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24-JUN-2019 :: Wizard of Oz World. @TheStarKenya Africa |
The Wizard of Oz is a Film made in 1939 and widely considered to be one of the greatest films in cinema history, It is a version of L. Frank Baum's 1900 children's book The Wonderful Wizard of Oz. and featured the then child star Judy Garland as Dorothy Gale. The Wizard is one of the characters in The Wonderful Wizard of Oz. Unseen for most of the novel, he is the ruler of the Land of Oz and highly venerated by his subjects. Believing he is the only man capable of solving their problems, Dorothy and her friends travel to the Emerald City, the capital of Oz, to meet him. Oz is very reluctant to meet them, but eventually each is granted an audience, one by one. In each of these occasions, the Wizard appears in a different form, once as a giant head, once as a beautiful fairy, once as a ball of fire, and once as a horrible monster. When, at last, he grants an audience to all of them at once, he seems to be a disembodied voice. Eventually, it is revealed that Oz is actually none of these things, but rather an ordinary conman from Omaha, Nebraska, who has been using elaborate magic tricks and props to make himself seem "great and powerful".
Last week we witnessed some ''Wizard of Oz'' level moves in the markets. The universe of negative-yielding bonds grew about $1.2 trillion last week pushing the total past $13 trillion for the first time. "Last year, the tally of negative-yielding paper was shrinking towards $6tn, only for the forces of financial repression to come roaring back as the global economy encountered turbulence.” [Financial Times]. Greek 10 Year Bonds which once printed 44% yields are currently yielding 2.44%. This violent financial repression climaxed [or did it?] last week and the Spillover Effect is to be seen in Gold which crossed $1,400,.00 for the first time since Sep 2013. BITCOIN [which in my considered opinion has never been about its utility but all about its Safe haven non-correlated asset status] flew through 10,000.00 crossed 11,000 and was last at 10,700 and has posted a more than +195% return in 2019. The Yen which is +2.545% versus the Dollar in 2019 was on a tear last week. The S&P closed at an all-time high up 17.8% year-to-date and has had its best start to a year since 1997.
The Real Estate Moghul President Trump has been brow-beating The Federal Reserve Chairman Powell even threatening him with demotion. Last week Powell whilst holding US interest rates steady signalled the next move would be lower. The Market fearing the Arrival of the ''Wicked Witch of the West'' has front-run Powell and has priced in 3 rate cuts within 12 months. If You were to look at the US economy in isolation, You would have to say such a forecast is absurd. The Economy sure has some soft spots but unemployment is at multi-decade lows and Consumer spending [the Key Pivot] holding up. The US 2 Year Note which is at around 1.75% is the Financial Instrument which is the purest Signal.in all the noise. We are in ''nose-bleed'' Territory and I afraid this is ''Voodoo Economics'' and just because we have not reached the point when the curtain was lifted in the Wizard of Oz and the Wizard revealed to be ''an ordinary conman from Omaha, Nebraska, who has been using elaborate magic tricks and props to make himself seem "great and powerful"'' should not lull us into a false sense of security.
We might ask ourselves what might the ''Wicked Witch of the West'' look like? Is it the spontaneous combustion of the once mighty Deutsche Bank and a multi trillion dollar derivative blow up? Is it a War with Iran that spikes Crude Oil and topples the Oil Markets. And think about this. A momentary blink of eye Flash Move in any of these markets would be deadly. The Tariff War will be having its 2nd Truce Dinner imminently. The First was in December and in Buenos Aires and whilst Donald and Xi quaffed sirloin steaks and Malbec Wine, the Huawei CFO was being interdicted in Canada that time. What will happen this time is anybody's Guess. Trump has been massaging the US markets ahead of his Truce Dinner but he is gaming the markets and like Obama once confessed, the US President is like a Train Driver he can speed the train up or slow it down but the Tracks have already been set. Therefore, I cannot see any quick resolution around the Tariff War. The US and its allies are upping the Ante in the South China Sea. Hong Kong speaks to geopolitical Volatility on the Chinese Periphery. And meanwhile, Trump stood down an Iranian Strike when the Planes were already in the Sky. Iran has been pushed to the brink by Trump's coercive, sanction warfare.and with Regime stability now on a knife-edge, its clear Iran feels it has nothing to lose.
“Don't forget the real business of war is buying and selling. The murdering and violence are self-policing, and can be entrusted to non-professionals. The mass nature of wartime death is useful in many ways. It serves as spectacle, as diversion from the real movements of the War. It provides raw material to be recorded into History, so that children may be taught History as sequences of violence, battle after battle, and be more prepared for the adult world. Best of all, mass death's a stimolous to just ordinary folks, little fellows, to try 'n' grab a piece of that Pie while they're still here to gobble it up. The true war is a celebration of markets.” ― Thomas Pynchon, Gravity's Rainbow
We are at the cusp of an unprecedented Financial Moment. How it plays out is anybodys Guess and that's exactly why Safe-Havens from Gold to Bitcoin from the Yen to the US 2 Year are bid. Its exactly when the markets fears ''Tail Risks'' [really really bad outcomes] are sky high that Safe Havens go bid.
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The World Now Has $13 Trillion of Debt With Below-Zero Yields @markets Africa |
The universe of negative-yielding bonds grew about $1.2 trillion this week after dovish messages from central banks in Europe and the U.S., pushing the total past $13 trillion for the first time. Joining the club of government debt with 10-year yields below zero this week were Austria, Sweden and France. Japanese and German rates plumbed fresh all-time lows amid a global bond rally that even got Wall Street pondering life with Treasuries yields under 1%.
“The message from the markets is that there are problems out there that central banks, not just the Fed, are now responding to,” Ed Hyman, Evercore ISI chairman, told Bloomberg TV.
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The Wizard of Oz: Pay No Attention Africa |
The Wizard is one of the characters in The Wonderful Wizard of Oz. Unseen for most of the novel, he is the ruler of the Land of Oz and highly venerated by his subjects. Believing he is the only man capable of solving their problems, Dorothy and her friends travel to the Emerald City, the capital of Oz, to meet him. Oz is very reluctant to meet them, but eventually each is granted an audience, one by one. In each of these occasions, the Wizard appears in a different form, once as a giant head, once as a beautiful fairy, once as a ball of fire, and once as a horrible monster. When, at last, he grants an audience to all of them at once, he seems to be a disembodied voice.
Eventually, it is revealed that Oz is actually none of these things, but rather an ordinary conman from Omaha, Nebraska, who has been using elaborate magic tricks and props to make himself seem "great and powerful". Working as a magician for a circus, he wrote OZ (the initials of his first two forenames, Oscar being his first, and Zoroaster being the first of his seven middle names) on the side of his hot air balloon for promotional purposes. One day his balloon sailed into the Land of Oz and he found himself worshipped as a great sorcerer. As Oz had no leadership at the time, he became Supreme Ruler of the kingdom and did his best to sustain the myth.
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"circumambulation" -- the act of walking around a sacred object, building or point in a landscape (often a mountain), as a devotional act or part of a pilgrimage (Latin circum, around, ambulatus, to walk) Africa |
"circumambulation" -- the act of walking around a sacred object, building or point in a landscape (often a mountain), as a devotional act or part of a pilgrimage (Latin circum, around, ambulātus, to walk). In Sanskrit, parikrama; "the path surrounding something".
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Spy-Satellite Images Reveal How Climate Change Is Rapidly Melting the Himalayan Glaciers @NewYorker Law & Politics |
Over the last several years, on Mt. Everest, veteran alpine guides have reported seeing an increasing number of human skeletons and frozen corpses. One guide named Gelje Sherpa told the Times that when he first summited, in 2008, he found three bodies, and during a recent season he found six. “They often haunt me,” he said. The bones and preserved bodies of climbers who didn’t make it to the summit, revealed as the peak’s glaciers recede, are, for some, more than enough evidence that warming temperatures are melting the Himalayan glaciers at an increasingly quick clip
Maurer developed computer software that created three-dimensional images from the overlapping pictures, allowing him and his colleagues to digitally “walk” across the glaciers’ surfaces as they appeared in 1975. In the end, they found that the six hundred and fifty largest glaciers across India, China, Nepal, and Bhutan, which together represent fifty-five per cent of the region’s total ice volume, have lost the equivalent of a vertical foot and a half of ice each year this century. That’s roughly twice as much as what they lost from 1975 to 2000, when temperatures were, on average, 1.8 degrees Fahrenheit cooler.
Schaefer told me that people often ask him when the Himalayas are going to be ice-free. “It’s a little bit like asking, When are the Antarctic or Greenland ice sheets gonna be gone?” he said. (Greenland’s summer heat is already weeks ahead of average, breaking the record for such extensive melting of its ice sheet at an early date.) “They are interesting questions, but they are not that relevant for us. If the ice sheets are gone, we are toast anyway. We will be gone way before.” The relevant question, he continued, “is what is the societal impact of the doubling in speed of these Himalayan glaciers’ retreats. We know, of course, that it’s really bad, but at least now we have a study that gives us a decently robust point of view of what’s actually going to happen as the temperature rapidly increases.”
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"Water is fluid, soft, and yielding. But water will wear away rock, which is rigid and cannot yield" Law & Politics |
“Water is fluid, soft, and yielding. But water will wear away rock, which is rigid and cannot yield. As a rule, whatever is fluid, soft, and yielding will overcome whatever is rigid and hard. This is another paradox: What is soft is strong,” Lao Tzu
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17-JUN-2019 :: Hong Kong is savouring a quite momentous Geopolitical Victory Law & Politics |
Hong Kong is savouring a quite momentous Geopolitical Victory and seriously countertrend in point of fact. The Supreme and ‘’Paramount Leader’’ made his first [that I can recall] volte-face. Make no mistake the Decider in this matter is Xi who has moved with despatch. Essentially, he understood Hong Kong could not be ‘’Xinjiang-ed’’ Furthermore, being a ‘’Paramount Leader’’ is a double-edged sword. “This is all on Xi’s shoulders,” said Trey McArver, co-founder of Beijing-based research firm Trivium China. [Bloomberg] “Xi has personally said that he would handle relations with the United States and at this point, he has failed. Those relations are spiraling out of control.” [Bloom- berg] The Periphery is a Boil that will not be lanced.
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@realDonaldTrump Doesn't Need to Attack Iran: He's Winning Already @bopinion Law & Politics |
What we’re seeing unfold in the Persian Gulf is a confrontation between a U.S. president who doesn’t know when he’s winning, and a Supreme Leader who doesn’t know when he’s losing. If Donald Trump changes his mind again and orders an attack on Iranian targets, he will have played into Ali Khamenei’s hands. It’s too early to exhale after Trump’s decision to cancel a military strike last night. If he could order the jets scrambled once – without giving Congress or American allies much time to consult and advise – he can do so again. The next time, he may not call it off. But that would be to snatch defeat from the jaws of victory. Trump seems to have lost sight of the fact that his “maximum pressure” sanctions campaign against the Islamic Republic is working: Iran’s economy is feeling great pain, and its isolation is deepening. For all of its proclamations of resistance and resilience, the regime in Tehran is plainly alarmed. In its panic, it has started to lash out in ways that hurt its own interests, and erode the sympathy it has enjoyed in international circles since Trump pulled the U.S. out of the nuclear deal last year. The threat to resume uranium enrichment, and to exceed agreed limits, is already losing Iran the support of the Europeans, as are the attacks on neutral shipping near the Persian Gulf. Khamenei’s humiliation of the Japanese Prime Minister Shinzo Abe, who made a good-faith effort to mediate an end to the confrontation, has cost Iran more goodwill. The shooting down of an American drone was yet another demonstration of the regime’s capacity for self-harm. And Trump was, for once, playing his cards reasonably well. He stated his openness to negotiations and his desire to avoid war. He dismissed the tanker attacks as “very minor” and attributed the downing of the drone as the work of a “loose and stupid” individual. Secretary of State Mike Pompeo also let the Iranians know that if their future actions caused the death of an American service member, it would trigger reprisals. This is exactly the right response to Iran’s provocations: To brush them off and allow the regime to damage itself in the court of world opinion, even as it is continually weakened by sanctions. For the first time since Trump torched the nuclear deal, it was just conceivable that he would be able to show the Iranian regime up for what it is: A danger to its neighbors and the wider world. An American military strike now, even if it avoided civilian targets, would risk undoing all that. It will be hard to justify to the international community – and indeed, to Americans – that the shooting down of an unmanned aircraft merits such a response. This would be true even if the Trump administration were to supply incontrovertible proof that the drone hadn’t crossed into Iranian airspace. Worse, there’s no reason to believe that a military strike would alter the behavior of the Iranian regime. Much more likely, Khamenei would use any American aggression as a way to rally public opinion among his countrymen, even among those who despise him. A disproportionate U.S. response would also let his regime reclaim the sympathy he has lost because of his recent recklessness. Khamenei might be tempted to keep provoking U.S. military strikes for just these reasons. While it goes without saying that a military strike would panic oil markets and threaten world trade, this would take a greater toll on the U.S. than on Iran. Khamenei might conclude that his economy is in a shambles anyway so what’s to lose? To paraphrase the old saying about wrestling with a pig, a military exchange with the Islamic Republic would hurt both the U.S. and Iran – but Khamenei would enjoy it. What should Trump do instead? Hold his nerve, keep his patience and let Iran dig itself into a deeper hole. Allow Khamenei to drain the pool of international sympathy for Iran. And allow the “maximum pressure” campaign to keep weakening the regime. Khamenei may never recognize that he is losing. But it's time for Trump to see that he's winning.
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Escobar: One Quadrillion Reasons Why Washington Fears Iran's "Maximum Counter-Pressure" @zerohedge Pepe Escobar Law & Politics |
As I previously reported, shutting down the Strait of Hormuz would destroy the American economy by detonating the $1.2 quadrillion derivatives market; and that would collapse the world banking system, crushing the world’s $80 trillion GDP and causing an unprecedented depression. The Persian Gulf is being described as an imminent “shooting gallery.” Brigadier General Hossein Salami stressed that Iran’s ballistic missiles are capable of hitting “carriers in the sea” with pinpoint precision. The whole northern border of the Persian Gulf, on Iranian territory, is lined up with anti-ship missiles – as I confirmed with IRGC-related sources. We’ll let you know when it’s closed Then, it happened. Chairman of the Chiefs of Staff of the Iranian Armed Forces, Major General Mohammad Baqeri, went straight to the point; “If the Islamic Republic of Iran were determined to prevent export of oil from the Persian Gulf, that determination would be realized in full and announced in public, in view of the power of the country and its Armed Forces.” The facts are stark. Tehran simply won’t accept all-out economic war lying down – prevented to export the oil that protects its economic survival. The Strait of Hormuz question has been officially addressed. Now it’s time for the derivatives. Presenting detailed derivatives analysis plus military analysis to global media would force the media pack, mostly Western, to go to Warren Buffett to see if it is true. And it is true. Soleimani, according to this scenario, should say as much and recommend that the media go talk to Warren Buffett. The extent of a possible derivatives crisis is an uber-taboo theme for the Washington consensus institutions. According to one of my American banking sources, the most accurate figure – $1.2 quadrillion – comes from a Swiss banker, off the record. He should know; the Bank of International Settlements (BIS) – the central bank of central banks – is in Basle. The key point is it doesn’t matter how the Strait of Hormuz is blocked. It could be a false flag. Or it could be because the Iranian government feels it’s going to be attacked and then sinks a cargo ship or two. What matters is the final result; any blocking of the energy flow will lead the price of oil to reach $200 a barrel, $500 or even, according to some Goldman Sachs projections, $1,000. Another US banking source explains: “The key in the analysis is what is called notional. They are so far out of the money that they are said to mean nothing. But in a crisis the notional can become real. For example, if I buy a call for a million barrels of oil at $300 a barrel, my cost will not be very great as it is thought to be inconceivable that the price will go that high. That is notional. But if the Strait is closed, that can become a stupendous figure.” BIS will only commit, officially, to indicate the total notional amount outstanding for contracts in derivatives markers is an estimated $542.4 trillion. But this is just an estimate. The banking source adds, “Even here it is the notional that has meaning. Huge amounts are interest rate derivatives. Most are notional but if oil goes to a thousand dollars a barrel, then this will affect interest rates if 45% of the world’s GDP is oil. This is what is called in business a contingent liability.” Goldman Sachs has projected a feasible, possible $1,000 a barrel a few weeks after the Strait of Hormuz being shut down. This figure, times 100 million barrels of oil produced per day, leads us to 45% of the $80 trillion global GDP. It’s self-evident the world economy would collapse based on just that alone. As much as 30% of the world’s oil supply transits the Persian Gulf and the Strait of Hormuz. Wily Persian Gulf traders – who know better – are virtually unanimous; if Tehran was really responsible for the Gulf of Oman tanker incident, oil prices would be going through the roof by now. They aren’t. Iran’s territorial waters in the Strait of Hormuz amount to 12 nautical miles (22 km). Since 1959, Iran recognizes only non-military naval transit. Since 1972, Oman’s territorial waters in the Strait of Hormuz also amount to 12 nautical miles. At its narrowest, the width of the Strait is 21 nautical miles (39 km). That means, crucially, that half of the Strait of Hormuz is in Iranian territorial waters, and the other half in Oman’s. There are no “international waters”. And that adds to Tehran now openly saying that Iran may decide to close the Strait of Hormuz publicly – and not by stealth. Iran’s indirect, asymmetric warfare response to any US adventure will be very painful. Prof. Mohammad Marandi of the University of Tehran once again reconfirmed, “even a limited strike will be met by a major and disproportionate response.” And that means gloves off, big time; anything from really blowing up tankers to, in Marandi’s words, “Saudi and UAE oil facilities in flames”. Hezbollah will launch tens of thousands of missiles against Israel. As Hezbollah’s secretary-general Hasan Nasrallah has been stressing in his speeches, “war on Iran will not remain within that country’s borders, rather it will mean that the entire [Middle East] region will be set ablaze. All of the American forces and interests in the region will be wiped out, and with them the conspirators, first among them Israel and the Saudi ruling family.” It’s quite enlightening to pay close attention to what this Israel intel op is saying. The dogs of war though are barking mad. Earlier this week, US Secretary of State Mike Pompeo jetted to CENTCOM in Tampa to discuss “regional security concerns and ongoing operations” with – skeptical – generals, a euphemism for “maxim pressure” eventually leading to war on Iran. Iranian diplomacy, discreetly, has already informed the EU – and the Swiss – about their ability to crash the entire world economy. But still that was not enough to remove US sanctions. As it stands in Trumpland, former CIA Mike “We lied, We cheated, We stole” Pompeo – America’s “top diplomat” – is virtually running the Pentagon. “Acting” secretary Shanahan performed self-immolation. Pompeo continues to actively sell the notion the “intelligence community is convinced” Iran is responsible for the Gulf of Oman tanker incident. Washington is ablaze with rumors of an ominous double bill in the near future; Pompeo as head of the Pentagon and Psycho John Bolton as Secretary of State. That would spell out War. Yet even before sparks start to fly, Iran could declare that the Persian Gulf is in a state of war; declare that the Strait of Hormuz is a war zone; and then ban all “hostile” military and civilian traffic in its half of the Strait. Without firing a single shot, no shipping company on the planet would have oil tankers transiting the Persian Gulf.
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"So we beat on, boats against the current, borne back ceaselessly into the past." - F. Scott Fitzgerald, The Great Gatsby Law & Politics |
“And as I sat there brooding on the old, unknown world, I thought of Gatsby’s wonder when he first picked out the green light at the end of Daisy’s dock. He had come a long way to this blue lawn, and his dream must have seemed so close that he could hardly fail to grasp it. He did not know that it was already behind him, somewhere back in that vast obscurity beyond the city, where the dark fields of the republic rolled on under the night.
Gatsby believed in the green light, the orgastic future that year by year recedes before us. It eluded us then, but that's no matter—to-morrow we will run faster, stretch out our arms farther. . . . And one fine morning——
So we beat on, boats against the current, borne back ceaselessly into the past.” ― F. Scott Fitzgerald, The Great Gatsby
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Libra: How Zucked are we really? @mailandguardian International Trade |
Murray Hunter, a digital rights researcher, warned that Facebook’s ubiquity is a “huge concern from a data privacy and social control point of view”.
“We need to be moving into a space where Facebook has less control over our lives,” he said. Although there might be “all kinds of assurances” from Facebook to address the data privacy concerns, he noted that the company has shown, “time and again, that the promises it has made to investors and users are not meaningful”.
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Knock knock guess who's back?!! @MevlutCanOzturk Emerging Markets |
“Winning Istanbul means winning Turkey” - Pres Erdogan Erdogan dealt stunning blow as Istanbul elects rival candidate. Imamoglu took 54% of vote, AK party’s Yildirim won 45%. Defeat in Istanbul, home to about a fifth of #Turkey’s 82 million people, also strips Erdogan’s party of a major source of patronage
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Ethiopian Army Chief Killed as Government Says It Thwarts Coup @business Africa |
The Ethiopian army’s chief of staff was shot dead by a bodyguard in what the government of Africa’s second-most populous country said was an assassination related to an attempted coup. General Seare Mekonnen and retired Major General Gezai Abera were killed Saturday at the army chief’s residence in the capital, Addis Ababa, Prime Minister Abiy Ahmed’s office said in an emailed statement. Authorities arrested the bodyguard. The government earlier thwarted a would-be coup in Ethiopia’s northern Amhara region that claimed the lives of the regional authority’s president, Ambachew Mekonnen, and his adviser, Ezez Wassie. Amhara region’s attorney-general, Migbaru Kebede, was injured and is in a hospital, the government said Sunday. “The situation in the Amhara region is currently under full control by the federation government in collaboration with the regional government,” it said. Amhara region has been wracked by unrest for the past three years as separatists there and in other states call for greater self-determination. Abiy has tried to show that the central government is concerned about all regions of the nation by making his administration more inclusive, even as the ruling party remains divided over his reform agenda. Authorities tightened security across the country and canceled large public gatherings, the prime minister said earlier on national television. The U.S. embassy in Addis Ababa confirmed reports of gunshots in the city on Saturday night. Access to the Internet has been shut down across the nation following reports of the killings, according to Netblocks, an advocacy group that monitors cyber-security. Conflicts have erupted in Ethiopia since Abiy assumed office last year and began political and economic reforms. An explosion on June 23 of last year struck a rally in Addis Ababa where Abiy was addressing thousands of supporters. The country, a federation of more than 80 ethnic groups, plans to hold general elections in 2020.
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African companies are expanding across the continent @TheEconomist Africa |
Plenty of African businesses have tried to conquer new markets over the years, only to return home sartorially compromised. Colonialism fragmented the continent and linked its economies to imperial capitals rather than to each other. That legacy locked many businesses into national silos. Today big European and American multinationals still dominate markets from logistics to soft drinks. African firms have announced $72bn of foreign direct investments in new projects on the continent this decade, according to fdi Markets, a data provider. Companies from the rest of the world have made nearly nine times as much. But the pan-African dream lives on. Two-thirds of African firms surveyed by McKinsey, a consultancy, in 2017, planned to enter new countries in the region in the next five years, compared with half of foreign multinationals in Africa. According to the Boston Consulting Group, the 30 biggest African companies operated in an average of 16 of the continent’s countries last year, twice as many as in 2008. Leading African businesses are stitching the region together, making it easier for others to follow suit. Banks serve their corporate clients across multiple countries. Business leaders flit between megacities aboard Ethiopian Airlines, which flies to 36 African states.The largest firms already have the scale to take on multinational incumbents. Aliko Dangote, a Nigerian cement baron, has ventured into ten countries. Dangote Group has overtaken LafargeHolcim, a Swiss behemoth, as the largest cement producer in sub-Saharan Africa. Mr Dangote’s plants, built by a Chinese contractor to two standard designs, are bigger, newer and more efficient than most others. He has the ear of presidents.Intra-continental expansion is a response to two challenges. The first is finding customers. The combined economy of Africa’s 54 countries is smaller than that of France. As they grow richer, individuals or businesses switch from informal purveyors to formal markets where big firms operate. But these customers are concentrated in pockets across a vast land mass. To reach as many as possible, Shoprite, a South African retailer, has opened supermarkets in 15 countries. A similar logic drove ocp Group, a Moroccan phosphate producer, to create a sub-Saharan subsidiary in 2016. By investing in soil research, microcredit and logistics, it hopes to turn subsistence farmers into commercial growers—and buyers of its phosphate fertiliser. Other firms are taking similar steps. The second challenge is uncertainty. Africa’s weak supply chains, volatile currencies and fickle regulators with a fondness for expropriation or capital controls, which make repatriating profits difficult, render the future blurrier than in mature economies. Businesses focused on a single country (or industry) face greater risks, notes Kartik Jayaram of McKinsey. Firms with a toehold in many places and sectors, like Dangote Group or Shoprite, are less exposed to a setback in any one of them. As Mr Bitature’s experience reveals, crossing borders can backfire. Policymakers in other countries are prone to sudden “somersaults”, cautions Abdul Samad Rabiu, whose bua Group sells everything from cement to sugar but has stuck to native Nigeria. Foreign soil can be inhospitable even in the absence of political flips. Tiger Brands, a South African foodmaker, sold its stake in its Nigerian flour division to Mr Dangote for $1 in 2015, three years after buying it from him for nearly $200m. A depreciating naira hit Nigerians’ pockets, dampening demand, and drove up the cost of imports like wheat, which Tiger could not pass onto consumers because of stiff competition. The strongest firms are those which are choosy. mtn, a large South African telecoms company, is pulling back from some smaller countries. But it is toughing it out in Nigeria, despite endless battles with regulators; it is a vast market, and gross operating margins of 44% stiffen the spine. ocp set out to deepen its presence in 15 African countries. It has winnowed the list down to five—including the regional giants, Nigeria and Ethiopia—where policies are most business-friendly.◼
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Zimbabwe Leader @edmnangagwa Wants New Currency, @IMFNews Loan in Revival Bid @economics Africa |
Zimbabwean President Emmerson Mnangagwa and his finance chief want a new currency by March, would seek financing from the International Monetary Fund and may even consider a Eurobond offering as the struggling economy emerges from almost two decades of isolation. The introduction of a new currency is crucial to his efforts to revive the economy, said Mnangagwa, who secured a five-year term in July elections after the military deposed Robert Mugabe in 2017. “It is necessary that we have our own currency,” he said in an interview in Maputo, Mozambique’s capital, where he was attending a conference. “I have faith that we’ll achieve that even before the end of the year or by the first quarter of next year.” The state abolished Zimbabwe’s currency in 2009, after an episode of hyperinflation rendered it worthless. Since then, the southern African nation has used a basket of currencies, including neighboring South Africa’s rand and the U.S. dollar. The country has quasi-currencies known as RTGS, which only exist electronically, and so-called bond notes, though a persistent dollar shortage has led to a precipitous decline in their value. Mnangagwa said his finance minister, Mthuli Ncube, has prepared the ground for a new currency -- starting with the first budget surplus he can recall in decades. “I’ve been in government for 38 years as minister and I can’t remember when you ever had a budget surplus,” Mnangagwa, 76, said. “Now, this young man has been able to achieve a budget surplus in less than eight months. So it tells me that what he tells me is possibly true on these issues.” The government last month agreed on measures to re-engage with the IMF for the first time in more than a decade. Under the arrangement, known as a staff-monitored program, the fund will assess government’s economic progress by the end of January, Ncube, 56, said in the interview. After that, the government plans to access bridge financing to clear about $1.2 billion of arrears to the World Bank, African Development Bank and the European Investment Bank, he said. Next, is a plan to restructure debt owed to bilateral creditors. “The first order of business is to clear the arrears and then move onto phase two, which is the bilateral discussions with the Paris Club,” Ncube said. “If it works well in the first phase, it’s the same Paris partners who control those two big institutions that I was talking about, the same people. So if they accept supporting us on the same program with the European Investment Bank, surely they will support us on the bilateral phase as well.” “Why not? We can only ask, they can only say no. But if we can get funding from the IMF that would be fantastic. Just additional support on our balance-of-payments position." And on the possibility of selling dollar debt thereafter: “It’s possible, I would say late next year. At the moment you cannot go into the Eurobond market, which is commercial debt, while you still owe concessional debt. It doesn’t work like that.” “So that’s the sequence. Once we have cleared this, at least the preferred creditors in February -- the IMF, World Bank and the European Investment Bank -- then after that point we can go into the market.” Zimbabwe’s economy grew by an estimated 3.4% last year, according to the IMF, which projects a 2.1% contraction in 2019. Growth will probably be flat this year as a power shortage curbs output, according to Ncube. Mnangagwa met with Mozambican President Filipe Nyusi this week and requested additional electricity supplies from his neighbor’s Cahora Bassa hydropower dam to help ease the deficit, he said. “We are weak on the financial side, but it is possible for us to strike a relationship where we can access the amount of power we need from Cahora Bassa,” he said. “I think that is going to be consummated very soon.” Besides power shortages, there are also self-inflicted risks to Mnangagwa’s hopes of economic revival. The IMF warned last month that the violent repression of protests in August and January set back Zimbabwe’s efforts to re-engage with its external partners. Since coming to power in November 2017, Mnangagwa has embarked on a drive to lure more foreign investment, touting attractions including the world’s third-biggest reserves of platinum-group metals, the second-biggest biggest reserves of chrome, along with deposits of gold and diamonds. Officials have announced more than $27 billion of planned investment, including a deal with Russian investors to build a $4 billion platinum mine. A stake that the Zimbabwean military held in that project posed a potential hurdle for its financing, according to people familiar with the discussions. The army is no longer a shareholder, Mnangagwa said. That could make it easier to raise the financing required. “They have moved out,” Mnangagwa said. “We have removed the Zimbabwe Defence Forces. It’s now owned by a private company. We moved out the army which had initially been part of the shareholding.” “50% is owned by the Russian company and then 50% by a local Zimbabwean company, which bought out the army,” he said. “We consummated this a few weeks ago, very recently.” On Zimbabwe’s growing gold production, Mnangagwa said: Two years ago, the country produced about 18 metric tons of gold. Last year it increased to about 33 tons, and output will probably grow to 40 tons this year. In four years’ time, the plan is to reach 100 tons of gold output yearly.
@afreximbank @KremlinRussia_E and @edmnangagwa
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21-JAN-2019 :: The Point I am seeking to make is that There is a correlation between high Inflation and revolutionary conditions 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
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Focus on Africa: Zimbabwe stock-piling weapons as strike season looms @RFI_En Africa |
Zimbabwe’s government has acquired a huge arsenal of war weapons to deal with looming street protests, as the intractable political and economic crisis deepens. The Harare-based Independent newspaper reports that it has been able to lay hands on official documents detailing the massive arms purchase described as “critical requirements” by the Interior Ministry. The weapons reportedly include more than 4000 AK-47 rifles and assorted pistols, 22000 AK magazines, 5 000 mortar bombs and millions of rounds of ammunition. The Independent, which spoke to military experts and read security and defence websites to understand the scope of the ammunition procured claims that some of the weapons labeled under the self-defense category in the procurements document were actually offensive arms. Such is the case of 7.62×51mm tracers acquired for machine guns to improve accuracy in hitting targets within a range of 1500 meters. “We are just keeping track with the latest policing trends and public order management systems," Matanga said in remarks published by the Independent. According to the newspaper, most major cities including the capital Harare went without electricity from 4 am to 10 pm on Friday, after the country’s power utility warned that normal supply will only be available twice a week.
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The Kariba Dam has towered over one of Africa's mightiest rivers for 60 years, forming the world's largest reservoir and providing reliable electricity to Zambia and Zimbabwe. Africa |
But as drought grips the region, flow on the Zambezi river has dwindled to a third of what it was a year ago. Last month, Zambia’s state-owned power utility began cutting output, unleashing daily blackouts that leave more than 17 million people in the dark. “The Kariba Dam has been absolutely essential for that region,” said Randall Spalding-Fecher, an energy adviser whose doctoral thesis included examining how climate change may impact hydropower on the Zambezi. “The challenge is the future doesn’t look like the past.” Back in Sub-Saharan Africa, Zimbabwe and Zambia are planning another dam upstream on the Zambezi to address electricity shortages. This month, they chose General Electric Co. and Power Construction Corp. of China to build the $4 billion project. The river, meanwhile, is near its lowest level in half a century. If the water level continues to fall, Zambia has warned power generation at the existing dam will be suspended entirely in September. And while droughts may come and go, the river’s future looks grim. “Unfortunately climate models are showing decreases in rainfall,” said Spalding-Fecher, who works for a Norwegian development consultancy called Carbon Limits. “The Zambezi is particularly at risk.”
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Zimbabwe and Zambia chose General Electric Co. and Power Construction Corp. of China to build a $4 billion hydropower project straddling their border, Zimbabwean President Emmerson Mnangagwa said. Africa |
The 2,400-megawatt Batoka Gorge plant has been planned for years by the two southern African nations, both of which are struggling with electricity shortages after a drought curbed hydropower output. General Electric and Power China are in a consortium that was shortlisted in February to build the facility. “Zambia and Zimbabwe have agreed on this project. We have all agreed that we give it to GE -- China Power and GE together,” Mnangagwa said in an interview in Maputo, Mozambique’s capital, where he attended this week’s U.S.-Africa Business Summit. “It’s critical that we move fast on that front because it’s necessary that as we industrialize that we need electricity.” While the project will address electricity shortages, it’s on the same river -- the Zambezi -- that has left the downstream Kariba hydropower dam at less than 30% storage capacity and producing less than half its intended electricity. The Zambezi’s water flows in 2019 are near the lowest in half a century, and even worse than during the last severe drought in 2014-15.
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.@KenGenKenya share price data Kenyan Economy |
Price: 5.94 Market Cap: $363.613m EPS:1.2 PE: 4.950
Electricity Unit Sales grew by 16% from 3,825 GWh to 4,451GWh Electricity generated from hydro plants +53% in the period under review Revenue Hydro 4.408b versus 4.097b Geothermal 8.583b versus 8.528b Wind 1.800b versus 1.729b Thermal 249m
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