Moody’s drops Malema
The day after credit rating agency Moody’s downgraded South Africa to negative from stable the ANC Youth League’s corrupt leader Julius Malema is suspended. Moody’s cited South Africa’s political risk.
The South African Rand took a heavy knock on the Moody’s downgrade and it obviously became clear to the ruling ANC party that the problem for the political risk had to be removed.
The less-than-youthful looking 30-year-old Malema has been crossing swords with ANC leader and President of the country, Jacob Zuma, threatening to invade neighboring Botswana, nationalize farms and mines (even though he is a director of a mine company), and kill all white farmers. Malema also threatened to expose the financial antics of senior ANC members. Today the ANC suspended Malema for 5 years for “provoking divisions in the ruling part and bringing the organization into disrepute.” But there is little doubt that it was Moody’s that dealt Malema the death knell.
Malema owns a house worth $2 million, luxury cars and other expensive gadgets. Either he has been a financial wizard by making his monthly salary of less than $3,000 per month grow into many millions within a mere 2 years or he is guilty of corruption, fraud and bribery as the Hawks, the special ops unit of the South African police, allege. Malema is also on the international Genocide Watch watch list.
If Malema’s suspension from the ANC will mean the end of his political life only time will tell. Half of Africa’s leaders are unscrupulous and almost all of them are corrupt – and they seem to stay in power for years.
Moody’s made the move on Malema but they are not known to call things right all – or sometimes, any – of the time. To quote Comcast on Moody’s ratings on the zombie banks:
“The head of the US Congressional Financial Crisis Inquiry Commission said ‘flipping a coin would have been five times more accurate in making an investment decision than trusting Moody’s ratings of sub-prime backed securities before the credit crunch.'”
Malema will appeal the suspension, obviously. If he wins, Moody’s will most likely launch their own form of appeal.