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Satchu's Rich Wrap-Up
 
 
Friday 17th of January 2020
 
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Africa

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Macro Thoughts

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China state media quoting Vice Premier Liu He as saying Beijing "full of confidence" in economic future, "optimistic" about economy in 2020 @onlyyoontv
Africa


He told Chinese reporters in DC phase one #trade deal eases tensions,
market uncertainty, “stabilizes expectations” in China economy.

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04-NOV-2019 :: At the Moment of Vision, the Eyes See Nothing
Law & Politics


Pollice verso or verso pollice is a Latin phrase, meaning “with a
turned thumb”, that is used in the context of gladiatorial combat.
The Republican Party will be making a hard nosed political calculation
this weekend
Vice President Pence who is an evangelical Christian is the coming Man
and this could happen real quick.

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13-JAN-2020 :: 2020 Opens with a Bang.
Law & Politics


its been very cinematic and stream of consciousness in 2020.
if I did not comply with his demands, then he would have Marine
snipers on tall buildings target protesters and security personnel
alike in order to pressure me.

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06-JAN-2020 :: The Assassination (The Escalation of 'Shadow War')
Law & Politics


Kronsteen outlines to Blofeld his play Blofeld [read Trump]:
Kronsteen, you are sure this plan is foolproof?
Kronsteen [read Pompeo]: Yes it is because I have anticipated every
possible variation of counter-move.Let me predict some counter moves.

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Think 2C of global warming wouldn't be bad? Think again - leader comment @TheScotsman
Law & Politics


After the warmest decade on record, humanity must stop the rise of
global temperatures to avoid catastrophic consequences like 37 per
cent of the entire world’s population experiencing severe heatwaves on
a regular basis.
In yet another sign that climate change is real, happening right now
and a problem we must take much more seriously than we currently are,
three major scientific organisations have concluded that the last
decade was the warmest on record.
The world’s average temperature in each of the last five years was
more than one degree Celsius above pre-industrial levels. To some,
this may not sound like much, but the effects have already been
profound.
For example, the US Glacier National Park once used to have some 150
glaciers, but is now down to less than 30 of significant size.
The famously impassable ‘Northwest Passage’ over the north of Canada
claimed the lives of scores of 19th century explorers looking for a
shorter sea route between Europe and the Far East as they became
trapped in the ice.
In 2013, the first freighter sailed through and in 2016 a cruise ship
made the journey.
And while Jakarta, the capital of Indonesia, has recently been under
water amid major floods, parts of Australia has been devastated by
wildfires that have sent vast clouds of smoke and dust into the air.
The famous US climate scientist Professor Michael Mann, currently on
sabbatical in Australia, told Reuters that it was “conceivable that
much of Australia simply becomes too hot and dry for human
habitation”, adding that “we could well see Australians join the ranks
of the world’s climate refugees”.
So we should be concerned about the effects of one degree of global
warming and we must increase our efforts to stop the rise in
temperatures.
For, according to the Intergovernmental Panel on Climate Change, at
1.5C of warming it is estimated that about 14 per cent of world’s
population will experience severe heatwaves at least once every five
years; at 2C, the figure is 37 per cent with heatwaves in India and
Pakistan like the one that killed thousands of people in 2015
potentially happening every year.
In the oceans, coral reefs – a vital habitat for many forms of marine
life – are expected to be virtually wiped out as a result of the
warmer water, ocean acidification and more severe storms of a 2c
world.
Droughts, fires and floods – how many more plagues of biblical
proportions will it take before we demand serious action from our
political leaders?

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the feedback loop and the risks of die back where we enter a phase of "cascading system collapse"
Law & Politics


''Entire ecosystems are collapsing’’
“We are in the beginning of a mass extinction''

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Currency Markets at a Glance WSJ
World Currencies


Euro 1.1138
Dollar Index 97.302
Japan Yen 110.24
Swiss Franc 0.9651
Pound 1.3087
Aussie 0.6900
India Rupee 71.02475
South Korea Won 1158.90
Brazil Real 4.1852
Egypt Pound 15.8272
South Africa Rand 14.3872

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JPM: we like NFLX going into earnings...$NFLX @Themarketear
World Currencies


1. Despite NFLX’s recent strong performance, we believe investor
sentiment remains quite mixed - the least favored FANG stock among
investors
2. We like NFLX shares into earnings - in our view 1Q expectations are
reasonable w/our 9.25M net adds estimate ahead of investor
expectations closer to ~8.5M
3. Importantly, 4Q serves as NFLX’s first chance to climb the wall of
worry & show strong growth alongside DIS+, while also providing a
clearer path to profitability

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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.

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"But it is a curve each of them feels, unmistakably. It is the parabola."
Commodities


“But it is a curve each of them feels, unmistakably. It is the
parabola. They must have guessed, once or twice -guessed and refused
to believe -that everything, always, collectively, had been moving
toward that purified shape latent in the sky, that shape of no
surprise, no second chance, no return.’’

Emerging Markets

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The implication for 2020s' Africa remains that the continent will be short of capital. And to a great extent, this is a function of its demographics @TheAfricaReport
Africa


While these criticisms may well have validity, the point is many
African countries are in fact oil-poor or even cobalt-poor, when we
consider the number of people that commodity export revenues have to
be divided between.
Nigeria exports only $1 a day (per person) from oil exports.
Even if the oil price trebled to $180/bl and Nigeria got all the
proceeds, $3 a day is not going to make every Nigerian rich.
For all the excitement about cobalt, the numbers are even smaller in
DRC, where exports are worth $0.50 per person per day.
Less attention is paid as to why China, rather than Africa, has such a
surplus of savings that China can export them around the world, and at
cheap interest rates.
It is not just China. We see this within Africa too. Morocco’s
borrowing costs are remarkably low. Morocco has such a surplus of
savings, it is indirectly exporting them across West Africa, via its
banks’ expansion plans.
What marks China, Mauritius or Morocco apart from Kenya, DR Congo,
Nigeria and Zambia?
After analyzing 1,586 data points in as many countries as possible
since 1960, we found out that demographics, and more precisely the
fertility rate, affect savings and interest rates and strongly drive
per capita GDP.
When there are fewer children (i.e. China, Mauritius and Morocco), the
ratio of adults to children/pensioners improves and GDP growth per
capita trebles. When there are many children per woman, it is
accompanied by low savings and high interest rates.
We found out that in Egypt, Ghana, Kenya, the fertility rate will drop
below 3 by 2030-2035, thus helping savings and bank deposits grow and
enabling these countries to replace external borrowing with ever
cheaper domestic borrowing.
In Angola, the Democratic Republic of Congo and Nigeria, the fertility
rate will remain above 3 over the next 20 years.
Leaders in these countries may be looking at faster growths in other
neighbouring countries and fail to recognise what is driving the
better growth – the demographic dividend.
This is when you stop having lots of children, and when you die
because you are old rather than because of disease.
For many decades, you are neither spending heavily on children nor
elderly parents. More importantly, the proportion of the population
able to work rockets higher.
Policymakers can talk about financial inclusion and mobile money, but
if a country has a total fertility rate above 3, bank deposits will
probably be 30% of GDP or less and real interest rates will be one the
highest in the world.
Fertility trends are the explanation of why we believe Kenya should
grow faster than Nigeria in the next two decades, and indeed, why most
of Africa will be beating most of the rest of the world on growth in
the 2030s, rising by 57% by 2030, relative to 2019 GDP levels.

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ZAMBIA Point of no return Public finances head south while the Patriotic Front clamps down on dissent ahead of next year's election
Africa


The ruling Patriotic Front's continued state of denial about the
country's dire debt situation sees the year begin with loan defaults,
dwindling state revenues, disintegrating public services and unpaid
civil service salaries.
The government's failure to make a €6 million loan repayment on its
military transport aircraft – one of a raft of delayed loan payments,
including to Chinese lenders – signals immense pressure on the state
coffers.
Debt is expected to worsen this year and approach 100% of GDP.

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14-OCT-2019 :: Ozymandias The Canary in the Coal Mine is Zambia.
Africa


“Investors have lost faith in government promises to get spending
under control and the government has fallen out with the IMF as well,”
he said.
In Zambia, Eurobonds are trading at 60c in the $. Even the Chinese
whom many thought was Santa Claus ave thrown in the towel.
I recall #FOCAC2018 and the famous photograph where all the Chinese
officials had a pen and paper and not one African official was taking
notes.
Had they been taking notes they would have heard Xi Jinping
specifically speak of ‘’The End of Vanity’’ which I characterised at
the time as a ‘’a substantive linguistic recasting of China Africa by
Xi Jinping’’
I only recently discovered Ecclesiastes and clearly Xi was ahead of me
in this regard.
Ecclesiastes 1:2-11 2 Vanity[a] of vanities, says the Preacher 2 Vani-
ty[a] of vanities, says the Preacher, vanity of vanities! All is
vanity. 11 There is no remembrance of former things,[c] nor will there
be any re- membrance of later things[d] yet to be among those who come
after.
It seems to me that we are at a pivot moment and we can keep
regurgitating the same old Mantras like a stuck record and if we do
that this turns Ozymandias
My name is Ozymandias, King of Kings;
Look on my Works, ye Mighty, and despair!
Nothing beside remains. Round the decay
Of that colossal Wreck, boundless and bare. The lone and level sands
stretch far away.”

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This article, by the CEO of Imara Asset Management, is a bleak account of the economic situ in Zimbabwe. You may need a hard drink at the end of it. @Wamagaisa
Africa


This article, by the CEO of Imara Asset Management, is a bleak account
of the economic situ in Zimbabwe. You may need a hard drink at the end
of it. “The introduction of Zimbabwe’s own currency, in 2019 has been
a disaster as predicted,” writes John Legat in this robust account

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21-JAN-2019 :: "money is the most universal and most efficient system of mutual trust ever devised." @harari_yuval
Africa


“Money is accordingly a system of mutual trust, and not just any
system of mutual trust: money is the most universal and most efficient
system of mutual trust ever devised.”
“Cowry shells and dollars have value only in our common imagination.
Their worth is not inherent in the chemical structure of the shells
and paper, or their colour, or their shape. In other words, money
isn’t a material reality – it is a psychological construct. It works
by converting matter into mind.”
The Point I am seeking to make is that There is a correlation between
high Inflation and revolutionary conditions, Zimbabwe is a classic
example

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21-JAN-2019 :: What is clear to me is that Zimbabwe is at a Tipping Point moment.
Africa


At the time of the Jasmine Revolution in Tunis the crowds chanted “We
are not afraid, we are not afraid, we are afraid only of God.”

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09-SEP-2019 :: Emmerson Mnangagwa who was eulogising Mugabe as a Revolutionary Icon has failed and is frankly as untenable as his erstwhile Mentor.
Africa

ኩባንያችን በመጀመሪያ 6 ወራት 22.04 ቢሊዮን ብር በማግኘት የእቅዱን 104%
አሳካ::#EthioTelecom generated 22.04 Billion ETB revenue in the first
half semester,a 104% of its target. @ethiotelecom
https://twitter.com/ethiotelecom/status/1217425277334302720?s=20

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Africa's richest woman and Angola's ex-first daughter Isabel dos Santos expressed interest on Thursday in running for the presidency @ReutersAfrica
Africa


Asked in an interview with Portuguese TV channel RTP whether she would
be interested in the role of president, which is next up in 2022, dos
Santos said: “It’s possible”.
Lourenco has cracked down on the role of his predecessor’s children,
firing dos Santos from her job chairing oil firm Sonangol and her
brother from the sovereign wealth fund.
The 46-year-old businesswoman nicknamed “The Princess” at home is
estimated by Forbes magazine to be worth more than $2 billion, while
two thirds of her compatriots live on less than $2 a day, according to
the World Bank.
She denies the allegations as a “witch hunt” forming part of an
attempt to erase her father’s legacy and distract from failures under
the new government.
In the RTP interview, she framed the accusations not just as an attack
on her family but as a campaign against future candidates for office.
“We cannot use corruption, or the supposed fight against corruption,
in a selective way to neutralise who we think could be future
political candidates,” she said.
“It’s about the fight for power.”

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South Africa Cuts Benchmark Rate to 6.25% From 6.5% @economics
Africa


The Monetary Policy Committee unanimously voted to lower the
repurchase rate to 6.25% from 6.5%, Governor Lesetja Kganyago told
reporters Thursday in the capital, Pretoria.
Inflation slowed to 3.6% in November and has been inside the central
bank’s target range since April 2017.
New forecasts released Thursday showed the rate of price growth will
settle at 4.5% in the third quarter of next year and stay there for
the whole of 2022. The central bank has long said it wants
expectations anchored there.
The central bank’s quarterly projection model now forecasts a
repurchase rate of 6.1% by the end of this year and 6% by the end of
2021.
Kganyago said the model prices in a 25 basis-point cut in this quarter
and another one in the final three months of 2020.
The Reserve Bank cut its 2019 economic growth forecast to 0.4% from
0.5% and lowered its projections for 2020 through 2022.
The economy probably dodged a second recession in as many years as
Kganyago said the MPC sees some positive growth in the fourth quarter.
The cut could take some heat off the central bank, which came under
fire last year from politicians and labor unions who say it should be
doing more to boost growth and help reduce the 29% unemployment rate.
While the ruling African National Congress reaffirmed the Reserve
Bank’s independence, role and mandate over the weekend, the
institution could increasingly come under pressure as the ANC prepares
for a conference in June to mark the mid-point of its current
leadership’s term.

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13-JAN-2020 :: Lets finish up in Kenya where we are currently under a Plague of Locusts and Al Shabaab attack
Africa


The Manda Bay attack is the first al-Shabab has carried out on a
U.S.military installation inside Kenya Among the aircraft destroyed at
the Manda Bay base were manned surveillance planes that collect data
across the border in Somalia, as well as over Kenya’s dense Boni
forest,
Also reportedly destroyed were aircraft operated by U.S. Special
Operations Command and modified Havilland Canada Dash-8 spy aircraft,
which carries the U.S. civil registration code N8200L.
This is a mind bending Jedi Level intrusion and asymmetric warfare
coup de grace.
The U.S. Africa Command has sent its crack East Africa Response Force
to secure the airfield and augment security. This is in fact a big
deal.

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Al Shabaab shoot locusts with machine guns as Somalia battles biggest swarms in 25 years @Telegraph
Africa


Farmers in southern Somalia are shooting at huge swarms of locusts
with heavy machine guns in a desperate attempt to save their crops,
according to media affiliated to the jihadist group Al-Shabaab.
The news comes as the country experiences its largest locust
infestation for 25 years. Since July, swarms of Desert Locusts from
nearby Yemen have invaded vast swathes of the Horn of Africa.
A typical swarm can contain up to 150 million insects per square
kilometre. Each locust can grow up to 4.3 inches long and travel up to
95 miles a day depending on the wind.
Every day, an average swarm can consume the equivalent of a year's
worth of food for 2,500 people.
According to the UN’s Food and Agriculture Organisation (FAO), the
locusts have already destroyed 70,000 hectares (175,000 acres) of
farmland in Somalia and neighbouring Ethiopia.
Somalia’s chaotic fighting makes spraying pesticide by aeroplane -
which the FAO has called the “ideal control measure” - impossible, the
agency said in a statement.

Kenya

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Kenya is in advanced talks with the World Bank for "a fairly priced" loan of up to 100 billion shillings ($991.57 million), a senior Treasury official said @reutersafrica
Africa


The balance of the funds will be raised through Kenya’s first
sovereign green bond, said Julius Muia, the principal secretary in the
ministry of finance

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Kenya in 2020: higher taxes, higher debt, more referendums @TheAfricaReport
Africa


Kenya’s President Uhuru Kenyatta, nearing the end of his second term
amid an economic downturn and political shifts, announced a raft of
changes in a televised address on 14 January, of which the “primary
thrust…was economic.”
“I want the economy to be more important focus than politics,”
Kenyatta said at the beginning of his address.
The plan, he said, is to increase the circulation of money in the
struggling economy.
While Kenyatta made his address from Mombasa, he left out how he plans
to revive the coastal city’s economy, devastated by his primary
infrastructure project, the Standard Gauge Railway.
Also missing were any tax breaks for the country’s struggling
businesses. With looming debt repayments, a ballooning wage bill, and
revenue target misses, the country has doubled down on tax collection,
which will undoubtedly affect measures to improve the business
climate.
A week before Kenyatta’s speech, his administration introduced a new
3% “patriotism tax” on small businesses.
A new 15% presumptive tax also came into effect on 1 January.
Even measures such as the fintech product will be affected by taxes on
mobile money, which increased the cost of using MPESA and other
similar services.
Another significant gap was transparency in the government’s deals.
While asking Kenyans to hold him and other leaders accountable for
their promises, Kenyatta did not address his promise to share publicly
the SGR contract between Kenya and the Chinese.
The opaqueness and secrecy of such deals, pundits argue, presents a
potential danger to the country’s economic prospects in the short term
and the long term, especially as the infrastructure loans become due.
Despite more than five terror attacks by Somali militant group Al
Shabaab on Kenyan soil, including one on a critical US base in the
country, Kenyatta did not address the country’s security.
“It is time for a new consensus,” Kenyatta said during his address.
After ascending to power together, the relationship between Kenyatta
and his deputy is now all but dead.
Kenyatta’s administration has not achieved much of what it set out to
do, however, the dynamics are different now the economy is spiralling
out of control.

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by Aly Khan Satchu (www.rich.co.ke)
 
 
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January 2020
 
 
 
 
 
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