It has been a good week for Governance. I just received a news alert that the Director General of the Securities has been removed, the market moved up 200 points during the day, before closing a 178 points up.
Many players in the market including some big fish have reportedly been pushing for the removal of the DG on the basis that the SEC was responsible for the recent decline in the market. How so? By imposing unnecessary regulation, including the necessity of payment for purchases three days after the transaction. What the players wanted was less regulation and, above all, credit. Credit! Credit in unlimited quantities. Credit makes the world go round and if no further restrictions are placed, the market is set for a heady, debt fueled ride.
Unfortunately the announcement is only that the DG is being transferred, there was no mention of any change in the rules. Perhaps these will follow? If it does not, then there will be some very disappointed people, more painful declines and another outcry for credit. The last time the players wanted credit, the SEC did approve it, but it took the market a week to work out that the amount was too little. Part of the problem is that the people don't know exactly what they ask for and may not really know what they are getting until it hits them.
This follows just days after news leaked out of a bill to vest underperforming assets with the state. Drafted by a private law firm and sent for review by the Supreme Court as an urgent bill (more details here), it is set to be approved next Wednesday.
People have sometimes accused the islanders of leading slothful and indolent lives, fast service is quite uncharacteristic. Parliament, however is setting the right example with legislation being made with the speed that MacDonald's reserves for its burgers. In contrast, the Mother of Parliaments serves a leisurely four course dinner consisting of green/white papers, draft bills, pre-legislative scrutiny before the final bill is taken up for debate. Here we just have the preprocessed burger, all ready for deep frying in cheap oil with a side order of chips.
Light regulation is best, no regulation better still. Half of Mexico no longer requires driving tests. In the 1990's driving tests were difficult and a bribe was often necessary to pass. Instead of tackling the corruption, they abolished the tests.
Six out of ten road deaths worldwide take place in just 12 countries, one of which is Mexico, but critics claim these statistics are wrong. Given the size of its population, Mexico they say, is no more unsafe than anywhere else. They claim that the absence of tests actually makes driving safer, since the drivers learn to expect the unexpected. We too can do the same.
Addendum: 4th November 2011
The Daily News has finally deigned to report on the bill to vest assets with the state, a full week after news of the extent of the bill began to trickle out (and about two weeks after rumours began to circulate). "Decision prompted by poor management, corruption etc" read the banner below the headline, "No hurry to pass Act" read another. Quite.
I have noticed a pattern, matters that closely involve the rulers are almost never reported in the State owned press, at some point when it does make its way its usually couched as a rebuttal or denial. Where did we see that last???? Hmmm that little matter of the beggars? See also here.
Addendum 2 4th November, 4pm
It now appears that the Sevanagala sugar factory has been stormed and the management thrown out.