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Preparing for the Post-QE World @bv
Over the past eight years, the major central banks have increased
their balance sheets to $18 trillion from $6 trillion, predominantly
through the purchase of their own government's bonds. While the Fed
has ended its QE program, the European Central Bank and Bank of Japan
continue theirs. But those too will eventually come to an end. What
happens next will determine whether the world economy is set on a path
to real growth or further stagnation.
"Unwinding" these positions -- even progressively as the acquired
assets mature -- would almost certainly create deflation and a
financial crash as it would lead to the withdrawal of massive amounts
of liquidity from the financial system. Instead, we are likely to see
what Adair Turner, the former chairman of the Financial Services
Authority, recently called a state of "permanent monetization."
Permanent monetization may be inevitable, given the risks and
difficulties entailed in undoing the asset accretion that happened
under QE. It can prove beneficial too. Since central banks are
ultimately owned by governments, absorbing the QE purchases would
effectively mean that governments would own their own bonds, assets
that comprise a significant share of national debt.
Recognizing this changes the national debt picture. The newly
consolidated national debt will be markedly lower once the assets
acquired by the central banks through QE are subtracted; indeed, debt
would stand at historically acceptable levels, as the table below
What is essentially an accounting change would mean that governments
would have greater scope to launch fiscal stimulus than previously
anticipated. A large-scale stimulus program focusing on infrastructure
and boosting human capital would likely trigger a world economic
recovery. It would allow the benefits of QE to accrue to society as a
whole rather than to the few owners of QE-inflated financial assets.
But there are risks as well. Permanent monetization assumes that the
assets purchased through QE will never be settled by the debtor, the
governments that issued them. The whole purpose of independent central
banks was to prevent governments from using monetary policy to fund
its expenses or its debt, so-called monetary financing.
Amboseli National Park Wikipedia
Amboseli National Park, formerly Maasai Amboseli Game Reserve, is in
Kajiado County, Kenya. The park is 39,206 hectares (392 km2; 151 sq
mi) in size at the core of an 8,000 square kilometres (3,100 sq mi)
ecosystem that spreads across the Kenya-Tanzania border. The local
people are mainly Maasai, but people from other parts of the country
have settled there attracted by the successful tourist-driven economy
and intensive agriculture along the system of swamps that makes this
low-rainfall area (average 350 mm (14 in)) one of the best
wildlife-viewing experiences in the world with 400 species of birds
including water birds, pelicans, kingfishers, crakes, hammerkops and
47 types of raptor.
The park protects two of the five main swamps, and includes a dried-up
Pleistocene lake and semi-arid vegetation.
The park is famous for being the best place in Africa to get close to
free-ranging elephants. Other attractions of the park include
opportunities to meet Maasai and visit a Maasai village. The park also
offers spectacular views of Mount Kilimanjaro, the highest
free-standing mountain in the world.
Amboseli offers some of the best opportunities to see African wildlife
because the vegetation is sparse due to the long dry months. Amboseli
National Park is home to many species, including elephants, Cape
buffaloes, impala, Masai lions, cheetahs, spotted hyenas, Masai
giraffes, plains zebras and blue wildebeest among other African
animals. There is also a host of Kenyan birds, both large and small.
Amid Syrian chaos, Iran's game plan emerges: a path to the Mediterranean
Law & Politics
Those who have observed Suleimani up close as he inspects the
frontlines in Syria and Iraq, or in meetings in Damascus and Baghdad,
where he projects his immense power through studied calm, say he has
invested everything in Syria – and in ensuring that Iran emerges from
a brutal, expensive war with its ambitions enhanced. “If we lose
Syria, we lose Tehran,” Suleimani told the late Iraqi politician Ahmed
Chalabi in 2014. Chalabi told the Observer at the time that Suleimani
had added: “We will turn all this chaos into an opportunity.”
Securing Aleppo would be an important leg in the corridor, which would
run past two villages to the north that have historically been in Shia
hands. From there, a senior Syrian official, and Iraqi officials in
Baghdad, said it would run towards the outskirts of Syria’s fourth
city, Homs, then move north through the Alawite heartland of Syria,
which a year of Russian airpower has again made safe for Assad. Iran’s
hard-won road ends at the port of Latakia, which has remained firmly
in regime hands throughout the war.
Ali Khedery, who advised all US ambassadors to Iraq and four
commanders of Centcom in 2003-11 said securing a Mediterranean link
would be seen as a strategic triumph in Iran. “It signifies the
consolidation of Iran’s control over Iraq and the Levant, which in
turn confirms their hegemonic regional ambitions,” he said. “That
should trouble every western leader and our regional allies because
this will further embolden Iran to continue expanding, likely into the
Gulf countries next, a goal they have explicitly and repeatedly
articulated. Why should we expect them to stop if they’ve been at the
casino, doubling their money over and over again, for a decade?”
The deep ugly cunning of the Zuma cabal Rand daily Mail
Zuma is a wily beast, slouching ungainly like a hyena along the dark
edges of government
Finance Minister Pravin Gordhan is now to be charged with fraud. Zuma
still faces 783 corruption charges that a high court ordered the NPA
to reinstate, but they did nothing.
Hundreds, if not thousands, of people are saying these NPA charges
against Gordhan are politically motivated and are just intimidation.
High profile people such as Jay Naidoo, Sipho Pityana, Moletsi Mbeki,
Trevor Manuel, Jackson Mthembu, retired judges, constitutional
experts, analysts and political commentators have joined the outrage
on social media and elsewhere. They should lead a concerted
Zuma is a wily beast, slouching ungainly like a hyena along the dark
edges of government, using his intelligence training, a deep, ugly
cunning, and “captured individuals” to power his patronage networks.
Smoke and mirrors, false flags and undercover ops help achieve his
nefarious aims. Why is it he is always out of the country when major
The clearest recent example is the early morning presser called today
by Zuma’s NPA lapdog Shaun Abrahams. His bombshell was that Gordhan
would be charged. The Rand plunged and social media went insane, while
Tina Joemat-Pettersson quietly announced that Eskom would handle the
nuclear build procurement. Oh! The public distracted while Zuma
quietly ensures his Russian pension kickback. A trillion Rand at
stake. A card trick!
Goldman Sachs Sees 'Sharpening of Knives' in S. Africa's ANC @business
Divisions within the governing African National Congress are deepening
and a potential downgrade of South Africa’s debt rating to junk isn’t
fully priced in by markets, according to Goldman Sachs Group Inc.
The rand slumped as much as 4.3 percent against the dollar on Tuesday,
the most since June, and bond yields rose to the highest in more than
a month after prosecutors said Finance Minister Pravin Gordhan must
appear in court on Nov. 2 on fraud charges. Five-year South African
credit-default swaps, an indication of risk, climbed 15 basis points
on Tuesday to 265, the highest level since July 8 and above those of
Russia, Brazil and Turkey, which all have junk credit-ratings.
“There is clearly a sharpening of the knives between the various
factions within the ANC,” Colin Coleman, a partner and head of Goldman
Sachs Group in South Africa, said in an interview on Bloomberg TV. The
reaction to the news on Tuesday in the country’s financial markets was
“less than expected,” meaning that the risk of South Africa losing its
investment-grade status hasn’t been fully factored in, he said.
The rand’s reaction on Tuesday was “less than could’ve been the case,”
Coleman said in a text message response to questions. The currency,
which fell to a record low of 16.8717 in in January is still far off
its worst levels and “may have run more,” he said. “The market’s not
thinking Pravin will be fired.”
Ethiopia admits death toll in anti-regime protests may exceed 500 FT
Mr Hailemariam said there had been at least 170 deaths in the region
of Oromia and another 120 in Amhara since demonstrations began last
November. But he said: “When you add it up it could be more than 500.”
John Ashworth, an economist with Capital Economics in London, warned
in a research note on Tuesday that “there is a clear risk that an
escalation in violence poses a serious threat to Ethiopia’s economy”.
Anger Boiling Over in Ethiopia HRW
From the hundreds of interviews Human Rights Watch has carried out
with protesters, witnesses and victims since the protests began, it is
clear that each act of brutality by the military – the same military
now tasked with restoring law and order – further emboldens the
The government’s announcement indicates that it does not intend to
reverse course, away from the use of force and towards engagement with
communities about their grievances. Instead it seems determined to use
force to suppress free expression and peaceful assembly.
Until Ethiopians can voice their views about critical issues such as
development and governance, anger and frustration will likely
continue, plunging the country into further uncertainty and possibly
toward an even more dire and irreversible human rights crisis.
Congo political rift likely to spark 'large-scale' violence -UN
UNITED NATIONS (Reuters) - There is "extreme risk" to the stability of
Democratic Republic of Congo as a deepening political rift over
President Joseph Kabila's future will likely spark large-scale
violence, the United Nations envoy to the country said on Tuesday
"Actors on all sides appear more and more willing to resort to
violence to achieve their ends," Maman Sidikou, head of the
18,000-strong U.N. peacekeeping mission in Congo, known as MONUSCO,
told the U.N. Security Council.
"While MONUSCO will do everything it can within its mandate to protect
civilians, the scope of the threats dramatically outstrip the
mission's capabilities," he said.
"The Democratic Republic of Congo has entered a period of extreme risk
to its stability," Sidikou said. "The coming period will certainly be
extremely difficult, the tipping point in the serious violence could
be reached very quickly."
May 2015 ''The revolutionary contingent attains its ideal form not in the place of production, but in the street''
PAUL Virilio (born 1932) is a French cultural theorist and urbanist.
In his book ‘Speed and Politics’ he says: “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),
becomes in other words a producer of speed.’’
As we look around the world today, we can see a battle for the
‘street’ from the streets of Bujumbura to the streets of Baltimore. In
November last year, I wrote about Ouagadougou’s signal to sub-Saharan
Africa and concluded that: We need to ask ourselves how many people
can incumbent shoot stone cold dead in such a situation – 100, 1000,
This is another point: there is a threshold beyond which the incumbent
cannot go. Where that threshold lies will be discov- ered in the
throes of the event.
Therefore, the preeminent point to note is that protests in Burkina
Faso achieved escape velocity.
Transport minister James Macharia puts KQ bosses on notice @BD_Africa
Mr Macharia said a Cabinet sub-committee, comprising his
Industrialisation and Treasury counterparts, the Attorney-General and
himself, is studying the report to determine who to investigate,
reprimand, sack or prosecute.
“After three weeks or so, we shall begin taking action based on the
findings and recommendations of the audit report,” he said.
“Anybody found culpable shall be held to account. Based on the nature
of the findings, we shall take appropriate actions. We could see some
people leave the company while others could end up in court.”
The Executive as constituted is no longer credible especially in front
of a major capital raising exercise.
African bourses beat NSE on bank rate capping @BD_Africa
The year-to date return of the NSE All Share Index stands at -5.8 per
cent, while the 20 Share Index is 18.7 per cent down since January.
The third quarter of the year has accounted for most of the NSE’s
decline, in large part due to the fall in bank shares last month
following the rate caps.
Some of the counters though have shown signs of recovery in the past week.
“Among the top 10 stocks by market cap, Safaricom was the only gainer
in the third quarter 2016 on the back of the company issuing a special
interim dividend of Sh0.68 per share. Co-operative Bank, Equity Group,
KCB Group, DTB and Barclays declined by 25.3, 20.1, 17, 15.8 and 15.1
per cent respectively, following the enactment of the Banking Act
Amendment 2015 that capped the maximum rate chargeable on loans by
banks to four per cent above the Central Bank Rate,” said Cytonn
Investments in their latest quarterly market report.
Among the other top six African bourses, Morocco Stock Exchange’s all
share index is the best performer with a year-to-date return of 12.5
per cent, while the Johannesburg Stock Exchange all share index is up
2.48 per cent.
The Egypt Stock Exchange EGX 100 index has gained 1.94 per cent this
year and Tunisia’s Tunis Exchange 5.9 per cent.
The Nigeria Stock Exchange All Share Index has a -1.1 per cent return,
with the Zimbabwe Stock Exchange industrial index the worst performer
at -13.8 per cent.
For dollar investors, the return for the NSE is -4.8 per cent, with
the stable shilling helping investors eke out small gains for
investments that are shilling denominated.
On the back of a rapidly depreciating naira, foreign investors in
Nigeria have booked a 37 per cent decline in dollar terms, which works
to the advantage of competing markets such as Kenya.
South Africa and Morocco, however, offer a higher dollar return for
investors compared to Kenya, at 16.7 per cent and 14.3 per cent
The Kenyan market has as a result seen rising purchases by foreign
investors, attracted by the lower share valuations that make for a
good entry point into the bourse.
In terms of outlook, analysts at HTM Capital, however, say the banking
sector, which accounts for more than a quarter of the markets total
value of Sh1.98 trillion, might bring further negative impact should
financial results show significant decline as a result of lower