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Monday 18th of January 2016
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“If you can't fly then run, if you can't run then walk, if you can't
walk then crawl, but whatever you do you have to keep moving forward.”
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18-JAN-2016 A Start To The Year That Goes Back Decades, @TheStarKenya Africa |
ONE of the finest books on the markets I have ever read is called
‘’Reminiscences of a Stock Operator’’ by Edwin Lefèvre. It was written
in 1923 and is an account of the life of the securities trader Jesse
Livermore. Lefèvre says many things in this wonderful book. He, for
example, says:
“Another lesson I learned early is that there is nothing new in Wall
Street. There can’t be because speculation is as old as the hills.
Whatever happens in the stock market today has happened before and
will happen again. I’ve never forgotten that. I suppose I really
manage to remember when and how it happened. The fact that I remember
that way is my way of capitalising experience.”
“But a busy market did not keep me from thinking about the work. Those
quotations did not represent prices of stocks to me, so many dollars
per share. They were numbers. Of course, they meant some- thing. They
were always changing. It was all I had to be interested in the
changes. Why did they change? I didn’t know. I didn’t care. I didn’t
think about that. I simply saw that they changed. That was all I had
to think about five hours every day and two on Saturdays: that they
were always changing.
That is how I first came to be interested in the behaviour of prices.
I had a very good memory for figures. I could remember in detail how
the prices had acted on the previous day, just before they went up or
down. My fondness for mental arithmetic came in very handy.
“I noticed that in advances as well as declines, stock prices were apt
to show certain habits, so to speak. There was no end of parallel
cases and these made precedents to guide me. I was only 14, but after
I had taken hundreds of observations in my mind I found myself testing
their accuracy, comparing the behaviour of stocks today with other
days. It was not long before I was anticipating movements in prices.
My only guide, as I say, was their past performances. I carried the
‘dope sheets’ in my mind.”
“You can spot, for instance, where the buying is only a trifle better
than the selling. A battle goes on in the stock market and the tape is
your telescope. You can depend upon it seven out of ten cases.’’
There are so many deep truths in this extraordinary book but the key
phrase is “the tape is your telescope”.
The tape since the start of 2016 has been unprecedented. The venerable
English Times said last week that the “markets suffer[ed] their worst
start to the year since [the] Great Depression”. An economist at RBS
advised clients to “sell everything except high-quality bonds”.
Krishna Memani, chief investment officer at Oppenheimer Funds Inc in
New York told Bloomberg:“Markets have to go through several stages and
right now they’re just holding their head and crying.”
The Shanghai market is down a whopping 18% since the start of the
year. In fact Nigeria’s All Share is the second worst performer in
2016 having slumped 17.91% over the same period. European stocks fell
into a bear market. “The Tape” is narrating a story of “financial
carnage”. The Bloomberg Commodity Index fell to the lowest level in
data going back to 1991. Currency markets have seen a massive flight
to quality. The South African rand collapsed 10% in the early hours of
Monday morning last week before recovering a little. The Nigerian
Naira whose official rate is just under 200.00 would now be closer to
350.00 if it were a freely convertible currency. Investors are buying
the yen, the euro and the dollar and dumping everything else as fast
as they can. Interestingly, the Kenya shilling has been a big
outperformer. In part jest, I tweeted last week that the shilling is
the new yen. I, like Lefevre, have watched the markets for eternity
and I have never seen anything like this and thats saying something
because I can remember 1994, 1998 and those were big and seismic
events.
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Dow Sinks 390 Points in Global Selloff, Crude Falls Nears $29 Africa |
The Dow Jones Industrial Average sank 391 points, European stocks fell
into a bear market and the Shanghai Composite Index wiped out gains
from an unprecedented state-rescue campaign as global equities added
to the worst start to a year on record. Oil touched $29.28 a barrel
before closing at a 12-year low. A measure of default risk for
junk-rated U.S. companies surged to the highest in three years. Yields
on 10-year Treasury notes dipped under 2 percent as doubts grow that
the Federal Reserve will raise interest rates. Gold surged the most in
six weeks.
The Bloomberg Commodity Index, which measures returns on 22 raw
materials, dropped 1.4 percent to the lowest level in data going back
to 1991.
The Canadian dollar fell for an 11th straight day in its longest run
of losses on record. New Zealand’s kiwi slumped 1.4 percent.
Treasury 10-year note yields slipped below 2 percent to the lowest
since October, casting doubt on the Fed’s ability to raise interest
rates.
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Giving @BarackObama His Due New York Times Law & Politics |
Barack Obama’s election in 2008 swept “away the last racial barrier in
American politics with ease,” The New York Times reported. The New
Yorker, with its cover of a glowing Lincoln Memorial, heralded “the
resurgence of America’s ability to astonish and inspire.” They sensed
“the beginning of a new era.”
You couldn’t help thinking of these trumpets of hope while watching
the graying head of the president on Tuesday night. As he walked to
the exit, he turned to soak in the scene of his final State of the
Union address. “Let me take one more look at this thing,” he said.
By any objective measurement, his presidency has been perhaps the most
consequential since Franklin Roosevelt’s time. Ronald Reagan certainly
competes with Obama for that claim. But on the night of Reagan’s final
State of the Union speech in 1988, when he boasted that “one of the
best recoveries in decades” should “send away the hand-wringers and
doubting Thomases,” the economic numbers were not as good as those on
Obama’s watch.
At no time in Reagan’s eight years was the unemployment rate lower
than it is today, at 5 percent — and this after Obama was handed the
worst economic calamity since the Great Depression. Reagan lauded a
federal deficit at 3.4 percent of gross national product. By last
fall, Obama had done better than that, posting a deficit of 2.5
percent of G.D.P.
On policy, then, Obama has been a remarkable doer, though you wouldn’t
know it from the curiously inept self-promotional apparatus of his
White House. The swagger we saw from this president on Tuesday —
saying, “anyone claiming that America’s economy is in decline is
peddling fiction,” and “if anybody still wants to dispute the science
around climate change have at it, you’ll be pretty lonely” — was
absent most of the last seven years.
But on the mastery of changing hearts and minds, the “ability to
astonish and inspire,” he falls short. His presidency, as of now, has
not been transformational. He has 370 more days, or thereabouts, to
make a dent in a hard history.
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28-OCT-2013 @BarackObama and @HassanRouhani The Two Husseins Law & Politics |
THE recent rapprochement between President Barack Obama and Iran’s
Hassan Rouhani has certainly snapped a losing sequence in US-Iran
relations that goes all the way back to the Iranian revolution in 1979
when Ayatollah Khomeini overthrew Mohammad Reza Pahlavi, the Shah of
Iran. The Shah was the second and last monarch of the House of Pahlavi
and otherwise known as the peacock throne. Hussein [Barack Hussein
Obama] and Hassan [Rouhani] share the same name as did Prophet
Muhammed’s revered grandsons. Those who pursue the study of anthro-
ponymy [personal names] especially in the Islamic World probably view
this as very fortuitous.
I was wandering around the Hirshhorn Gallery in Washington last year
and I came across this from the Chinese artist Ai Weiwei:
What’s in a name?
A name is the first and final marker of individual rights, one fixed
part of the ever-changing human world. A name is the most basic
characteristic of our human rights: No matter how poor or how rich,
all living people have a name, and it is endowed with good wishes, the
expectant blessings of kindness and virtue.
Hussein and Hassan are going to cut through a great deal of
interference. In this situation, there are powerful vested interests
fully invested in the status quo. If the pax Americana in the Middle
East were a three legged stool with the US the most important leg,
then Israel and Saudi Arabia are the other two legs of that stool.
Neither Riyadh nor Tel Aviv are aligned with President Obama’s Iranian
rapprochement and Saudi Arabia in particular has become increasingly
forthright and is even threatening its own pivot and away from the US.
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Tsai Wins Taiwan’s Presidency, Captures Legislature in Landslide Law & Politics |
Taiwan opposition leader Tsai Ing-wen rode a tide of discontent over
everything from China ties to economic growth to become the island’s
first female president and secure a historic legislative majority for
her Democratic Progressive Party.
Tsai, 59, a former law professor, won 56 percent of the vote to 31
percent for the ruling Kuomintang’s Eric Chu. Her victory margin was
the biggest since Taiwan’s first democratic presidential election two
decades ago. The DPP won 68 seats in the 113-seat legislature, gaining
its first ever majority and locking the KMT out of power for the first
time since since Chiang Kai-shek fled with his government across the
Taiwan Strait in 1949.
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Currency Markets at a Glance WSJ World Currencies |
Euro 1.0891
Dollar Index 98.94
Japan Yen 117.25 The dollar slid to 116.56 yen JPY=, from 117.10 late
in New York. A break below 116.15 - its August trough - will take the
greenback back to one-year lows.
Swiss Franc 1.0051
Pound 1.4279 sterling languished at a 5-1/2 year low below $1.4300
Aussie 0.6916
India Rupee 67.525
South Korea Won 1210.73
Brazil Real 4.0479
Egypt Pound 7.8418
South Africa Rand 16.6730
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Gold 1 month INO 1091.40 Commodities |
Brent LCOc1 settled down $1.94, or 6.3 percent, at $28.94 a barrel,
sticking below the pivotal $30 a barrel mark after briefly dipping
below that level in the previous two days. It fell as far as $28.82,
the lowest since February 2004.
U.S. crude CLc1 ended $1.78, or 5.7 percent, lower at $29.42, after
hitting a contract low of $29.13, its lowest since November 2003,
earlier in the session.
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Iran sanctions: Middle East stock markets crash as Tehran enters oil war Emerging Markets |
Saudi Arabia’s stock market crashed yesterday as nuclear sanctions on
Iran were lifted, clearing the path for an all-out oil war between the
Middle Eastern rivals.
The lifting of sanctions means Iran can start exporting oil worldwide,
having been restricted to selling to a handful of countries, including
China and India.
Tehran’s plan to ramp up daily exports from one million barrels
currently to 3.4 million barrels in seven months’ time will unleash a
new wave of oil on to a flooded market and threatens to drive the
price to its lowest level in decades.
Fears of a new price war between the world’s biggest crude-oil
producer and Iran caused Saudi Arabia’s Tadawul All Share Index, the
largest Arab market, to drop by 5.4 per cent. It has now shed 20 per
cent of its value since the start of the year.
Meanwhile, shares in Qatar and Dubai, two more oil-dependent Gulf
states, fell 7.2 per cent and 4.6 per cent respectively. Abu Dhabi’s
main share index dropped 4.2 per cent.
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Nigerian banks allow foreign currency transfers as FX restrictions ease Africa |
The naira NGN=D1 is pegged at around 198 to the dollar on the official
interbank market but slid to a record low of 305 on the parallel
market last week amid low FX reserves.
Central bank governor Godwin Emefiele said foreign reserves in January
stood at around $28 billion compared with $37 billion in June 2014,
making clear the impact of reduced oil revenues.
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Somalia received Saudi aid the day it cut ties with Iran: document Africa |
A document from the Saudi embassy in Nairobi to the Somali embassy in
the Kenyan capital showed the kingdom pledging $20 million in budget
support and another $30 million for investment in Somalia, a nation
trying to rebuild after two decades of war.
The two grants would come from the Saudi Development Fund, according
to the document that was dated Jan. 7, the same day Somalia cut ties
with Tehran.
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Kenya Jets Target Militants After Group Says 100 Soldiers Killed Kenyan Economy |
Kenya’s military carried out air raids on al-Qaeda-linked militants in
southwestern Somalia after an attack on an African Union military base
Jan. 15 in which the Islamists said at least 100 Kenyan soldiers died.
The Kenya Defence Forces used both land and air forces in response to
the attack on the El Adde base in Somalia’s Gedo region near the
Kenyan border, Samson Mwathathe, the head of Kenya’s military, said in
a statement published Sunday on the Ministry of Interior’s website.
The operation is “delicate” because some Kenyan soldiers have been
captured and are being used as human shields, he said.
“As we speak right now our troops are engaging the terrorists,”
Mwathathe said. “We have information to the effect that some soldiers
are being used as human shield and we will not allow any further
casualties.”
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Treasury plans Eurobond type loan Nation Kenyan Economy |
National Treasury Cabinet Secretary Henry Rotich told the Sunday
Nation the Treasury will hold an international road show with global
investors to explore the possibility of new debt instruments for Kenya
with a view to plugging deficits for the country’s fiscal programme.
“Whatever deficit we have we will use to finance it by borrowing. Such
borrowing will be a mix of local and external borrowing ranging from
direct bilateral loans, export credit agencies, new products like
Sukuks and Samurai bonds, and all other products in the international
market including also going back to the Eurobond. We are not ruling
out that,” he said.
Mr Rotich said the appetite for Kenyan bonds was currently high in the
global market offering Kenya cheaper financing options away from the
local market.
He would be acting unperturbed by political noise surrounding
management of the proceeds of the 2014 Eurobond, which Opposition
leaders and critics say have been misappropriated.
The government has denied it and said all monies were properly applied
and investigation agencies have not found evidence of broken law at
this stage.
But Mr Rotich disputed the assertion that the country’s debt was
unsustainable noting that Kenya’s debt sustainability analysis shows
Kenya can shoulder additional debt without straining.
Nairobi-based analyst Aly Khan Satchu said the fact that Kenya has
access to international debt markets showed the confidence the world
has on Kenya’s debt repayment capability.
He, however, added that any new such debt should be channelled to
productive sectors particularly roads.
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