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01-OCT-2018 :: Brent crude at a four year high
The World consumes 100 million barrels per day (bpd) - more than twice
what it was 50 years ago - If we use a Price of $80.00 a barrel, that
equates to $8b a day $2.92 Trillion a Year and thats a raw number
without value addition. And this is real cash and why Ryszard
Kapuściński wrote in his book Shah of Shahs
“Oil kindles extraordinary emotions and hopes, since oil is above all
a great temptation. It is the temptation of ease, wealth, strength,
fortune, power. It is a filthy, foul-smelling liquid that squirts
obligingly up into the air and falls back to earth as a rustling
shower of money.”
“Oil creates the illusion of a completely changed life, life without
work, life for free. Oil is a resource that anaesthetises thought,
blurs vision, corrupts.”
The History of Oil did not start In February 1945, when Roosevelt met
with King Abdulaziz of Saudi Arabia in person aboard the USS Quincy
but the History of the Petro-Dollar did. This Grand Bargain between
the US President and a Saudi King established that Oil would always be
denominated in Dollars and Folks from Saddam Hussein to Chavez of
Venezuela and now The High Representative of the European Union for
Foreign Affairs Federica Maria Mogherini have all sought to break the
chokehold of the Petro Dollar. Mogherini announced that Europe would
create a Special Purpose Vehicle ''a legal entity to facilitate
legitimate financial transactions with Iran and this will allow
European companies to continue trade with Iran, in accordance with
European Union law'' Good Luck with that Federica, well, at least she
showed willing, which is as far it goes.
Whilst Western Powers have been practically religious about how they
characterise Oil Wars as being nothing of the sort. You will recall
Wolfowitz who when asked why a nuclear power such as North Korea was
being treated differently from Iraq, where hardly any weapons of mass
destruction had been found, the deputy defence minister said: "Let's
look at it simply. The most important difference between North Korea
and Iraq is that economically, we just had no choice in Iraq. The
country swims on a sea of oil."
On Friday, Brent Crude surged to A 4 Year high above $83.00 a barrel.
The market is anticipating the US sanctions on Iran and a November
Guillotine. At its 2018 peak in May, Iran exported 2.71 million bpd,
nearly 3 percent of daily global crude consumption. Trump has proven a
sanction warfare Specialist in fact his intrusive, coercive, economic
and sanction warfare strategy is surely his signature success of what
has been an otherwise ''freewheeling'' US Administration. Venezuela
which was another big Supplier is imploding. The market is tight and
the Total CEO is now calling for triple digit Oil Prices. This is a
double whammy for many Emerging Markets [strong Oil weak currencies] ,
with India and its Prime Minister a Sitting Duck, for example.
Trump has become increasingly strident about high prices which is a
little cute given that it is his sanction warfare [particularly
against Iran] which has lifted prices. Donald Trump spoke on the phone
Saturday with King Salman bin Abdulaziz of Saudi Arabia, days after
the U.S. president’s latest criticism of OPEC over high oil prices.
Trump has gone after OPEC multiple times this year, including while
speaking at the United Nations on Sept. 25.
“OPEC and OPEC nations, are, as usual, ripping off the rest of the
world, and I don’t like it,” Trump said in an address to the United
Nations General Assembly in New York. “We want them to stop raising
prices. We want them to start lowering prices and they must contribute
substantially to military protection from now on.”
He of course is facing a problematic Mid-Term Election and the last
thing he wants are Angry Consumers at the Polling Stations. Therefore,
I venture, he will tempted to unload Supply out of the US Special
Reserve and therefore Bulls need to be wary of a precipitous downside
draft on that announcement which might well wash a lot of People out.
That announcement will be the starting Gun for Folks who have the guts
to catch a Falling Knife because it will prove a momentary and
What Oil at $100 a Barrel Would Mean for the Global Economy @business
4. Who wins from higher oil prices?
Most of the biggest oil-producing nations are emerging economies.
Saudi Arabia leads the way with a net oil production that’s almost 21
percent of gross domestic product as of 2016 -- more than twice that
of Russia, which is the next among 15 major emerging markets ranked by
Bloomberg Economics. Other winners could include Nigeria and Colombia.
The increase in revenues will help to repair budgets and current
account deficits, allowing governments to increase spending that will
4. Who loses?
India, China, Taiwan, Chile, Turkey, Egypt and Ukraine are among the
nations who would take a hit. Paying more for oil will pressure
current accounts and make economies more vulnerable to rising U.S.
interest rates. Bloomberg Economics has ranked major emerging markets
based on vulnerability to shifts in oil prices, U.S. rates and
One of the biggest winners might also find itself on the losing end:
Oystein Olsen, Norway’s central bank governor, warned that western
Europe’s biggest petroleum producer risks problems if the industry
takes its eyes off controlling costs.
Black mirror: '20:50', 1987, by Richard Wilson at the @haywardgallery via @spectator
A reflection on still water was perhaps the first picture that Homo
sapiens ever encountered. The importance of mirrors in the history of
art has been underestimated
“The sky was rarely more than pale blue or violet, with a profusion of
mighty, weightless, ever-changing clouds towering up and sailing on
it, but it has blue vigour in it, and at a short distance it painted
the ranges of hills and the woods a fresh deep blue.” ― Karen Blixen,
Out of Africa
Happy (811th) birthday, Mowlana #Rumi @JZarif
"I am not of the East, nor of the West, nor of the land, nor of the sea; ...
For I belong to the soul of the Beloved.
I have put duality away, I have seen that the two worlds are one;
One I seek, One I know, One I see, One I call."
Happy (811th) birthday, Mowlana #Rumi.
@jpmorgan Sees All-Out U.S.-China Tariffs, Lowers Yuan Call @economics
Law & Politics
“JPMorgan has adopted a new baseline that assumes a U.S.-China endgame
involving 25 percent U.S. tariffs on all Chinese goods in 2019,”
JPMorgan strategists including John Normand wrote in a note Friday.
While growth forecasts for both the U.S. and China aren’t much
affected, thanks in part to Chinese stimulus measures, “a weaker yuan
becomes part of the new equilibrium,” they wrote.
Former foreign secretary @BorisJohnson questioned whether @theresa_may believes in Brexit and branded her Chequers plan "deranged" @thesundaytimes
Law & Politics
In an interview with The Sunday Times — his first with a newspaper
since resigning from the cabinet — the former foreign secretary
questioned whether Theresa May believes in Brexit and branded her
Chequers plan “deranged”.
Johnson also called for the government to be “proud” to advance
Conservative ideas and far bolder in building houses and
He said Britain should build a bridge to Ireland and put the HS2
scheme on hold so a high-speed rail link can be built across the north
of England instead. And he touted his own experience of winning two
London mayoral elections as evidence that the Tories can win in
unlikely places — if they have the right leader.
In a scarcely coded attack on May’s taste for new regulations and
taxes, Johnson said: “I think we need to make the case for markets. I
don’t think we should caper insincerely on socialist territory. You
can’t beat Corbyn by becoming Corbyn.”
His performance was right out of Norman Rockwell with a touch of "Mad Men." @NYTimes
Law & Politics
What America saw before the Senate Judiciary Committee was an
injudicious man, an angry brat veering from fury to sniveling sobs, a
judge so bereft of composure and proportion that it was difficult not
to squirm. Brett Kavanaugh actually got teary over keeping a calendar
because that’s what his dad did. His performance was right out of
Norman Rockwell with a touch of “Mad Men.”
This is what you get from the unexamined life, a product of white male
privilege so unadulterated that, until a couple of weeks ago,
Kavanaugh never had to ask himself what might have lurked, and may
still linger, behind the football, the basketball, the lifting
weights, the workouts with a great high-school quarterback, the
pro-golf tournaments with Dad, the rah-rah Renate-ribbing yearbook,
the Yale fraternity, and the professed sexual abstinence until “many
years” after high school.
For my common sense, Mr. Kavanaugh “doth protest too much, methinks.”
Christine Blasey Ford rang true. I’ll take her “100 percent” over his.
She felt no need to yell. Nor did she hide behind a shield of
repetition. She did not succumb to pathos (“I may never be able to
coach again”). She spoke with a deliberation, balance and humanity
missing in the judge.
Kenya Shilling versus The Dollar Live ForexPros
Kenya Shilling gained marginally against the US Dollar by 0.1% in
Q3’2018 to close at Kshs 101.0 from Kshs 101.1 at the end of Q2’2018.
Improving diaspora remittances, which increased by 71.9% y/y to USD
266.2 mn in June 2018 from USD 154.9 mn in June 2017 and by 4.9% m/m,
from USD 253.7 mn in May 2018,
Unga Group Ltd reports FY 2018 EPS +1,271% Earnings here
Par Value: 5/-
Closing Price: 41.00
Total Shares Issued: 75708872.00
Market Capitalization: 3,104,063,752
Unga Group Limited FY 2018 results through 30th June 2018 vs. 30th June 2017
FY Revenue 19.982070b vs. 19.528785b +2.321%
FY Operating profit 1.273403b vs. 237.868m +435.340%
FY Finance income 116.649m vs. 67.415m +73.031%
FY Profit before taxation 1.299266b vs. 228.350m +468.980%
FY Profit for the year from continuing operations 788.774m vs.
FY Profit for the period 783.203m vs. [7.039m]
FY [Loss]/ Profit attributable to owners of the parent 509.082m vs.
Basic and diluted EPS 6.72 vs. 0.49 +1,271.429%
Total assets 9.932664b vs. 9.455316b +5.048%
Cash and cash equivalents at the end of the period 1.088455b vs.
Dividend 1.00 vs. 1.00 –
Discontinuation of operations at the Ugandan subsidiary shielded the
Group from some of the losses suffered in the preceding year, in which
an investment impairment was recorded.
exploration of regional opportunities is ongoing.
NDII: Fiddling, while Kenya burns @DavidNdii
First, the expenditure cuts are less than the revenue forecast which
is revised downwards by Sh. 96 billion, while expenditure is revised
downwards by Sh. 83 billion. Even though the 10 billion difference is
not such a big sum, it’s unclear why the government would go to such
lengths to table an austerity budget that increases the deficit.
More significantly, the revenue forecast is still unrealistic. The
budget was based on revenue growth of 31 percent, comprising of 30
percent and 36 percent increase in tax and non-tax revenues
respectively, which has now been scaled down to 25 percent, with tax
and non-tax revenue forecast down to 24 and 28 percent respectively.
These forecasts are out of touch with reality. Tax revenues increased
only three percent and non-tax by 12 percent for a total revenue
increase of four percent. This, as we will see shortly, is not an
anomaly—it is a significant trend.
But the National Treasury’s growth projections are as panglossian as
ever. In the original budget forecast, the nominal GDP expands from
7.7 trillion in FY16/17 (the latest actual data) to Sh. 12.6 trillion
in FY20/21 a growth of 64 percent or 17 percent per year. Nominal GDP
is the denominator used to calculate budget financial ratios. This
translates to a real economic growth rate of 7.4 percent per year
(this is obtained by applying an inflation adjustment known as GDP
deflator. I have applied the average deflator for the last five
years). Average growth rate for the last five years—5.56 percent.
Growth has topped seven percent only once in the last thirty years—
2007. Now comes the remarkable part. In the revised projections,
nominal GDP has been adjusted upwards to just under Sh. 13 trillion in
FY20/21. It is conceivable that the mandarins are factoring higher
inflation— one hopes so because otherwise it translates to a
delusional eight percent per year growth rate. The reason for the
sharp fall in the revenue ratio last year is now clear— GDP has been
inflated on purpose. What is this fantasy in aid of? Their purpose is
to reduce the budget financial ratios without budget cuts. This way,
they are able to “get away” with fiddling with the actual budget
figures and still achieve “fiscal consolidation.” This year, the
deficit in the revised budget is adjusted upwards by 14b from 603 to
622 billion but it as a ratio to GDP it declines from 6.3 to 6.1
percent on account of GDP being adjusted upwards by 321 billion.