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Thursday 05th of September 2019
 
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Macro Thoughts

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Will Deforestation and Warming Push the Amazon to a Tipping Point? @YaleE360
Africa


In an e360 interview, Carlos Nobre, Brazil’s leading expert on the
Amazon and climate change, discusses the key perils facing the world’s
largest rainforest, where a record number of fires are now raging, and
lays out what can be done to stave off a ruinous transformation of the
region.
In an interview with Yale Environment 360, Nobre, a senior researcher
at the University of Saõ Paulo’s Institute for Advanced Studies, talks
about an alarming tipping point now bearing down at which a
combination of deforestation and climate change would transform much
of the Amazon into a savanna ecosystem, with dire effects on the
world’s climate system
Carlos Nobre: Unfortunately, it’s getting worse because deforestation
rates have increased, but also because fires have increased very
rapidly in the last couple of months. Deforestation came down 75
percent from 2005 to 2014. Brazil was really going toward a
zero-deforestation policy, and then it started reverting back in 2015,
2016, 2017, and then bigger [deforestation] increments in 2018. Now,
2019 seems to be a peak. It’s very likely to be more than a 30 percent
deforestation increase from 2018 to 2019. And fires since January have
more than doubled in the Brazilian Amazon, compared to the same period
in 2018, so something is getting out of control.
“At the current rates of deforestation, we are 20 to 30 years off from
reaching this tipping point.”
Nobre: There have been many, many studies about what climate change,
deforestation, and increased vulnerability to forest fires might do to
the Amazon system as a whole. In fact, I published a paper about this
in Science in 1990 that said if we deforest parts of the Amazon, it
will become a savanna. The post-deforestation climate will no longer
be a very wet climate like the Amazon. It will become drier, it will
have a much longer dry season, like the long dry seasons in the
savannas in the tropics in Africa, South America, and Asia.
“The rates of removal of carbon dioxide from the atmosphere in the
Amazon vary between 1 billion and 2 billion tons a year.”
Two billion tons is 5 percent of all carbon dioxide from human
activities. On the other hand, because of deforestation and fires, the
Amazon is a source of 500 million to 700 million tons of carbon a
year. So if the deforestation continues, all that area is not acting
as a carbon sink anymore. So in the next 20 to 30 years, the Amazon
will become only a source of carbon.

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The Frontier from Xinjiang to Kashmir, from Gaza to Crimea from Hong Kong to Taiwan are c21st flash points.
Law & Politics


Of course, there are many other Frontiers, the Mediterranean Sea, the
Sahara desert, Islands because of the EEZ's they control.

One of protesters’ slogans is “five demands, not one less (五大訴求
缺一不可,” a message spreading on Telegram and LIHKG at this moment.
@ariahychen

https://twitter.com/ariahychen/status/1169142206285930497?s=20

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19-AUG-2019 :: It is not possible to Xinjiang Hong Kong, I think
Law & Politics


The Citizens in Hong Kong have been Virilian.
“Whoever controls the territory possesses it. Possession of territory
is not primarily about laws and contracts, but first and foremost a
matter of movement and circulation.”

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Is Hong Kong leader Carrie Lam distancing herself from Beijing with resignation remarks in closed-door meeting? SCMP News
Law & Politics


Analyst says leaked audio recording shows chief executive is already
desperate, and harsher measures from central government are in the
pipeline
Government source plays down incident, insisting that Lam is choosing
to stay on out of her own responsibility to Hong Kong

The watch on the table, Putin turning it around, the flickering light
on the ceiling, Modi ji tapping his hand on the table awkwardly.. So
ominous, all of it!From Geeta Mohan گیتا موہن गीता मोहन

https://twitter.com/zainabsikander/status/1169139729905999873?s=20

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It's amazing how @HouseofCommons returned the fire on @BorisJohnson so quickly, with 4 defeats in a row in just 24 hours. @hervegogo
Law & Politics


 It is now a very weak PM, after being lectured by Ken Clarke and
eviscerated by Corbyn. It’s amazing how @HouseofCommons returned the
fire on @BorisJohnson  so quickly, with 4 defeats in a row in just 24
hours. The prorogation was the provocation de trop.

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@BorisJohnson Takes on @UKParliament and Loses @NewYorker
Law & Politics


On Tuesday afternoon, hours before Prime Minister Boris Johnson lost a
historic vote in Parliament—one that may bring down his government and
force new elections in a matter of weeks—he was standing in the House
of Commons, plying a cardboard imitation of Winston Churchill. Members
of Parliament were trying to bring a bill to the floor which would
keep Johnson from heedlessly crashing the United Kingdom out of the
European Union without basic arrangements in place regarding travel
and trade and a host of other issues. He complained that they wanted
him to go to the E.U. and “beg,” “running up the white flag,” and that
their anti-no-deal bill would undermine his proposals, even though
there is no evidence that he has put any substantive proposals
forward. He called the legislation “Jeremy Corbyn’s surrender bill,” a
reference to the opposition Labour Party leader, even though it was
also supported by many members of Johnson’s own Conservative Party,
who, in doing so, were defying threats that they would be expelled
from the Party and face losing their seats. “I will never surrender!”
Johnson declared, as if the bravery were on his side, and not on
theirs. The act was not convincing. Johnson was jeered and booed.

The United Kingdom, at the moment, seems almost leaderless. Johnson
lost the vote on Tuesday by a margin of 328–301, with twenty-one Tory
M.P.s—including Nicholas Soames, who is Churchill’s grandson, and the
former Cabinet members Philip Hammond and Rory Stewart—voting against
him. The vote was a procedural one, meant to allow M.P.s to take
control of the Parliamentary agenda so that they can bring the
legislation forestalling a no-deal Brexit to a vote on Wednesday. (The
bill would do this by requiring the Prime Minister to ask the E.U. for
an extension to the Brexit deadline—which is currently October 31st—if
negotiations aren’t complete.) A moment after Tuesday’s vote tally was
announced, Johnson rose to say that he will move to force a snap
general election if he also loses the Wednesday vote. “I don’t want an
election,” he said, even as he seemed to grasp at the prospect of
effectively turning the complex debate on Brexit into a referendum on
him.

Rees-Mogg did not agree. “The most obvious understanding of the
ordinary use of the English language, which normally the honorable
lady is pretty good at, makes it quite clear that the two
statements”—that is, that the government was and was not planning a
prorogation—“are entirely compatible.” That rationale had to do with
Johnson’s argument that prorogation was not meant, as the statement
had put it, “to stop M.P.s debating Brexit” but rather to give the
government time to focus on its agenda—a lie folded into a lie.
Rees-Mogg heightened the effect of what another M.P., Dominic Grieve,
called his “rather cheap sarcasm” by sprawling on the benches at one
point in the debate, as though he were at a Roman banquet. Rees-Mogg
is, if nothing else, an apt partner for his Prime Minister. The logic
is fuzzy; the contempt is clear. That’s the Johnson way.

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Carney Can't See @bankofengland Intervening in Market to Calm Pound Swings @economics
Law & Politics


Bank of England Governor Mark Carney said there’s almost no chance of
the institution intervening in the foreign-exchange market to control
swings in the pound.
Asked at a Parliament hearing how fast sterling would have to drop
before the BOE would act, Carney noted the U.K. has a floating
currency that’s served the economy well. He added the bank would never
intervene for monetary policy reasons.
He pointed to the sharp moves in the pound after the vote to leave the
European Union in June 2016, saying the market worked well as
investors assessed the “new realities” for the economy and U.K.
assets.
“It was an orderly market,” he said. “There were high volumes, big
moves in sterling, but it moved to a level that was consistent, at
least at that point, with the market’s assessment of the new economic
realities. We don’t want to get in the way of that.”
Carney’s comments come as the U.K. suffers a political crisis. Prime
Minister Boris Johnson has lost his majority in Parliament as he
fights lawmakers trying to stop him leaving the EU without a deal.
Also on Wednesday, the BOE published updated figures for its
assessment of no-deal Brexit scenarios. It said preparations this year
mean less damage to the economy, though the fallout will still be
considerable. The drop in GDP from peak to trough is now seen at 5.5%,
compared with 8% seen last November.
The only situation where the BOE might have to consider such dramatic
action as currency intervention would be a breakdown in the market,
where low volumes, price gaps and dysfunction in trading took place.
But Carney said that’s a very unlikely scenario.
“It would only be in the most extreme circumstances with respect to
market functioning that we could contemplate any activity,” he said.
The pound dropped below $1.20 earlier this week to the weakest since
2017. It has since recovered to above $1.21 as investors bet that the
government’s political struggles reduce the risk of a no-deal Brexit.
“I can’t see a circumstance that we’d intervene either for market
functioning purposes -- never say never on that -- but I would say on
a personal basis at least never for monetary policy purposes,” Carney
said.

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Currency Markets at a Glance WSJ
World Currencies


Euro 1.1032
Dollar Index 98.362
Japan Yen 106.533
Swiss Franc 0.9829
Pound 1.2277
Aussie 0.6813
India Rupee 71.855
South Korea Won 1199.50
Brazil Real 4.0950
Egypt Pound 16.53
South Africa Rand 14.7755

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Crude Oil 6 Month Chart INO 55.88
Commodities


Emerging Markets

Frontier Markets

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@CyrilRamaphosa is missing in action. - Pieter du Toit @News24
Africa


Where is President Cyril Ramaphosa? South Africa is being paralysed by
economic indecision and ANC infighting, while Johannesburg and
Pretoria burn and the assault on women continues. We have a head of
state who is missing in action, writes Pieter du Toit.
President Cyril Ramaphosa is missing in action.
Even some of his own people, individuals who played a key role in
helping him getting elected with the promise of a "new dawn", are
voicing their frustration with a president who is seemingly reluctant
to lead.
"He does not want to be the protagonist, he wants to react to
situations. Ramaphosa doesn’t want to be the one under whose watch the
ANC disintegrates," one of these "new dawn" lieutenants told me
recently.
South Africa is becoming unmoored and unhinged. The orgy of violence
that erupted on Monday is the direct result of a government and state
unable to prevent or predict socio-economic unrest and a national
executive failing in the most basic tasks of responsible governance
and ensuring order and justice.
Why is Ramaphosa so very timid, so incredibly reluctant to take a
stand, and why is he so far removed from public life?
In Anthony Butler’s magisterial biography of Ramaphosa, one of the
president’s closest associates, James Motlatsi, tells of a battle to
evict a group of mineworkers from NUM’s headquarters in downtown
Johannesburg in the 1980s.
Missing in action
After Ramaphosa was unable to persuade and cajole the occupiers from
the building, Motlatsi drew a line in the sand and said it was time to
use force. Ramaphosa disagreed and left the scene. Motlatsi, along
with some other heavies, split heads and spilt blood, but eventually
cleared the building.
"Where there was a faction fight Cyril would be lost… [whereas] I knew
from my experience of dealing with a violent mob that persuasion could
not work. They were disruptive, they were paralysing the
organisation," Motlatsi told Butler.
Ramaphosa is clearly unable to deal with the mob occupying Luthuli
House. The Ace Magashule faction, bolstered by Nomvula Mokonyane,
Bathabile Dlamini and Malusi Gigaba, and ably supported by people such
as Jessie Duarte, are running the show.
Retreating to the Union Buildings, he is unable to effectively use his
powers as head of state to implement and enforce the changes necessary
to ensure recovery. National interest is trumped by the interests of
the party.
And when a day like yesterday explodes, with blood in the streets of
Johannesburg and another violent femicide in Cape Town, he is unable
to respond to the national mood and take charge, even if it is
symbolic and even if it is for a day.

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At 1545 GMT the rand was 1.91% firmer at 14.8025 per dollar, its firmest level since Aug. 6, extending the previous session's rally. @ReutersAfrica
Africa


Gross domestic product in the three months to June expanded by 3.1%,
after a 3.1% contraction in the first quarter. Economists polled by
Reuters had forecast an expansion of 2.4% for the quarter.
[nL5N25U2A0]
The positive growth data helped soothe sentiment battered by recent
signs of weak activity and concerns that an additional 59 billion rand
($3.9 billion) for state power firm Eskom had made a credit downgrade
a near-certainty.
President Cyril Ramaphosa told officials and business leaders on
Wednesday that he was committed to quelling attacks on foreigners that
have threatened to cast a cloud over an economic forum aimed at
boosting intra-African trade.[nL5N25V3KA]
Police have arrested almost 300 people and confirmed at least five
deaths after riots in Johannesburg and the capital Pretoria in recent
days, when roving groups attacked shops mainly owned by migrants from
the rest of Africa.
On the bourse, the broader All-share index rose 0.3% to 54,907 points,
while the blue chip Top-40 closed 0.32% up to 49,031 points.
Leading the blue chips was e-commerce giant Naspers, up 2.69% to
3594.00 rand after gains in Hong Kong stocks boosted Tencent, in which
Naspers has a stake. [nL3N25V0NC]
“Naspers is such a big component of the JSE and its sibling child
Tencent is listed in Hong Kong...People think the worst of the
protests in Hong Kong are over. That lifted all the stocks really,”
said Greg Davies, a trader at Cratos Capital.
Further gains were restrained by the bullion sector, down 5.09%, with
Sibanye-Stillwater down 4.94% to 19.44 and AngloGold Ashanti 5.09%
lower at 334.91%.
Bonds also firmed, with the yield of the benchmark paper due in 2026
down 5 basis points to 8.095%.

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80% of the guys that attempted to loot Shoprite today do not care about what's happening in SA. @oladayo01
Africa


People are unemployed, hungry and frustrated and will exploit any
opportunity to vent. That is the time bomb we sit on in Nigeria. If
you think we are safe in Lekki, think again

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18-FEB-2019 :: Unemployment has risen from 8.2% to 23.1% under President Buhari's watch which would be a plain untenable position for any incumbent Politician seeking re-election in most parts of the World.
Africa


It’s a Nollywood Level drama but permit me to give you some context.
GDP growth has lagged Population growth, GDP grew by 1.93 percent last
year, up from 0.82 percent in 2017 and grew 2.4 percent in the fourth
quarter. Nigeria was the second biggest economy in Africa in 2018,
using the market exchange rate of NGN362/$ or the biggest economy
using the fixed rate [@RencapMan]. Unemployment has risen from 8.2% to
23.1% under President Buhari's watch which would be a plain untenable
position for any incumbent Politician seeking re-election in most
parts of the World. The President is a victim of low oil prices which
provide 70% of government revenue. ''Baba Go Slow'' has to be
contrasted with President Al-Sisi's Egypt. Al-Sisi [and I for one
disagree with him on many things particularly with his
''incarceration'' strategy] made bold moves when it came to the
Economy. Egypt devalued its currency early, took a brutal punch in the
solar plexus but is now reaping the dividend from its bolder economic
policy, Nigeria is still muddling along with its ''Voodoo'' level FX
economics. Since President Buhari came to power in May 2015, Nigeria's
stock market has fallen more than any other in the world, dropping 50%
in dollar terms. There is a Message in that performance. The Stock
Market has perked up over the last few sessions, however.

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What else is common to Africa's 2 biggest economies? Four years of shrinking GDP in per capita terms @RencapMan
Africa


Recent days have seen South African mobs looting foreign owned stores
(with a focus against Nigerians), and now Nigerian mobs looting South
African stores (and others I'm told).  What else is common to Africa's
2 biggest economies? Four years of shrinking GDP in per capita terms

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.@Total SA has suspended its planned $3.5 billion crude export pipeline from Uganda to Tanzania after the collapse of a deal to buy a stake in @TullowOilplc's oil fields in Uganda @markets
Africa


Total SA has suspended its planned $3.5 billion crude export pipeline
from Uganda to Tanzania after the collapse of a deal to buy a stake in
Tullow Oil Plc’s oil fields in Uganda. The French oil major has
terminated all activities related to the 1,445-kilometer (898-mile)
conduit from its oil fields in Uganda to Tanga in Tanzania because
shared ownership in the project was to be determined upon the
completion of the Tullow deal, an official familiar with the project
at Total’s Ugandan office said.
Last week, Tullow Oil was forced to abandon plans to sell a stake in
its Ugandan project to Total and China’s Cnooc Ltd. and restart the
process from scratch after tax negotiations stymied the deal. The
termination of the agreement was a blow to Tullow, which had sought
partners to help it develop about 1.5 billion barrels of recoverable
oil in its Ugandan fields. Total E&P Uganda, which was leading the
pipeline project, dismissed employees who were set to undertake works
on it, the official said. The explorer was involved in initial land
acquisition in both countries, the official said  Cnooc Uganda Ltd.,
which is jointly developing the country’s crude finds, suspended at
least 12 employees following delays on the project, a company official
familiar with the matter said by phone without providing further
details. Total did not immediately respond to a request for comment.

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Markit @StanbicKE Purchasing Managers' Index (PMI) for manufacturing and services fell to 52.9 from 54.1 in July @Reuters
Kenyan Economy


Kenya’s private sector activity dropped in August to its lowest level
since May, with cashflow problems hurting performance, a survey showed
on Wednesday.
The Markit Stanbic Bank Kenya Purchasing Managers’ Index (PMI) for
manufacturing and services fell to 52.9 from 54.1 in July. Any reading
above 50 indicates growth. In May, the index stood at 51.3.
The survey showed that activity was affected by cashflow problems,
partly arising from a backlog of bills from government departments.
“To ensure inclusivity in economic growth, urgent reforms ought to be
conducted on improving accessibility to credit for companies, in
addition to a consistent plan by the government to clear arrears owed
to the private sector,” said Jibran Qureishi, regional economist for
East Africa at Stanbic Bank.
In June, the finance ministry said the government would make it a
priority to pay 10.9 billion shillings ($106 million) owed to its
suppliers by the end of that month.
Firms complain that the government takes years to settle bills for
goods and services supplied to it, mainly due to widespread
corruption.
Experts have blamed the delayed payments for causing a jump in bad
debts in the banking sector.
The survey showed that a credit squeeze due to a cap on commercial
lending rates, in place since late 2016, had also worsened conditions.
The finance ministry proposed to parliament in June that it repeal the
cap on lending rates. A similar proposal was shot down in 2018.
In March, a court ruled that the rate cap was unconstitutional, but
judges suspended the ruling for 12 months to allow parliament to
re-examine the law.
“In fact, the interest-rate-capping law continues to strangle the
private sector and if the law remains in place in its current form, it
will only add to the plight of the private sector,” Qureishi said.

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by Aly Khan Satchu (www.rich.co.ke)
 
 
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September 2019
 
 
 
 
 
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