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Satchu's Rich Wrap-Up
 
 
Friday 20th of December 2019
 
Morning
Africa

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Macro Thoughts

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Venise connait la pire - acqua alta - ( maree haute ) de son histoire depuis la terrible acqua granda du 4 novembre 1966, qui avait cause a la ville nombre de dommages irreparables @lemondefr
Africa


#Venise knows the worst "acqua alta" ("high tide") of its history
since the terrible acqua granda of November 4, 1966, which had caused
the city number of irreparable damage

Conclusions


The Tide is high The End is nigh

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Wasini Island
Africa


Wasini Island lies in southeast Kenya 3 kilometres (1.9 mi) off the
coast of the Indian Ocean, 75 kilometres (47 mi) south of Mombasa, and
3 kilometres (1.9 mi) opposite the harbour of the village Shimoni.
The island has a population of about 3.000 living at the South coast
in the two villages Wasini and Mkwiro, respectively at the west and
east side of the island, and inland in the hamlet Nyuma Maji, which
means in Swahili 'behind the water'.[2] In Wasini-village and Nyuma
Maji live the Bantu people the Vumba, whose mother tongue is the
Swahili dialect kivumba; in Mwkiro the Kifundi (Shirazi) have their
own mother tongue, the Swahili dialect kikifundi. Besides that they
all speak Swahili and sometimes English. The Vumba are of Arabic
origin, may be a little bit mixed with the Chinese. The Arabs came to
the East-African coast in the 1st century A.D. and after mixing with
the Bantu people they together formed the Coast or Swahili people. The
Shirazi probably came from the Persian Gulf in the 15th century A.D.
Between the island and the Tanzanian islands Pemba and Zanzibar
south-east of the island in the Indian Ocean consist strong cultural
connections and family ties. The population is for about 99% Muslim,
from liberal to orthodox. (See note 1).

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Gabriel Garcia Marquez Love in the Time of Cholera
Africa


“To him she seemed so beautiful, so seductive, so different from
ordinary people, that he could not understand why no one was as
disturbed as he by the clicking of her heels on the paving stones, why
no one else's heart was wild with the breeze stirred by the sighs of
her veils, why everyone did not go mad with the movements of her
braid, the flight of her hands, the gold of her laughter. He had not
missed a single one of her gestures, not one of the indications of her
character, but he did not dare approach her for fear of destroying the
spell.”
― Gabriel García Márquez, Love in the Time of Cholera

Political Reflections

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THE PRIVACY PROJECT Twelve Million Phones, One Dataset, Zero Privacy @nytimes
Law & Politics


EVERY MINUTE OF EVERY DAY, everywhere on the planet, dozens of
companies — largely unregulated, little scrutinized — are logging the
movements of tens of millions of people with mobile phones and storing
the information in gigantic data files.
The Times Privacy Project obtained one such file, by far the largest
and most sensitive ever to be reviewed by journalists.
It holds more than 50 billion location pings from the phones of more
than 12 million Americans as they moved through several major cities,
including Washington, New York, San Francisco and Los Angeles.
Each piece of information in this file represents the precise location
of a single smartphone over a period of several months in 2016 and
2017. The data was provided to Times Opinion by sources who asked to
remain anonymous because they were not authorized to share it and
could face severe penalties for doing so.
The sources of the information said they had grown alarmed about how
it might be abused and urgently wanted to inform the public and
lawmakers.
After spending months sifting through the data, tracking the movements
of people across the country and speaking with dozens of data
companies, technologists, lawyers and academics who study this field,
we feel the same sense of alarm.
In the cities that the data file covers, it tracks people from nearly
every neighborhood and block, whether they live in mobile homes in
Alexandria, Va., or luxury towers in Manhattan.
One search turned up more than a dozen people visiting the Playboy
Mansion, some overnight. Without much effort we spotted visitors to
the estates of Johnny Depp, Tiger Woods and Arnold Schwarzenegger,
connecting the devices’ owners to the residences indefinitely.
If you lived in one of the cities the dataset covers and use apps that
share your location — anything from weather apps to local news apps to
coupon savers — you could be in there, too.
If you could see the full trove, you might never use your phone the
same way again.
THE DATA REVIEWED BY TIMES OPINION didn’t come from a telecom or giant
tech company, nor did it come from a governmental surveillance
operation. It originated from a location data company, one of dozens
quietly collecting precise movements using software slipped onto
mobile phone apps.
You’ve probably never heard of most of the companies — and yet to
anyone who has access to this data, your life is an open book. They
can see the places you go every moment of the day, whom you meet with
or spend the night with, where you pray, whether you visit a methadone
clinic, a psychiatrist’s office or a massage parlor.
THE COMPANIES THAT COLLECT all this information on your movements
justify their business on the basis of three claims: People consent to
be tracked, the data is anonymous and the data is secure.
None of those claims hold up, based on the file we’ve obtained and our
review of company practices.
Yes, the location data contains billions of data points with no
identifiable information like names or email addresses. But it’s
child’s play to connect real names to the dots that appear on the
maps.
Connecting a sanitized ping to an actual human in time and place could
feel like reading someone else’s diary.
Location data is transmitted from your phone via software development
kits, or S.D.Ks. as they’re known in the trade. The kits are small
programs that can be used to build features within an app.
They make it easy for app developers to simply include
location-tracking features, a useful component of services like
weather apps.
Because they’re so useful and easy to use, S.D.K.s are embedded in
thousands of apps. Facebook, Google and Amazon, for example, have
extremely popular S.D.K.s that allow smaller apps to connect to bigger
companies’ ad platforms or help provide web traffic analytics or
payment infrastructure.
But they could also sit on an app and collect location data while
providing no real service back to the app. Location companies may pay
the apps to be included — collecting valuable data that can be
monetized.
“If you have an S.D.K. that’s frequently collecting location data, it
is more than likely being resold across the industry,” said Nick Hall,
chief executive of the data marketplace company VenPath.
For brands, following someone’s precise movements is key to
understanding the “customer journey” — every step of the process from
seeing an ad to buying a product.
It’s the Holy Grail of advertising, one marketer said, the complete
picture that connects all of our interests and online activity with
our real-world actions.
Once they have the complete customer journey, companies know a lot
about what we want, what we buy and what made us buy it.
Other groups have begun to find ways to use it too. Political
campaigns could analyze the interests and demographics of rally
attendees and use that information to shape their messages to try to
manipulate particular groups. Governments around the world could have
a new tool to identify protestors.
Pointillist location data also has some clear benefits to society.
Researchers can use the raw data to provide key insights for
transportation studies and government planners.
The City Council of Portland, Ore., unanimously approved a deal to
study traffic and transit by monitoring millions of cellphones. Unicef
announced a plan to use aggregated mobile location data to study
epidemics, natural disasters and demographics.
For individual consumers, the value of constant tracking is less
tangible. And the lack of transparency from the advertising and tech
industries raises still more concerns.
Does a coupon app need to sell second-by-second location data to other
companies to be profitable? Does that really justify allowing
companies to track millions and potentially expose our private lives?
Data companies say users consent to tracking when they agree to share
their location. But those consent screens rarely make clear how the
data is being packaged and sold. If companies were clearer about what
they were doing with the data, would anyone agree to share it?
What about data collected years ago, before hacks and leaks made
privacy a forefront issue? Should it still be used, or should it be
deleted for good?
If it’s possible that data stored securely today can easily be hacked,
leaked or stolen, is this kind of data worth that risk?
Is all of this surveillance and risk worth it merely so that we can be
served slightly more relevant ads? Or so that hedge fund managers can
get richer?
The companies profiting from our every move can’t be expected to
voluntarily limit their practices. Congress has to step in to protect
Americans’ needs as consumers and rights as citizens.
Until then, one thing is certain: We are living in the world’s most
advanced surveillance system. This system wasn’t created deliberately.
It was built through the interplay of technological advance and the
profit motive.
It was built to make money. The greatest trick technology companies
ever played was persuading society to surveil itself.

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A Global Anarchy Revival Could Outdo the 1960s @bopinion
Law & Politics


India has exploded into protests against a citizenship law that
explicitly discriminates against its 200 million-strong Muslim
population.
Narendra Modi’s Hindu nationalist government has responded with police
firing on demonstrators and assaults on university campuses.
The global wildfire of street protests, from Sudan to Chile, Lebanon
to Hong Kong, has finally reached the country whose 1.3 billion
population is mostly below the age of 25. The social, political, and
economic implications couldn’t be more serious.
It was only last month that students on the campus of Hong Kong
Polytechnic University were throwing petrol bombs at the police, and
fielding, in turn, teargas, rubber bullets and water cannons.
This violent resistance to an authoritarian state is novel to Hong
Kong. The Umbrella Movement that in 2014 first expressed a mass
sentiment for greater autonomy from Beijing was strikingly peaceful.
The campaigners for democracy in Hong Kong today have also traveled
very far away from the Chinese students who occupied Tiananmen Square
in 1989, and to whom they have been wrongly compared.
Those students back in 1989 were deeply respectful of their state:
Photographs of student petitioners kneeling on the steps of the Great
Hall of the People are no less eloquent than the iconic picture of a
protester facing a tank.
That acknowledgement of the state’s authority as ultimate arbiter is
now rapidly disappearing, in not only Hong Kong, but also India and
many other countries. It is being replaced by the conviction that the
state has lost its legitimacy through cruel and malign actions.
Today’s protesters, who are overwhelmingly young, are usefully
compared to the French student demonstrators in Paris in 1968. The
latter occupied places of work and study, streets and squares. They
also met police crackdowns with makeshift barricades and Molotov
cocktails.
Like today’s protesters, the French students erupted into violence
amid a global escalation of street-fighting; they claimed to reject an
older generation’s values and outlook. And they, too, couldn't be
simply classified as left-wing, right-wing or centrists.
Indeed, the French radicals confused many people at the time because
they loathed the French communist party almost as much as they did the
parties of the right. The French communists, in turn, dismissed the
protesting students as “anarchist.”
This commonplace pejorative confuses anarchism with disorganization.
It should be remembered that anarchist politics is one of the modern
world’s oldest, if little remembered, political and intellectual
traditions. Today, it best describes the radical new turn to protests
worldwide.
Anarchist politics began to emerge from the mid-19th century onward,
originally in societies where ruthless autocrats were in power —
France, Russia, Italy, Spain, even China — and where hopes of change
through the ballot box seemed wholly unrealistic.
The anarchists — one of whom assassinated U.S. President McKinley in
1901 — sought freedom from what they saw as increasingly exploitative
modes of economic production.
But, unlike socialist critics of industrial capitalism, they aimed
most of their energies at liberation from what they saw as tyrannical
forms of collective organization — namely, the state and its
bureaucracy, which in their view could be communist as well as
capitalist.
As Pierre-Joseph Proudhon, the pioneering thinker of anarchism (and
robust critic of Marx), put it,
“To be GOVERNED is to be kept in sight, inspected, spied upon,
directed, law-driven, numbered, enrolled, indoctrinated, preached at,
controlled, estimated, valued, censured, commanded, by creatures who
have neither the right, nor the wisdom, nor the virtue to do so.”
For many anarchists, the state, the bureaucracy and security forces
were the deepest affront to human dignity and liberty.
They sought to achieve democratic freedoms by a drastic reduction in
the power of the hydra-headed state, and a simultaneous
intensification of the power of individuals from below through
coordinated action.
Democracy for the anarchists was not a distant goal, to be reached
through vertically integrated political parties, impersonal
institutions and long electoral processes.
It was an existential experience, instantly available to individuals
by jointly defying oppressive authority and hierarchy.
They saw democracy as a permanent state of revolt against the
over-centralized state and its representatives and enforcers,
including bureaucrats and the police.
Success in this endeavor was measured by the scale and intensity of
the revolt, and the strength of solidarity achieved, rather than by
any (always unlikely) concession from the despised authorities.
This is also how protesters today seem to perceive democracy as they
struggle, without much hope of any conventional victory, against
governments that are as ideologically driven as they are ruthless.
Let there be no doubt: More open and unresolvable conflicts between
ordinary citizens and authorities are likely to become the global norm
rather than the exception.
Certainly, militant disaffection today is not only more extensive than
it was in the late 1960s. It also connotes a deeper political
breakdown.
Negotiations and compromise between different pressure groups and
interests that have defined political society for ages suddenly seem
quaint.
Old-style political parties and movements are in disarray; societies,
more polarized than ever before; and the young have never faced a more
uncertain future.
As angry, leaderless individuals revolt against increasingly
authoritarian states and bureaucracies from Santiago to New Delhi,
anarchist politics seems an idea whose time has come.

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if you are in Kashmir which was described by Nehru as "the snowy bosom of the Himalayas" and which is currently switched off from the c21st.
Law & Politics


The Point is that the Smart Phone is ubiquitous even in the furthest
corners of the World and we are all peering at a newsreel. Except, of
course, if you are in Kashmir which was described by Nehru as “the
snowy bosom of the Himalayas”  and which is currently switched off
from the c21st.
Prime Minister Narendra Modi revoked  Article 370, which protected
Kashmir’s demography by restricting residency to Kashmiris alone and,
under a sub-section known as Article 35A, forbade the sale of property
to non-Kashmiris.
Essentially, Modi is seeking to flood the zone. The Periphery is a
Tinderbox in many parts of the World.

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02-DEC-2019 :: Economic growth has now fallen for six consecutive quarters
Law & Politics


The GDP figure is the weakest recorded under Prime Minister Narendra
Modi, who first swept to power five years ago promising to take
India’s economy to new heights and create millions of jobs every year.

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Protesters in Arab world's newest uprisings face a long haul @AP
Law & Politics


bbas Ali spends most of his free time camped out in Tahrir Square —
the epicenter of Iraq’s anti-government protests — going home only at
3 a.m. to catch few hours of sleep, change his clothes and check on
his family.
He is determined to stay in the square until the end, whatever that may be.
Ali was only 13 when the U.S.-led invasion toppled Saddam Hussein. He
only vaguely remembers life under the dictator.
What he knows clearly is that life in post-Saddam Iraq is a daily,
often humiliating struggle for survival.
The 29-year-old considers himself lucky to have a job, although the
pay barely covers medical bills for his ailing father and elderly
mother.
His two brothers and sister are unemployed. So are most of his
friends. He says marriage is the furthest thing from his mind since he
couldn’t possibly afford to start a family.
Angry at factional, sectarian politicians and clerics he blames for
stealing Iraq’s wealth, Ali embodies the young Iraqis in Baghdad who
for more than two months have waged a revolt calling for the downfall
of a hated political class.
A similar scene is taking place in tiny Lebanon, where for 62 days
now, young people have protested the political elite in charge since
the 1975-90 civil war, blaming them for pillaging the country to the
point of bankruptcy.
The sustained, leaderless protests are unprecedented and have managed
to bring down the governments of both countries. But they have been
unable to topple their ruling systems:
The same politicians have kept their hold, wrangling and stalling over
forming new governments and ignoring the broader calls for radical
reform.
The standoff gets more dangerous as it draws out, posing the most
serious existential threat in years — in Iraq since Saddam’s 2003
ouster and in Lebanon since the civil war’s end.
Iraq has been plunged into yet another cycle of violence with more
than 450 protesters killed by security forces. Lebanon is on the verge
of chaos, with a looming economic disaster.
The protests reflect a broader malaise playing out across much of the
Arab world. As the Middle East ushers in 2020, experts say a new kind
of uprising is unfolding.
While the 2011 Arab Spring uprisings that took place in Egypt,
Tunisia, Libya and Syria were directed at long-ruling autocrats, the
current economically driven uprisings are directed at an entire class
of politicians and a system they say is broken and has failed to
provide a decent life.
In Iran, economic discontent has worsened since President Donald Trump
imposed crushing sanctions last year.
The U.N. says more than 200 people were killed by security forces
shooting at protesters in recent weeks after the government raised
gasoline prices.
In Egypt, there have been scattered outbursts of street protests
despite draconian measures imposed under President Abdel-Fattah
el-Sissi. Jordan, Algeria and Sudan are all witnessing similar
protests.
“The politicians’ corruption has stolen and ruined the future of our
youth,” reads a huge banner in Baghdad’s Tahrir Square. It’s a
sentiment that sums up the feeling across Iraq and Lebanon.
Both countries have a power-sharing agreement that allocates top posts
according to religious sect and has turned former warlords into a
permanent political class that trades favors for votes.
The level of dysfunction and failing services in both countries is
staggering, with garbage left uncollected, chronic cuts in electricity
and systemic corruption and nepotism.
He says he feels sick every time he turns on the TV and sees Iraqi
leaders speak.
“Mako watan,” he said, a colloquial expression for “this is not a country.”
Samar Maalouly, a 32-year-old Lebanese protester, calls her country’s
politicians “monsters.”
“What I’d like to know is, don’t they ever have enough?” she said
during a recent demonstration in downtown Beirut.
Paul Salem, president of the Washington-based Middle East Institute,
summed up the painful standoff.
“On the one hand stands a young generation demanding good governance,
an end to corruption, and socio-economic progress and justice; on the
other sits a corrupt and sectarian political class — backed in key
ways by Iran — that doesn’t want to give up any of its positions or
riches,” he wrote in an analysis last week.
The protests in Iraq and Lebanon are unique in that for the first
time, people from all sects and social classes are transcending
divisions to hold their leaders to account.
They are desperate to hang on to this gain. Graffiti in Baghdad and
Beirut urges an end to the sectarian power-sharing system. In
conservative Iraq, women are for the first time openly taking part in
the protests.
Politicians are betting on the passage of time and internal disputes
to destroy the protest movement. In Iraq, a series of attacks by
unknown assailants including stabbings, assassinations and kidnappings
have fostered fear among demonstrators. Lebanon’s largely peaceful
rallies are degenerating into violence.
Protesters face a conundrum: By persisting with street action, they
risk angering those in the wider populace eager for stability and a
return to normal life.
Some say the demands are simply too radical to be implemented. But if
they stop, they risk losing this moment of unity against their rulers.
Protesters insist what they’re planting now are the long-awaited seeds
of change.
But analysts say it’s a long haul.
“Corruption is ingrained at every level, and it’s something that if
you wanted to fix, you basically have to take the entire elite class
and throw it out of the country. And while people may want to do that,
how do you do that without just incredible violence?” said Trenton
Schoenborn, an author with the International Review, an online
publication dedicated to global analysis.
Ali, the Iraqi protester, says he and his comrades have come too far
to stop now.
“This is a one-way street,” he said. “It’s either us or them. If they
win this time, it’s over.”

read more


In this Nov. 4, 2019 file photo, anti-government protesters set fire while security forces fire live ammunition and tear gas in Baghdad, Iraq @AP
Law & Politics


As the Middle East ushers in 2020, a new kind of uprising is unfolding
in the Arab world. While the 2011 Arab Spring uprisings that took
place in Egypt, Tunisia, Libya and Syria were directed at long-ruling
autocrats, the current economically driven uprisings are directed at
corrupt political elites who have failed at providing their people
with basic services. (AP Photo/Hadi Mizban, File)

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21-OCT-2019 :: "The revolutionary contingent attains its ideal form not in the place of production, but in the street, where for a moment it stops being a cog in the technical machine and itself becomes a motor (machine of attack)"
Law & Politics


“The revolutionary contingent attains its ideal form not in the place
of production, but in the street, where for a moment it stops being a
cog in the technical machine and itself becomes a motor (machine of
attack), in other words, a producer of speed.’’

International Markets

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24-JUN-2019 :: Wizard of Oz World
International Trade


This is ‘’Voodoo Economics’’ and just because we have not reached the
point when the curtain was lifted in the Wizard of Oz and the Wizard
revealed to be ‘’an ordinary conman from Omaha who has been using
elaborate magic tricks and props to make himself seem “great and
powerful”’’ should not lull us into a false sense of security.

read more


Ghosts of rate cycles past: @RaoulGMI
International Trade


Ive been following this for a while...the post-3 cut pullback in
Eurodollars in 2001 vs the post-3 cuts now. Its a stunning fit

read more


Currency Markets at a Glance WSJ
World Currencies


Euro 1.1116
Dollar Index 97.426
Japan Yen 109.28
Swiss Franc 0.9789
Pound 1.3024
Aussie 0.6887
India Rupee 71.1655
South Korea Won 1161.735
Brazil Real 4.0705
Egypt Pound 16.0473
South Africa Rand 14.26

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GS on NFLX: "We continue to believe that consensus expectations for Netflix subscriber growth and related financials in 2020 and beyond are too low" @Themarketear
World Currencies


cont: "As pricing stabilizes, competitive concerns prove overblown,
growth continues to benefit from investments in content, and cash flow
turns positive, we expect shares of NFLX to continue to outperform. We
remain Buy-rated (CL) with a $400, 12-mo price target"

read more



23-SEP-2019 :: Streaming Dreams Non-Linearity Netflix
World Currencies


My Mind kept to an Article I read in 2012 ‘’Annals of Technology
Streaming Dreams’’ by John Seabrook January 16, 2012.
“People went from broad to narrow,” he said, “and we think they will
continue to go that way—spend more and more time in the niches—
because now the distribution lands-cape allows for more narrowness’’.
Netflix faces an onslaught of competition in the market it invented.
After years of false starts, Apple is planning to launch a streaming
service in November, as is Disney — with AT&T’s WarnerMedia and Com-
cast’s NBCUniversal to follow early next year.
Netflix has corrected brutally and lots of folks are bailing big time
especially after Netflix lost US subscribers in the last quarter.
Even after the loss of subscribers in the second quarter, Ben
Swinburne, head of media research at Morgan Stanley, says Netflix is
still on course for a record year of subscriber additions.
Optimists point to the group’s global reach. It is betting its future
on expansion outside the US, where it has already attracted 60m
subscribers.
Netflix is not a US business, it is a global business. The Majority of
Analysts are in the US and in my opinion, these same Analysts have an
international ‘’blind spot’’
Once Investors appreciate that the Story is an international one and
not a US one anymore, we will see the price ramp to fresh all-time
highs.

read more









The Crypto Avocado Millenial Economy
Commodities


The ‘’Zeitgeist’’ of a time is its defining spirit or its mood.
Capturing the ‘’zeitgeist’’ of the Now is not an easy thing because we
are living in a dizzyingly fluid moment.

Emerging Markets

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Halcyon Days From Latin Alcyone, daughter of Aeolus and wife of Ceyx. When her husband died in a shipwreck, Alcyone threw herself into the sea whereupon the gods transformed them both into halcyon birds (kingfishers).
Emerging Markets


When Alcyone made her nest on the beach, waves threatened to destroy
it. Aeolus restrained his winds and kept them calm during seven days
in each year, so she could lay her eggs.
These became known as the “halcyon days,” when storms do not occur.
Today, the term is used to denote a past period that is being
remembered for being happy and/or successfuL

read more


Trade, @realDonaldTrump and Protests: A Guide to the Main EM Risks in 2020 @markets @PaulWallace123
Emerging Markets


A jump of almost $3 trillion in stock-market valuation this year,
currency volatility at a five-year low and bond spreads at their
narrowest level in almost two years.
On the surface, emerging markets are ending 2019 with a spring in their step.
Look under the hood, though, and many pitfalls await investors, from
the U.S. election to an upsurge of popular unrest across Latin America
and the lingering worries over trade wars.
Never mind country-specific issues such as rising defaults in the
Chinese domestic bond market, slowing growth in India and the
deepening crisis at South Africa’s state power company, Eskom.
The competing narratives in a sector that accounts for 60% of the
global economy are well-illustrated by the divergence in outlooks.
UBS AG says riskier assets will produce only moderate returns in 2020.
But Goldman Sachs Group Inc. and JPMorgan Chase & Co. are bullish on
developing-nation stocks, while Morgan Stanley is betting that bonds
are poised to rally.
The U.S.-China trade dispute and Brexit “dominated and drove markets”
in 2019, said David Woo, the Bank of America strategist who a year ago
said he wouldn’t touch emerging markets with a “10-foot pole.”
“This year will be about the dissipation of these policy
uncertainties, and this should provide a boost to global growth by
releasing pent-up demand as companies rebuild inventory and resume
capital expenditures,” said Woo, who heads the bank’s rates,
currencies and emerging-market fixed-income strategy from New York.
For HSBC Holdings Plc, which was optimistic about emerging-market
assets earlier in 2019, tougher times loom.
“Heading into 2020, the conditions are not seen coming together for EM
currencies to stage a broad-based recovery,” said analysts including
Hong Kong-based Paul Mackel and Ju Wang. “It will be another
frustrating year.”
Trade Wars
As in 2019, emerging-market investors will watch how the U.S. and
China’s relationship develops. There are many who doubt this month’s
so-called phase-one agreement, which boosted markets, will lead to
much progress over deeper problems such as Washington’s displeasure
over Beijing’s vast web of industrial subsidies.
Any signal that tension between the two sides is worsening will hit
developing-nation assets hard, not least China’s yuan.
“The outcome of the U.S.-China trade war is crucial to the outlook for
emerging markets in 2020,” said Bank of America.
U.S. Federal Reserve Chairman Jerome Powell buoyed emerging-market
assets last week when he suggested the central bank would hold off
from raising interest rates until at least 2021.
If that happens, it should keep the dollar in check and ensure plenty
of capital still flows to emerging markets.
But if an unexpected acceleration in U.S. inflation prompts the Fed to
change plan, or other major central banks suddenly turn hawkish, that
could push up core rates and squeeze the spreads on developing-nation
bonds.
The extra yield investors get when buying sovereign dollar bonds in
emerging markets rather than U.S. Treasuries is already at the lowest
since April 2018, with the gap falling below 300 basis points this
month, according to J.P. Morgan Chase & Co.
The International Monetary Fund reckons emerging-market economies will
expand 4.6% next year, almost three times as fast as developed
nations. Still, growth in China and India is slowing, which will hurt
emerging economies as a whole, according to Citigroup Inc.
“EM potential growth rates are falling,” said analysts including David
Lubin in London and Dirk Willer in New York. This “raises questions
about asset prices, and particularly foreign exchange,” they said.
The good news, according to Goldman, is that Brazil, Mexico, Russia,
South Africa and other nations still have room to loosen monetary
policy, at least in the short term. The bank says this will boost
company earnings and help emerging equities generate a total return of
11% in 2020.
“A number of emerging-market central banks can cut rates further in
the coming months, though the number of cutters will diminish as the
year progresses,” said Goldman economists including Hong Kong-based
Andrew Tilton.
The hunt for higher yields will probably continue in 2020, especially
with central banks in developed economies still dovish. But the drop
in rates on local-currency bonds this year means the appeal of the
emerging-market carry trade might start to wane.
The average yield on local bonds in developing nations has decreased
to 4.2%, the lowest in more than a decade, according to Bloomberg
Barclays Indexes.
Investors still keen on the carry trade may have to turn to some of
the riskier currencies. Societe Generale SA recommends the Egyptian
pound and Nigerian naira, where foreigners can get bond yields of more
than 12%. Bank of America likes the Kazakh tenge.
The Democratic primaries and the U.S. presidential election on Nov. 3
could rock global markets. Most analysts say it’s too early to tell
whether emerging-market assets would benefit from Donald Trump winning
a second term or from someone else entering the White House.
The possibility, however remote, that he’s forced out of office before
the vote following his impeachment this week adds another layer of
complexity for investors.
“Trump has presided over an acrimonious trade dispute with China, but
also an equity market that has gained 45%,” said SocGen analysts
including Jason Daw in Singapore.
“Whether another Trump presidency or a Democrat leader would be good
or bad for financial markets is an open question, but there will be
effects on policy and sentiment before and after the election.”
The region has been rocked by protests from Chile to Ecuador, Bolivia
and Colombia over everything from inequality to corruption.
Latin America’s Eurobonds have rallied since the start of December,
but they’re still lagging behind those of other emerging-market
regions over the past six months.
“In 2020, anger against governments will not go away,” said Citigroup
economists including Dana Peterson, who’s based in New York. “Politics
will matter much in LatAm and will drive much of the trading around
the region.”
Citigroup doubts the two biggest economies -- Brazil and Mexico --
will offer investors much respite, even if protests don’t spread
there.
In Brazil, political infighting will probably slow President Jair
Bolsonaro’s tax reforms, while Mexico’s fiscal situation may
deteriorate with President Andres Manuel Lopez Obrador potentially
ramping up spending to buoy the struggling economy, Citigroup says.
Government Defaults
Sovereign defaults have been rare in emerging markets in recent years.
But in 2020 more countries could join Venezuela, which defaulted two
years ago. Markets are most nervous about Argentina, Lebanon and
Zambia.
Argentina’s currency and bonds plummeted in early August when Alberto
Fernandez’s surprise victory in a primary vote put the leftist on
course for the presidency. Fernandez, who was sworn in this month, has
signaled he will open talks with creditors to delay debt payments.
Harvard University economist Carmen Reinhart says this restructuring
battle would be even nastier than Argentina’s last one, which dragged
on for 15 years after its 2001 default.
Lebanon has been without a government since protesters forced Prime
Minister Saad Hariri to resign in late October. Its next Eurobond is
due in early March. Even if it pays that one, markets doubt the
country can hold out indefinitely.
Its dollar yields have soared to an average of 30% and many of its
bonds trade below 50 cents, suggesting investors expect heavy
write-offs.
Zambia’s Eurobond yields have climbed to almost 20% amid a slowing
economy and worsening power cuts. Investors say it probably needs a
bailout from the IMF, though the government seems reluctant to accept
the conditions that would come with that.

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13-AUG-2019 :: The Feedback Loop Phenomenon
Emerging Markets


China has exerted the power of pull over a vast swathe of the world
over the last two decades. We can call it the China, Asia, EM and
Frontier markets feedback loop.
This feedback loop has been largely a positive one for the last two
decades. With the Yuan now in retreat [and in a precise res- ponse to
Trump], this will surely exert serious downside pressure on those
countries in the Feed- back Loop.
To wit, emerging market stocks closed down for 11 days running , 12
being an all-time record which was narrowly missed.
The Purest Proxy for the Chi- na, Asia, EM and Frontier markets
feedback loop phenomenon is the South African Rand aka the ZAR.

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The extent of China's importance for the rest of the developing world can be seen by the way the non-Chinese emerging currencies track metals prices. @johnauthers
Emerging Markets


The relationship is far tighter than that with U.S. interest rates.
For emerging markets, we have perhaps already reached the point where
China and its banking regulators are more important than the U.S. and
the Federal Reserve:

Frontier Markets

Sub Saharan Africa

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'Murder has become an official policy of the government,' says Tanzanian opposition figure Tundu Lissu @NewAfricanMag @thomashcollins1
Africa


On September 7, 2017, leading Tanzanian opposition figure Tundu Lissu
was shot 16 times in the administrative capital of Dodoma while
waiting in a parked car outside parliament.
Though the government denies any wrongdoing, Lissu says the event
marks a turning point in Tanzania’s history whereby the ruling party
and its leader John Magufuli are beginning to use deadly force as an
official policy.
Hours before the event, Magufuli, who was hailed as an anti-corruption
crusader upon entering office in 2015, announced on local television
that those who betray the government’s economic policies will not
survive.
An outspoken government critic, Lissu had that day taken to parliament
to protest against hefty tax hikes on mining companies, a policy which
he believes amounts to little more than extortion.
Almost one week later, the former lawyer awoke in neighbouring Kenya
after having spent six days in a coma.
“Something like this had never happened before, such a spectacular
assassination has never been a part of our politics,” Lissu told New
African from Belgium where he has since been receiving treatment.
“By making it official, by openly encouraging and directing that
opponents of the government should be killed, Magufuli has taken it to
a new level altogether.”
Yet while the degree of violence is something new, Lissu says
observers are mistaken if they believe Tanzania to be an open and
peaceful society.
The ruling Chama Cha Mapinduzi (CCM) party is the longest serving in
Africa, a feat which is only made possible through state violence, he
says.
“This is where most people get Tanzania very wrong. The Tanzanian
government has always been fairly violent in a low-level way against
its people. There have been a lot of killings.”
Many are worried about the upcoming election which the opposition has
already promised to strongly contest.
Coming to the end of his recovery, Lissu says he will return to
Tanzania to participate in the democratic process though the exact
date “depends on the security situation.”
Planning to return this November, his trip was postponed following
concerns over his personal safety.
Lissu, a member of the main opposition party, will throw his weight
behind chairman Freeman Mbowe whom he expects will lead Chadema in the
upcoming contest.
Despite a crackdown on government opposition including a blanket ban
on political rallies and legislation which allows the de-registration
of candidates and parties, Lissu is cautiously optimistic about the
state of the opposition.
“I would describe the opposition as bruised and battered but not dead
and out of the contest,” he says.
The ban on public rallies has forced the opposition to up their game
in terms of organisation and communication, Lissu says.
With “stronger underground networks” Chadema will likely join forces
with the rising ACT- Wazalendo party which enjoys strong support in
Zanzibar.
Only through a broad coalition of opposition parties can Magufuli be
defeated, he claims.
Yet as the government continues its crackdown on human rights and
freedom of speech, serious doubts persist over the likelihood of free
and fair elections.
“I frankly don’t believe that CCM, as it I now, is capable of ceding
power peacefully through the democratic transition of power,” Lissu
says.
“They will send in the army, they will send in the murder squad.”
Along with the many political issues Tanzania is facing, Lissu remains
a steadfast critic of Magufuli’s economic policies – some of which
have earned the president praise in wider circles.
Though these objections led to an attempt on his life, the Chadema
politician continues to argue that the prime beneficiary of Magufuli’s
anti-corruption and resource nationalism drive is the president
himself.
A previously little-known figure in Tanzanian politics, Magufuli rose
to prominence taking a tough stance on rampant corruption which had
troubled the administration before him.
In the first few years of his presidency he was celebrated for
trimming public fat, gaining the moniker “the bulldozer” in the
process.
Since then the business community has come under repeated attack, with
many now detained under charges of corruption or money laundering.
Rather than a genuine attempt to ward against the practice, Lissu
believes that the lack of prosecution for those detained reveals a
more malign intention.
“There isn’t a single case which has been concluded,” he says.
“Those in prison are told to either pay up or continue rotting. It’s
extortion plain and simple.”
So too in other areas of the economy has Magufuli looked to come down
hard on those not playing by the rules, particularly in the mining
sector.
In 2017, the government slapped a $190 retrospective tax bill on
British mining firm Acacia for allegedly operating illegally in the
country and for failing to fully disclose its exports earnings over
nearly two decades.
Though a $300m settlement between Canadian mining firm Barrick Gold,
which acquired Acacia in September, and the government has just been
reached, Lissu again questions the sincerity of Magufuli’s
interference.
“This is not economic nationalism, this is state orchestrated
extortion,” he says.
“What he has done for the past four years is run an extortion racket.
Going after the business community local and foreign, shaking them
down and making them pay money. If they don’t pay the government will
seize their assets and freeze their accounts. Barrick had to pay
because they had no choice. They had already invested hundreds of
millions of dollars.”
With Magufuli in office “not one serious company” will invest in
Tanzania, he adds.
It’s also unclear whether Magufuli’s overreach into the business
community benefits the state coffers.
Owing to its socialist past which aimed to erase ethnic identities
through the concept of ‘ujamaa’ – meaning national brotherhood in
Swahili – Tanzania is rarely discussed through the lens of tribalism,
something which so dominates discussions in neighbouring countries
like Kenya.
That said, according to Lissu, the beneficiaries of Magufuli’s
crackdown on corruption and foreign companies are his people, the
Sukuma, who live in northwestern Tanzania near Lake Victoria and make
up approximately 16% of the population.
Building an airport in his own village, Lissu accuses Magufuli of
acting like one of Africa’s most infamous despots.
“We have a regime which claims to be against corruption but if you
look closely enough it is more like Mobutu Sese Seko of the former
Zaire,” he says.
“The army chief, the chief justice, the attorney general, the
solicitor general, the chairman of the electoral commission, the
auditor general are all Sukuma. Everyone is from that region.”
For these reasons, Lissu believes that Magufuli must be unseated in
the next election.
“There is a point beyond which we cannot be pushed,” he says.
“Tanzanians may be quiet, but they are hurting and they are getting
very angry. When they finally say enough is enough, people will have
to tell us whether Tanzanians are as gentle as the stereotype.”

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Elephant dung is fuelling South Africa's gin boom Sales have jumped by 54% in a year @TheEconomist
Africa


You might think that elephant dung is best kept far away from gin,
which most people find tasty enough served with tonic water and a
slice of lime. Not so, say Paula and Les Ansley, South African
distillers who infuse theirs with pachyderm poo to capture “the
textures and flavours of the African bush” and sell it for 659 rand
($46) a bottle. Indlovu gin may be aimed primarily at those with an
“adventurous spirit”, but it is only the latest splash of ethanol on a
market that has caught fire. In 2018 South Africans sipped 54% more
gin than the year before, reckons iwsr, a research firm. Meeting this
demand are dozens of new firms. At the inaugural sa Craft Gin Awards
in August there were 110 entries. “For decades we have been drinking
many imported British gins,” says Jean Buckham, who runs The Gin Box,
a subscription service that deals exclusively in South African craft
gin. “Until recently, we had never really South Africanised it.” In
2015 there were fewer than a dozen gin distilleries. Now there are 50,
of which 30 are in the Western Cape. Part of the region’s attraction
is its wealth of “botanicals”, or natural flavourings, which make each
gin taste different. Inverroche, one of the pioneers of South Africa’s
craft industry, uses fragrant fynbos shrubs. It makes 18,000 bottles a
month and exports to 17 countries. Three factors explain South
Africa’s boom. The first is that gin is becoming more popular
everywhere. Consumption increased by 8% around the world and 52% in
Britain in 2018. Another was a liberalisation of licensing laws after
the end of apartheid in 1994 that made it easier to start a distillery
and for non-whites to consume the same types of alcohol as whites.
(Under the racist regime it was hard for black South Africans to go to
liquor shops to buy “white” booze; instead they went to informal
boozers called shebeens.) The last is that producers of South Africa’s
more famous drink, wine, are struggling. A gin distillery can be set
up in a warehouse; a vineyard needs sun, water and land. Across the
Western Cape vintners are wrestling with recent droughts, contested
land claims and weak prices. bdo, a consulting firm, reckons that only
half of vineyards are making money. Even as posh new craft gins
generate a buzz, most South Africans stick to the cheaper stuff. Gins
that cost more than 225 rand a bottle account for just 6% of sales.
But for those who can afford to splash out, the delights of elephant
dung and tonic await.

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09-DEC-2019 :: Ramaphosa's South Africa which reported -0.6% Q3 2019 GDP was awarded the Grand Croix de l'Orde National du Merit, on behalf of the Grand Master,
Africa


Ramaphosa’s South Africa which reported -0.6% Q3 2019 GDP. President
Ramaphosa, however, was awarded the Grand Croix de l’Orde National du
Merit, on behalf of the Grand Master, His Excellency President Alpha
Conde of the Republic of Guinea.

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Usher in 2020 at the Kilifi New Year, a contemporary African alternative and electronic music festival from 30 Dec 2019-2 Jan 2020 @nomadmagafrica
Africa


Featuring 40+ artists from all across East Africa and overseas . Take
a bite out of Kilifornia and savour the memories.

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