarfed by other major investable countries, and by its southern neighbour. Burma receives much more attention in the US, for example, with Chevron [NYSE: CVX] being targeted for action this shareholder season. 

The 2009 resolution seeks greater transparency on how Chevron evaluates its human rights impact, especially in high risk countries like Burma. It calls on the company to report on its criteria for investment, continued operations in, or withdrawal form specific countries. The annual meeting is expected to take place in May 2009.  The resolution was co-filed by the following institutions: Teamsters General Fund, AFL-CIO, Ms. Adelaide Gomer, The Maryknoll Fathers and Brothers, Mercy Investment Program, Newground Social Investment, Ursuline Sisters of Tildonk and the Unitarian Universalist Association. The International Trade Union Confederation (ITUC) and the International Federation of Chemical, Energy, Mine and General Workers' Unions (ICEM) have both endorsed this resolution, as has the Canadian Labour Congress (CLC). 

The unintended consequence of Mugabe bankrupting the country is that it makes a micro-point of any global emerging markets exposure at a country level. Investors into Africa probably only have indirect exposure to ZIM by holding firms that are still ticking over in the country [see Financial Mail’s breakdown of ownership in ZIM brands].


Buy or Sell ZIM?

The investment policy for investors that integrate environmental, social or corporate governance factors [ESG] is the appropriate place to look for the response at a macro level. Major institutional investors now consider ESG factors, and CalPERS has an explicit approach to emerging markets investment. Perhaps the most well-known advocate of ESG in global investment is the Norway Government Pension Fund – Global, with NKr2.275bn [Eu258bn, USD329bn] in AUM. The Norwegian Global Fund, a sovereign wealth pension fund created from North Sea oil revenues, has a investment policy explicitly outlining ethical factors, and practices investment by having an ethical council screen investment opportunities. International investors saw this in action in the pages of the New York Times and Wall Street Journal in 2006/7 when Norway flagged Wal-Mart for exclusion, generating some diplomatic activity, and raising the profile of the ethical council. It also made a useful Harvard Business School case study, Norway Sells Walmart.Later in 2008, the fund published a report on child labour: corporate governance, children and the environment remain primary key issues. In last Monday’s FTfm the fund's "thorny path" was highlighted.

The easiest route is to disregard investment merits and divest immediately, and buy back quietly when the storm has passed. This approach only generates a better investment argument if the accompanying publicity will drag on the share price wherever it is traded. Shareholder activism is a public approach to have the company address the issue. A high profile investor when faced with a high profile problem may need to take this route – the Norwegian fund has addressed the costs of climate in a white paper in response to an NGO asking a pointed question. Environmental NGO Bellona recommended the fund exclude carbon emissions violators in a report to be submitted to Norway’s parliament 26 March. Shareholder activism is not limited to ESG factors, and in each year our experience at Sinclair & Company is that some have greater emphasis than others. In 2009, clearly executive pay has become the lightning rod – just ask Messers Goodwin or Liddey what their majority shareholders [UK or US taxpayers like you] think about fat cat salaries…

Shareholder engagement is an approach by investors “behind closed doors” approach less concerned with shareholder proxies but with suasion, and better explained in hindsight and ex-post facto. The most recent, 2007 SIF report identified increased activity in the USA covered through 31 December 2006. 

The average level of shareholder support for resolutions on social and environmental issues increased 57 percent from 9.8 percent in 2005 to 15.4 percent in 2007, a record high.  The total number of resolutions increased from 360 in 2005 to 367 in 2006.  Institutional investors that filed or co-filed resolutions on social or environmental issues controlled $739 billion in assets in 2007, a more than 5-percent rise over the $703  billion in assets counted in 2005.

Engagement works in smaller, clubby circles of capitalism, where the connection between investors and companies, and the professional circles they move in, is much smaller and the prestige of the matter carries some weight. Some of the more effective conversations have come where advisors put publicly combative parties in a room, and as people and professionals new ways forward were sought. The UK, Brazil or South Africa are examples of these smaller investment circles of influence.

The shareholder activism has practical challenges. Pauline Skypala in today’s FTfm covers the recent handwringing on shareholder rights at the UK's National Association of Pension Funds [NAPF] conference last week. NAPF has been a proponent of integrating ESG factors, and is a conference of investors with a longer-term perspective. The influential Lord Myners, himself renowned to be frank, had institutional investors expressing “a lot of this [corporate governance] is rubbish”. How long investors should stay invested, whether all investors offer the same direction to a company, and when to extract investors from a situation are all practical challenges of implementing an investment strategy that [correctly] integrates governance into the investment equation.

The momentum of actions that seek to target at the country level are unpredictable, and may succeed in direct relation to the publicity, not necessarily the weight of arguments. Tibet is overshadowed by China’s massive bulk. Burma continues to attract attention of human rights activists and the investors that map to that [see GES Investment Services' briefing on Burma this month, March 2009], while countries which also have poor human rights records may feature less. It is so that ZIM attracts almost zero attention in the US while the Sudan/Darfur issue has generated major student, media and investor action. Acolytes of the sage of Omaha, Warren Buffet, have heard him explain his position on China National Petroleum Corp. [HK:0135, CNPC] because of Sudan [see Marc Gunther's 2007 Fortune piece], and they may not even know where ZIM is on a map.

ESG research providers have made available screening products that are not expensive to build and easy to pitch which focus on countries or companies that fail criteria of certain international initiatives or agreements. EIRIS has country sustainability profiles and convention ratings, and Riskmetrics ISS Innovest offers sovereign ratings in their screening boutique. Companies' own dilemna on whether to stay or go is newsworthy material for the media: should they stay or should they go? Divestment is a fairly blunt instrument. Unfortunately for the average ZImbabwean, lovely people, their country does not warrant the attention of the world, despite the country being mis-managed into -40% GDP tailspin. Divestment is a dramatic tool, with much scope for collateral damage. The investment decision is the least of matters.

Sustainablity+Investment Wishlist for Obama, ESKOM externalities

[SRI-Extra in 60secs > The Social Investment Forum's 9-point wishlist from the responsible investment industry to the Obama administration may have traction, especially the strategically important parameters for the financial markets, proxy access and even an innovation office for CSR. When will the environment not be an externality? New ideas and new actions are needed from politicians and business media, like Business Day’s editorial Monday 19 January 2009 on the end of environment as externality in power-generation investment, will help. Ignoring externalities creates false economy. Ignoring externalities is sub-optimal institutional investment. Just as in Australia or the US, every ton of low-grade coal burned by ESKOM in South Africa [120 million tons p.a. to March 2008, 130 Mt/p.a. to March 2009] has an environmental and social cost to the citizens of South Africa, and anyone downwind. It is sub-optimal to society and the institutions that power it. In the market-economy capitalist context, one needs to send demand signals to drive market solutions. We need a “mini-Stern” in Africa to state the climate challenge in real money terms, and the time value of money not spent now. Investment thinking on the continent needs an AfricaSIF that may promote integrating ESG factors while keeping tabs on the growth of sustainable finance. The trickle in specialist SRI mutual funds helps send signals, but it’s just a trickle. The “green” audience at UCT for the Humboldt conference “From Poznan to Africa” failed to connect directly their personal investment decisions to the environment issue studied scientifically. The hope of the environment as asset in investment decisions – sustainable finance made real at the intersection of sustainability + investment - will be realized one infrastructure project and one green collar job at a time, in the US or in SA. But looking hard at the cold, flat and crowded reality of 2009, expectations are way too high. GS]


Sustainablity + Investment Wishlist for Obama

The environment, though the proximate climate change issue, will command some attention in Obama's first 100 days. Perhaps, like in Whitehall [centre of UK government in London], the US may soon have an “office of climate change”. When I saw that title chipped into granite last October in London it immediately became a visual point of reference for me. Climate change was now real and to be taken into account. Environment seemed to be one step beyond being an externality. In Monday's Business Day editorial [South Africa’s leading business daily], the opinion on externalities comes close to what I hope to see in my lifetime as investment practitioner: the environment appreciated as an asset, and the word “externality” being retired forever.

In 2009 in the US, and probably in SA, some of the local and state-level climate change rules may finally make an appearance in a coordinated fashion. But as FTfm opined Monday, options are severely restrained. In a post-Poznan and pre-Copenhagen world, I agree that there is an international struggle over climate change on the horizon. Poznan failed because the Bush presidency was in final descent, the EU suddenly realized that their economies were looking pear-shaped, and the global financial crisis left any questions of financing mitigation and adaptation a long, long way from the top of the list [see The Economist's take by Emma Duncan]. The conference was also missing some key players. While environment ministers and the odd finance ministers were in attendance, energy and transport ministers and presidents were absent. Who will have more power to drive changes in energy generation policy: the minister drawing lines in the sand or the minister licensing a nation’s dollar-generating [but depleting] resources. It is a lot easier to count miners than waitrons, mines are more tangible than eco-tourists. South African Minister of Environmental Affairs & Tourism Marthinus van Schalkwyk , white Afrikaner and heir until he disbanded it of FW De Klerk's National Party, has been outspoken as lately as a representative opinion for emerging markets, both at the Poznan political meeting and in Washington DC. The NRDC and Climate Change Capital had him come and speak 13 January at "Emerging Strategies for International Climate & Investment Policy”, he referenced the SA government commitment to plateauing emissions in 2020-2025, before reduction, a sufficiently distant but plausible promise from a politician. The development vs environment dynamic is a real dichotomy for SA: the environment was spared emissions when ESKOM's brownouts left SA without electricity last January, and a slowed economy is the real reason there have been no brownouts in 2009.

"South Africa, the climate question is both an energy question and a development question. On the one hand, some 30% of households do not yet have access to modern energy services. On the other, the energy sector is responsible for some 80% of our greenhouse gas emissions, with electricity generation responsible for some 40%. Coal is the fuel used for 90% of our electricity supply".

Being on the ground, it is unclear how the demands of poor wanting electricity, and the current policy backgrounds, move South Africa to the goals mapped out, irrespective of how well the "technology, investment and policy" are mapped. The appeal for adaptation funding will be loud. But the fact that labour, society, government, business and policymakers are meeting minds is a strong positive. It certainly offers South Africa a place at the table with a coherent and articluate position representing Africa.


SIF’s Obama Wishlist

Many think-tanks and institutions have been pummeling Obama’s transition team with checklist and worklists [see the UPenn ranking of think-tanks ex-US, which includes four from SA topped by UCT’s Center for Conflict Resolution]. Net Impact used Facebook to leverage the power of their 10,000-plus MBA and professional network members to address an Open Letter: “…on how his administration can best support a sustainable social and environmental future for business”. The socially responsible investment community in the US represented by SIF urges the Obama Administration to take a number of steps:

1. Establish clear parameters and effective regulations for the financial system and stimulate transparent assessment of financial as well as environmental, social, and good governance factors;
2. Enhance access to the corporate proxy ballot so that long-term shareholders have a say in the nomination of corporate directors and in protecting shareholder value;
3. Support corporate responsibility or sustainability reporting by public companies;
4. Restate the consensus view that fiduciary duty may compel fiduciaries to consider environmental, social and governance (ESG) factors;
5. Assert global leadership in combating climate change, including through tax incentives and significant public investments in clean energy technology, energy efficiency, and green collar jobs and training;
6. Take a critical look at lending policies and create more accountability in the lending marketplace;
7. Create more opportunities for financially struggling homeowners to restructure their mortgages, helping them stay in their homes and out of foreclosure;
8. Endorse legislation that provides for socially responsible investing options in the federal government’s retirement plan;
9. Create an Office for Innovation in Corporate Social Responsibility to enhance and coordinate inter-agency CSR activities, allowing the federal government to become a state-of-the-art leader in CSR across its vast domestic and international arenas of influence.

The two most strategically important are the parameters and the proxy access, offering a strategic direction and a current execution of that to implement the change. Parameters are the larger discussion. FT on Monday argued that some more regulations are the least we should pay to avoid another meltdown. Perhaps fitting that Trinity Church Wall Street is hosting a global conference the day after the inauguration of the “Theology of Sustainability” where perhaps the sidelined Wall St bankers will enjoy “[r]e-imagin[ing] an abundant world measured not by personal consumption but by just and sustainable relations with nature and communities”. In our role at Sinclair & Company as advisors on integrating ESG factors into investment policy and practice, we are staunch supporters of governance and accountability in all its forms in any private or public sector climate. So here’s hoping the ninth idea on the SIF wishlist for an “Office for Innovation in Corporate Social Responsibility” gains traction, being based in part of the findings of the General Accountability Office GAO report on CSR in the US back in 2005.


Ignoring Externalities

Almost lost in the Obama buzz this week is the proposition that SA companies which have cash may dip into deals in Africa or abroad, inspired of course by the influential Rupert family maneuver to buy into Lehman’s private equity assets via the Reinert investment vehicle currently holding a large chunk of BAT shares after being spun out from Richemont. The BR covered the report by mergermarket, an international mergers & acquisitions (M&A) intelligence service. Mergermarket detailing M&A activity involving SA companies fell sharply in 2008, by 45.8 percent, to $14,4 billion (R143.4 billion) [this number conflicts with Thomson Reuters, which put the total M&A value involving South African firms at $24.1 billion]. The dominant British relationship was evident in that UK firms had 13 deals valued at $3.2 billion, or 76 percent of the overall value of inbound deals. UK's Vodafone Group $2.1 billion additional stake in cellphone network provider Vodacom was a large chunk. Which explains why the only Blackberrys being offered in SA by Vodacom are older Vodafone stock. And Oxfam is still seeking capital for its Cape windfarm project.

ESG in valuation is current but absent in investment analysis. Deloitte South Africa today presented their opinion about cap-and-trade [the Obama option] being more effective than a carbon tax [mooted by Finance Minister Manuel in 2008]. Business Day editorial hammering the short-termism employed by ESKOM in not building more alternative power-generation assets offered a good start to the week for a sustainability + investment practitioner. The Humboldt conference at UCT last week disappointed from a corporate investment or institutional asset management perspective: scientists were happy to cover the minutiae of their studies, but there was little assessment of the capital to bet on any direction. Perhaps more coverage by UrbanSprout will help, see 2007 Urban Sprout Carbon Calculator. Presenters did offer that a “mini-Stern” had been conducted in SA, but its absence from the financial lexicon in SA has not motivated investors as it did in Europe. The 2006 Stern report from the UK on the costs of climate change helped monetize the choices facing private, public and policy sectors; note also the Stern 2008 update confirming the situation is much worse than forecast. We need a “mini-Stern” in Africa beyond what was launched in SA in 2007, and the AfricaSIF that may promote it while keeping tabs on the growth of sustainable finance. Like the Norwegian SIF that last week finished a good valuation research piece as part of their Sustainable Value Creation Initiative [more on that initiative led by KLP's Jeanett Bergan soon]. Conversations with Jon and William later this week may move things forward another few yards.

At “From Poznan to Africa”, the room looked stunned when I posed the question of what each person in the room was doing about sending an investment signal by demanding more green investment. It was the same case I have made since the Environmental Leadership Program in 2004 in Philadelphia. To the self-selected “green” audience at the public meeting hosted at Kirstenbosch, it was as impactful: what is in your portfolio? How are you integrating ESG factors? Rows and rows of incredulous eyes stared back. That simple message – in the market-economy capitalist context, one needs to send demand signals to drive market solutions - is as powerful as Peter Bruce’s BD editorial on Monday. False Economy opined that there are no externalities; every ton of low-grade coal burned by ESKOM in South Africa [120 million tons p.a. to March 2008, 130 Mt/p.a. to March 2009] has an environmental and social cost to the citizens of South Africa [see Climate Change Corp's Dec 2007 article and article on ESKOM 2008 emissions]. ESKOM has announced an intention to build 100MW wind farm in the Western Cape. The “washed” coal is “better” quality, and it is exported. Millions of tonnes. Which in turn re-directs technical skills – an opportunity cost in a nation with a skills shortage - and which wears out infrastructure in a country where infrastructure is a top priority for investors, including pension funds targeting ESG as our 2007 study revealed.


Highest per capita Carbon Footprint in Africa

South Africa is the country with the highest per capita carbon footprint in Africa and one of the highest in all emerging markets. Ideas impacting SA’s direction are as strategically important as SIF’s 9-point wishlist is to Obama. As BD opines, “[i]nvestment in alternative energy [is] compellingly affordable” with the right policy direction [there are more than the two fundamental ones offered by BD], and the right incentives [see the mistake-riddled defence from Petrochemicals spokesperson in today's BD]. Like rewarding corporate and institutional behaviour that incentivizes lower priced power in environmentally sustainable way. Which is where by now – nearly three years after the launch of the PRI in April 2006 at the NYSE - one would have expected the “presence” of at least the African investors in ESKOM to have become apparent. A positive sidenote is the fund democracy of the largest pension fund in Africa, SA GEPF, currently advertising for pensioner trustee representatives.

The relative silence on ESG issues in proxy action and investment analyst meetings in Africa is as deafening as the audience at the Humboldt lecture. The odd uncomfortable comment may tip-toe around “ethical” issues – the usual comments on “sin stocks”, but not in the ordinary analysis. When last did you see a direct reference to climate change costs in the quantitative analysis of a power-generating utility in emerging markets [see ESKOM's reference to environmental externalities in 2006]? In the US, a client in Manhattan reports their carbon calculator integrating Carbon Disclosure Project [CDP] 2008 data on electric-power generating utilities is interesting to their fixed income team, ignored by the equity team. In SA, while the FM carried the chains of bankers nervous on the cover, perhaps it was fitting that Enviroserv Waste Management
advertised on the back cover.
SRIX.GS

Emerging Markets…Brutal BRICs?! II/II

In the week that began with Citi [C] becoming the US government's latest shareholding, JPMorganChase [JPM] was pitching their core competency as a lender, and Goldman Sachs [GS] was looking to stretch their sustainability advantage branding their research and investment products. JPM was busy offering a full page advertisement in WSJ Eastern edition A5 Tues 25 Nov pitching to the WSJ readership on their commitment to lending [“Our Business Is Lending. And That’s Exactly What We’re Doing”], including “in a responsible way”. Yes, I can only imagine what my mate who taught me how to build a BS filter for company ESG claims, the KLD research director in Boston, will say about that one!

Goldman Sachs was taking the front foot in the FT Mon p.3 with the first above-the-line hardcopy advertisement I have seen for GS Sustain, a fair advertising budget commitment to go above-the-line. Of course GS hedged bets by burying the ESG lead in the body, the sub-title “innovative thinking finds innovative companies”, and one has to mine the paragraph further for “a unique global equity strategy that brings together ESG (environmental, social and governance) criteria, broad industry analysis and return on capital to identify long term investment opportunities”. But GS now fronts their homepage with GS Sustain. Clearly someone is taking a big bet, and perhaps with freefall markets, a good time to try something completely different.

GS Sustain has a colourful history. It's strong underpin is from the GS sell-side in London via the work dating back to 2003 of Anthony Ling in the Energy Equity Research team, and then taken forward by Sarah Forrest, Marc Fox and colleagues. Sarah is now an Executive Director for Global Investment Research. After finally establishing a coordinated framework in early 2007 – GS Sustain – which launched to plaudits from the usual UN Global Compact types and affiliates in Geneva last July, the GS Sustain brand has been slowly building. Like IBM, no presenter looks dumb when quoting GS – a false security to be sure – but expedient for now. Indeed, in my MBA865 seminar at Kenan-Flagler Business School, Sustainability in Investment Strategy at Chapel Hill last week, one of the most informed students referred to “it’s Goldman Sachs!” as the GS halo in the ESG space proves to light the way for less skeptical inquiry of how sustainability plays in. Clearly GS benefits from being one of the two last i-banks standing, [mostly!], and may push for competitive advantage on sustainability matters in the FT, the print daily which positions itself in US as more global than the WSJ or NYT Business Day as a major business daily. Companies, as they do with any positive third party assessment, but especially when it is a major i-Bank brand, are only to happy to tout their standing in any competitive assessment, such as BG Group [LON: BG] a natural gas company.

I was first alerted to the new GS Asset Management product built off the GS sell-side’s GS Sustain framework in Manhattan at the Sustainable Investing 2008, People. Plant. Profit. on September 23-24th, 2008 at The Harmonie Club, New York City. At that time the product was available offshore only, but now institutional US clients may access it. The conference was hosted by Financial Research Associates, LLC for the first time, as a new conference publisher entering the sustainability space, with assistance from SIF.

In the next two weeks I will be having a more solid look at GS Sustain GSAM product as forward planning for when it has run a year at least and we may start recommending the strategy from an informed understanding to the benefit of asset owners and multi-managers. I like that GS Sustain is in the game, for sure, but a close examination of some of the underlying criteria makes me cautious based on my past experience of ratings that are built on "box checking". The framework looks good, but underlying data, and assumptions like memberships of an initiative or international organization sending signals about sustainability, may be sub-optimal. I am cautiously positive, and our recommendation at Sinclair & Company to investors is to observe closely, and stress-test the ideas before becoming convinced. I have not reviewed the strategy in detail since hearing about it in late Sept, partly because the most impressive aspect of the Sustainable Investing 2008 event had me moving to other thinking. Other than Tim Smith’s usual excellent chairmanship [when not chairing SIF, he is in Boston as Senior Vice President at Walden Asset Management], was the compelling speech by Joe Keefe CEO of PAX over lunch, one of the best expositions on where ESG/sustainability investment is in 2008, and where it may go, an extract of which is here.

And of games, well, it just would not be right to cover emerging markets and London in the same story, and fail to mention Saturday's smashing game the Springboks played against England which CNN titled "Springboks Thrash England at Twickenham". Rugby, like life, rewards grit as well as grace, with patience a coaching watchword lately. So comprehensive, the Brits found time to boo their team. Yikes! The tackles, the tenacity and the touch South Africa showed against England in their backyard, racking up the Roses’ biggest ever loss at home, was a fresh reminder of the entrepreneurial and rugged nature of the boys from the bottom end of Africa.

Sarah is an Aussie, so she would have enjoyed it, and the headliner from The Australian "Springboks Outclass England at Twickenham". The boys from Goldman are credited with the BRIC moniker coined the term ‘BRIC’ in our Global Economics Paper, ‘Building Better Global Economic BRICs’, published on November 30, 2001. Maybe they had seen Bakkies [“bricks”] Botha make a tackle sometime before, like the try-saving one he made on Saturday? [sidenote: should every rugby player hope for a wikipaedia entry?!]. Yes, I know, South Africa has the ability to play sublimely one week [has Australia recovered from 50-odd thwack at Ellis Park, their biggest ever Test loss?] to the slack - only one Tri-Nations title in all these years. But as I pitched at the Paris UN PRI Board meeting in Nov 2007 - to the sullen looks from the Englishman directly after Springboks won in Paris [and a smile from the Frenchmen] - nice to see EM on top. A small smile for EM slips out when running through the scoreboard from Saturday: Emerging Markets 42 vs. Developed Markets 6.

The England coach called it “brutal” and “a lesson”. Pretty much sums up the financial meltdown for EM and the rest of the world too, and the bleak '09 outlook. Enough said.

SRIX.GS