Interest, usury and time: a comment1

In this comment it is argued that the paper titled "Interest, usury and time" by J. Tiemstra shows a misunderstanding of the role of interest as remuneration of the production factor capital, as well as the fact that interest also implies the price paid for money as a commodity. This misunderstanding by some Christian economists may sometimes be ascribed to the fact that they still believe there is some validity in the Scholastic views on interest. The distinction between nominal and real prices (interest) for money also becomes a problem when monetary policy is examined. In this comment views on interest and usury will be discussed briefly and then some o f the statements that Tiemstra made in his paper will be dealt with

Seasonality As An Unobservable Component In South African Agricultural Market Data

The shortcoming of most of the tests for seasonal patterns is that the problem under investigation is formulated in a stringent manner, leading to a test of the null hypothesis of no seasonality against the alternative of deterministic seasonality. These tests would typically involve using models that incorporate deterministic dummy variables that are then used to capture seasonal effects in the data by means of a regression. This implies that the possibility of stochastic seasonality, which is manifested by changing seasonal factors over the sample period (deterministic seasonality implies constant seasonal factors), is ignored. A possible more comprehensive/rigorous approach would thus be to test for the presence of stochastic seasonality versus deterministic seasonality. The aim of this paper is to investigate the possible presence of unobserved seasonal components in South African agricultural market data, with the emphasis to demonstrate the additional insight such an approach can provide to researchers and especially for pairs trader

The economic architecture of the two De Kocks

Although the annual budget speech traditionally focused on fiscal matters, the minister of finance regularly covered monetary policy issues in his speech. This paper reviews and compares the monetary policy statements/views expressed in the budget speech with the monetary policy stance portrayed in the annual ‘President's Address’ to the shareholders of the South African Reserve Bank (SARB). The review is subdivided into the main sub-periods of the tenures of the prominent ministers of finance and the governors of the Reserve Bank. The premise of the paper is that the different global and economic conditions, as well as the different personalities/styles, created periods of coherent and periods of conflicting modus operandi. A sub-theme is the growing importance of the South African Reserve Bank in economic policy decision-making during these periods. This paper focuses on the respective tenures, as president of the South African Reserve Bank, of Dr M. H. De Kock and his son, Dr G.P.C. De Kock. It is shown that conflicting views on direct or indirect monetary policy instruments, in particular, caused varying degrees of harmony during the Nationalist Regime.http://dx.doi.org/10.1080/20780389.2011.58640

Improved investment performance using the portfolio diversification index

The residual variance method is the traditional method for measuring portfolio diversification relative to a market index. Problems arise, however, when the market index itself is not appropriately diversified. A diversification measurement (Portfolio Diversification Index), free from market index influences, has been recently introduced. This article explores whether this index is a robust and 'good' diversification measure compared with the residual variance method. South African unit trusts are diversification-ranked using the two measures and the results compared to the ranking results of several risk performance measures. Measuring relative concentration levels allows concentration risk to be effectively managed, thereby filling a gap in the Basel accords (which omit concentration risk).http://reference.sabinet.co.za/webx/access/electronic_journals/jefs/jefs_v5_n1_a10.pd

The accountancy implications of commodity derivatives: a South African agricultural sector case study

Agricultural companies and commodity processors trade commodity derivatives on the SAFEX Commodity Derivatives market to hedge themselves and their producers against commodity price risk. Agricultural companies have to adhere to International Financial Reporting Standards (IFRS) of which International Accounting Standard (IAS) 39, Financial Instruments: Recognition and Measurement, forms part. The objective of the study was to establish a standard methodology for the interpretation of IAS 39 to serve as a benchmark and best practice for South African agricultural companies and commodity processors. The research found that there is no consistent interpretation or application of IAS 39 by the respondents. The recommended standard methodology to follow includes that agricultural companies holding grain inventory for trading should fair value such inventory and that the classification of transactions as derivative contracts, as defined per IAS 39, depends on whether hedge accounting is applied or not.http://dx.doi.org/10.1080/03031853.2012.749571http://www.tandfonline.com/doi/pdf/10.1080/03031853.2012.74957

Pricing weather derivatives for the chardonnay cultivar in Wellington using a credit default SWAP methodology

Official publication of the Agricultural Economics Association of South Africa (ARASA)Most South African farmers employ standard insurance to protect crops from natural disasters such as hail or strong winds, but no insurance contracts exist to compensate for rain damage (although floods are covered), or for temperature damage to relevant crops. Weather derivatives do exist, but are mostly available in foreign markets and used chiefly by energy companies. Some South African over-the-counter weather derivatives are available, but trading is rare. This paper establishes a pricing equation for weather derivatives specifically for use in the South African market. The methodology employed borrows heavily from the techniques used to price credit default swaps

Influence of yeast strain on Shiraz wine quality indicators

Abstract not availableHelen Holt, Daniel Cozzolino, Jane McCarthy, Caroline Abrahamse, Sylvester Holt, Mark Solomon, Paul Smith, Paul J. Chambers, Chris Curti