I have been following Clem Sunters’ call to action to the media regarding creating awareness of the Cape drought with some interest. Needless to say, with apparent lack of interest in the topic from the media, Clem took it upon himself to carry the flag with his series of "Drought Bulletins".
Being a Western Cape resident, I’ve tried to do my bit. I’ve started writing down readings on my water gauge, using swimming pool water for our toilets, filling a bucket in the shower with that first 60 seconds of cold water to use for washing dishes, showering for shorter times etc. I’ve brought our water use from 220 liters per person per day down to 130 - still way off the target of 90 liters. Clearly, I still have more work to do but it’s become clear to me that even these basic efforts are exactly that - an effort. It’s going to take some getting used to. I have chatted to work colleagues who are down to an amazing 60-80 litres per person but have discovered that a lot depends on how infrequently you are prepared to shower, wash your clothes or how frequently you are prepared to share showers and baths and how many hired staff you have in your household etc.
Since the business cycle recession that started in December 2013, and more recently the technical recession identified last quarter, we struggled like any household and continued to entertain at home but our circle of family/friends started bringing their own food/drinks as entertaining started becoming very expensive. Pretty soon we’re going to be asking people to bring their own 10L water bottles for toilet use, since from today there is a R5,000 to R10,000 fine if your household exceeds 20,000 liters per month! You may laugh about the toilets, but each flush is 9-12 liters depending on the size of your cistern and guaranteed it will be used at least twice per day, so of your 80L per day allowance 18-24 liters (22%- 30%) is taken up for the toilet!
I recently travelled to Johannesburg with my team for our second CryptoCurrency Bootcamp seminar for our high-net-worth clients. It was a standing joke with all of us how nice it was to stand under a hotel shower for longer than 5 minutes. Our next event in Johannesburg is in a few weeks and I’m looking forward to standing under that shower for 5 minutes again!
Anyhow, I have regularly been tracking CSAG’s Cape Town Airport rain tracker which shows just how screwed we are. We are the orange line on the bottom, tracking rainfall each year since 1977. We’re going to need a hail-Mary and a couple of #DikWednesday’s in the next 3 weeks which is very unlikely at this stage, and in all likelihood, are going to land up with dams 35% full after our rainy season.
The CSAG recently put out an excellent piece on "How severe is this drought, really?". Its excellent for purely methodological reasons. Being in quantitative finance, the statistical analysis methods used here resounded well with me. For the statistically or mathematically inclined its really worth a read. But for the rest of us, this is all you need to know:
Rainfall data analyzed since 1920 shows that:
- The 2017 rainfall is a 1-in-325 year event.
- The combined 2016/2017 rainfall is a 1-in-1,100 year event
I felt rather sick after reading that. And the long-term trend on that chart is very discomforting. It looks like a stock worth shorting, or the SA GDP growth trend if you ask me. It reminds me of the old joke "How did you get poor?" to which the answer was "Slowly at first and then all of a sudden". That’s exactly how I feel about this drought.
Our approach to water in the Western Cape is never going to be the same again. I hear that 1,500 new families are piling into the Western Cape each month. Demand is going up and not down. These low rainfall patterns coupled with emigration to the Cape are a new narrative we’re going to have to learn to live with. I never expected to see it in my lifetime but there you have it.
You can use the handy water use calculator provided on My Cape Town Needs to see how to be more effective with water use.
Dwaine van Vuuren
RecessionAlert, Sharenet Analytics
Dwaine van Vuuren is a full-time trader, global investor and stock-market researcher. His passion for numbers and keen research & analytic ability has helped grow RecessionALERT.com (US based) and PowerStocks Research (now Sharenet Analytics) into companies used by hundreds of hedge funds, brokerage firms, financial advisers and private investors around the world. An enthusiastic educator, he will have you trading and investing with confidence & discipline.