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Turkey says Russian jet violated its airspace again, warns of consequences
Law & Politics
Russian Defense Ministry spokesman Major-General Igor Konashenkov
denied that any Russian plane had entered Turkish airspace, and called
the Turkish allegation "pure propaganda".
He said Turkish radar installations were not capable of identifying a
particular aircraft or its type or nationality, and that no verbal
warning had been issued in either English or Russian.
"We are making a clear call to the Russian Federation not to violate
Turkish airspace, which is also NATO airspace," the statement said.
Turkish President Tayyip Erdogan said he wanted to meet his Russian
counterpart Vladimir Putin after the incident.
"I told our Foreign Ministry to convey my desire to meet Mr Putin
personally. There has been no answer on this yet," Erdogan told
reporters at the airport before departing for a visit to Latin
The downing of the Russian warplane in November left relations between
the two countries in tatters. Russia responded with economic sanctions
that have hit Turkish exports and tourism revenues.
Syrian civil war: Could Turkey be gambling on an invasion?
Law & Politics
The shooting-down – the first of a Russian plane by a Nato power since
the Korean War – is important because it shows how far Turkey will go
to maintain its position in the war raging on the southern side of its
550-mile border with Syria. It is a highly relevant event today
because, two months further on, Turkey now faces military developments
in northern Syria that pose a much more serious threat to its
interests than that brief incursion into its airspace, even though
Ankara made fresh claims yesterday over a new Russian violation on
The five-year campaign by Turkey’s President Recep Tayyip Erdogan’s to
overthrow Assad in Damascus, by backing the armed opposition, looks to
be close to defeat.
Turkey could respond to this by accepting a fait accompli, conceding
that it would be difficult for it to send its army into northern Syria
in the face of strong objections from the US and Russia. But, if the
alternative is failure and humiliation, then it may do just that.
Gerard Challiand, the French expert on irregular warfare and the
politics of the Middle East, speaking in Erbil last week, said that
“without Erdogan as leader, I would say the Turks would not intervene
militarily [in northern Syria], but, since he is, I think they will do
Currency Puzzles and Negative Interest Rates By ALY KHAN SATCHU @TheStarKenya
The Bank of Japan stunned markets Friday, when in a 5-4 vote, the Bank
of Japan’s board imposed a 0.1% fee on deposits left with the Bank of
Japan, effectively a negative interest rate.
The BOJ added “The BOJ will cut the interest rate further into
negative territory if judged as necessary,” in a statement.
The Yen entered a Tail-Spin and moved from 118.50 before the news to a
low of 121.50 which is 3 figure move. [I think a Samurai Bond now
looks a really peachy idea].
Sitting here in Africa, its rather difficult imagining a situation
where you get charged to put your Money on Deposit or where you might
borrow money from the Bank and end up paying back less than the
Principal amount borrowed. ''Crazy as it sounds, several of Europe’s
central banks have cut key interest rates below zero and kept them
there for more than a year'' [Bloomberg View] The European Central
Bank now charges banks 0.3 percent to hold their cash overnight.
Sweden also has negative rates, Denmark used them to protect its
currency’s peg to the euro and Switzerland moved its deposit rate
below zero for the first time since the 1970s. By the end of 2015,
about a third of the debt issued by euro zone governments had negative
yields. That means investors holding to maturity won’t get all their
Some have characterised the ECB's and the BOJ's lurch into negative
territory as ''currency warfare'' By keeping their currencies ''cheap
as chips'' its felt Europe and Japan are gaining an unfair advantage,
particularly in the Global Export markets.
This Year, it has been China which has been ringing alarm bells all
over the Financial Markets. On Tuesday, Wang Baoan, the head of the
National Bureau of Statistics was detained in a graft investigation.
on 24 AUG 15 I wrote
''The further problem is that no one believes the data either. This
moment when the market stops suspending its disbelief is seriously a
dangerous one for policy makers''
Simply No-One outside the Chinese Communist Party's Echo Chamber [this
Echo Chamber has striking similarities with the Opposition's Eurobond
Echo Chamber] believes the official Chinese GDP data. Chinese
Electricity consumption expanded 0.5% in 2015 versus 2014 and clearly
does not confirm a GDP expansion rate of just under 7%. Shipments to
the rest of the world including
Europe, the U.S. and Africa [from China] is down more than 40 percent
from its peak in mid-2012.
George Soros, the man who broke the Bank of England [and I had just
reached the Trading Floor at Credit Suisse First Boston and watched
this unfold in real time in front of my eyes],has been warned off
going to “war on the renminbi” by Beijing.
“Soros’s war on the renminbi and the Hong Kong dollar cannot possibly
succeed — about this there can be no doubt,” read a front-page opinion
piece in the overseas edition of the People’s Daily headlined
“Declaring war on China’s currency? Ha ha”.
The Problem is this and its likely that George Soros Esquire is going
to make another Killing and is set to skin the Bank of China.
“And the grand macro-economic elephant in the room is what happens if
China is forced into a major one-off devaluation in retaliation.
Markets are unlikely to react well to a big yuan devaluation, and the
further the ECB and the BOJ force their currencies down the more they
push China to act.” [Bloomberg]
Gold 6 month INO 1121.85
A sumptuous painting by the 17th century Italian artist Orazio
Gentileschi, showing a young nude woman about to be showered with
gold, sold to the J. Paul Getty Museum for $30.5 million at Sotheby’s
in New York.
The price for “Danae,” which was commissioned in 1621 and recently
hung at the Metropolitan Museum of Art in New York, set an auction
record for the Baroque artist and was one of the top auction prices
for an Old Master painting, Sotheby’s said Thursday.
U.N. chief tells African leaders not to 'cling to power'
"Leaders should never use undemocratic constitutional changes and
legal loopholes to cling to power. We have all seen the tragic
consequences when they do," Ban told the gathered presidents,
including Zimbabwe's veteran leader Robert Mugabe.
"Do we allow that group to continue ... to harass us even in our
independent countries," Mugabe asked after Ban had spoken.
The great oil bust and coming wave of refugees
The real risk lies in countries that are heavily dependent on oil. As
in the old Soviet Union, the prospects for social disintegration are
Sub-Saharan Africa will certainly be one epicentre. Nigeria, its
largest economy, could be knocked to its knees. Oil production is
stalling and unemployment is expected to skyrocket. Already,
Kenya Expects IMF to Approve $750 Million Precautionary Loan @WSJ
By Matina Stevis
NAIROBI, Kenya--East Africa's largest economy is expecting the
International Monetary Fund to approve a new precautionary lending
program that it can use in case of a severe financial shock, as
economic conditions across the continent deteriorate.
Kenya's Treasury Secretary, Henry Rotich, said the new IMF facility
would offer the country access to $750 million over the next two
years. The loan would be accessed shortly after approval by the IMF,
which is expected in March.
"We are going to continue with the same type of arrangement...we will
only need it if we have an external shock. We are insured," Mr. Rotich
said in an interview with The Wall Street Journal from his office on
the 14th floor of the Treasury in central Nairobi.
"We are in a world that is more vulnerable than before...that's the
importance of such a facility."
The IMF earlier this week approved a short-term extension of two
existing programs, a loan and precautionary credit line, through March
15. That extension buys time for the government to complete a budget
and enact economic overhauls that fit the fund's financing conditions.
"Discussions on continuing Kenya's program engagement with the fund
beyond March 15 are under way," IMF spokeswoman Lucie Mboto Fouda said
That Kenya, a net energy importer that has weathered recent market
shocks better than most of its African peers, is eager to renew an IMF
credit line is instructive about the darkening economic outlook across
the continent and the uncertainty it creates.
Collapsing commodity prices and a slowdown in China have sent asset
prices tumbling in many of Africa's biggest economies, including
Nigeria, Zambia and Angola. Kenya, by contrast, has benefited from low
oil prices and a comparatively diversified economy.
However, Kenya hasn't been immune to the market volatility and China's
slowdown. The shilling has fallen 10% against the greenback in the
past 12 months and lower-than-expected revenue has forced Mr. Rotich
to submit a supplementary budget that cuts spending by up to $60
"We want to cut the deficit by 1% of gross domestic product," the
finance minister said. The new budget will be submitted soon and will
be valid for the rest of the fiscal year, until June.
In October last year the World Bank slashed Kenya's expected growth by
0.6 percentage point to 5.4% in 2015 and 5.7% in 2016. While that is
slower than expected, it is still faster than the average growth of 4%
seen by the IMF in sub-Saharan Africa for this year. The World Bank
was expecting Kenya's fiscal deficit to be a massive 8.7% of GDP, but
Mr. Rotich said that with the supplementary budget, he saw it closer
to 7% of GDP.
Mr. Rotich acknowledged that China's slowdown would continue to cause
short-term fallout for Kenya, dampening foreign direct investment. But
the finance minister also predicted that Beijing's shift to a
consumption-led economy would offer big longer-term opportunities:
boosting export growth and helping Kenya benefit from industry
relocation from China, as Chinese production costs rise.
Kenya could return to international capital markets to borrow funds
after July as part of financing its next fiscal year, Mr. Rotich said,
adding he was considering all options: a Eurobond, a Samurai or a
Mr. Rotich strongly rejected accusations by Kenya's main opposition
party and the press here that about $1 billion raised in a Eurobond in
2014 was misappropriated by government officials. The opposition has
called for Mr. Rotich to resign.
The brewing scandal has cast a shadow on Kenya's successful maiden
Eurobond, which raised a total of $2.7 billion in an original issue
and a tap a few months later.
Mr. Rotich conceded the scandal could hinder Kenya's ability to borrow
as international investors become more skeptical of African
sovereigns, but blamed "perception of corruption" for the difficulty
in dismissing the accusations.
Contrary to allegations, Mr. Rotich said, all the money raised had
come into Kenya and was used in the budget. The opposition here has
been claiming that $1 billion has been unaccounted for and there is no
evidence that it ever entered the country.