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Thursday 11th of July 2019 |
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Macro Thoughts |
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Powell speaks dovish, implied probability of a #FederalReserve rate cut back to 100%. @jsblokland Africa |
Fed Chair Jerome Powell: “The bottom line for me is that the uncertainties around global growth and trade continue to weigh on the outlook,’’ while inflation remains “muted.’’ The yield on 10-year Treasuries fell as low as 2.04% after climbing above 2.10% for the first time in a month before settling around 2.06%. Two-year rates slumped while longer-dated bond yields rose. The dollar weakened versus major peers, gold topped $1,400 again and oil rose above $59 a barrel in New York. “A rate cut in July is now all but certain,” said James McCann, senior global economist at Aberdeen Standard Investments. “The strength of last week’s jobs number did lead some to think that the Fed may pause for thought. It’s clear from this that they won’t.”
Home Thoughts
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What is your biggest takeaway from this methane discovery? @NewYorker Africa |
Looking for methane is a good method to indirectly look for life. The problem is, there are chemical ways to make methane as well. It is not a perfect surrogate for life. What would people who are skeptical of the way you’re thinking about it say in response to this? They’d say that’s just stupid. [Laughs.] Because they’re saying, “Well, it had to start somewhere, and so why would you not think it started here? Why are you positing that we caught life instead of evolved it?” Because there’s clearly evidence for how life evolved in our genomes. It’s what’s called the RNA World, which was kind of the earliest form of life, and is still present in our genomes. We can see it there, and so you can discern early steps in evolution just by looking in modern genomes. In orthodoxy and all the textbooks, the RNA World—that’s kind of the precursor to the DNA world—was here on Earth four billion years ago. And I would propose, no, it was probably ten billion years ago, somewhere on the other side of the Milky Way, and it’s been spreading all across the Milky Way. So the four-billion-year and the ten-billion-year estimates—there is no scientific basis for either estimate? Is that what you are saying? No, no, no. The Earth is 4.5 billion years old. And the universe, at least based on estimates from the Big Bang, is something like fourteen billion years. So, if life evolved somewhere else, that buys you about ten billion years of time. But I’d rather it bought you a hundred billion years of time or a thousand billion years of time. That would be more satisfying. Why would it be more satisfying? Well, because it allows more time. See, the thing is, if you look in the fossil record, where’s the first evidence of life? Well, you can see evidence of bacterial life, things that look like bacteria, the things that are called stromatolites, which are a kind of blue-green algae bacteria that live in colonies. Those things form good fossils, and you can see those about three and a half billion years ago. So, life had already evolved to the point of there being pretty complicated bacteria very quickly, after the Earth cooled. And, you know, most lay people would say, “Well, yeah, duh, bacteria are pretty simple.” But bacteria are not simple. Bacteria are incredibly complicated. Bacteria are the self-replicating robots that electrical engineers dream of. These guys can make a copy of themselves in twenty minutes, with four thousand parts. So, O.K., what’s the upshot of what you’re saying about the bacteria? They were super highly evolved, and I think they got here as soon as the Earth cooled, and they just started growing. And they’ve been spreading across the Milky Way and maybe the whole universe. For example, you’ve heard about seti, right? The people who are looking for intelligent life?
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The Kalokol Pillar Site, registered as GcJh3 and also known as Namoratunga II, is an archaeological site on the west side of Lake Turkana Africa |
The Kalokol Pillar Site, registered as GcJh3 and also known as Namoratunga II, is an archaeological site on the west side of Lake Turkana in Kenya dating to the Pastoral Neolithic. Namoratunga means "people of stone" in the Turkana language. The site was originally believed to have been created around 300 BC, but recent excavations have yielded an older radiocarbon sample dating to 3890 +/- 15 BP (or 2398 +/- 44 calendar years BC).[1] The site is easily visible on the Lodwar – Kalokol roadside, 20 meters from the road. The Kalokol Pillar Site (3°25′22″N 35°48′10″E) contains 19 basalt pillars which are surrounded by a circular formation of stones. A number of other pillar sites surround Lake Turkana as well and date to the same time period; Lothagam North and Manemanya, for example, are communal cemeteries. These sites were likely built by the region's earliest herders.[2] Another burial site with stone cairns, Namoratunga I, (2°23′0.04″N 36°8′2.52″E)[3] also known as Lokori, does not have stone pillars.[4][5]
Archaeologists Mark Lynch and L.H. Robbins described the Kalokol Pillar Site in 1978 and identified it as a possible archaeoastronomical site.[6] Lynch believed the basalt pillars tie the constellations or stars to the 12-month 354-day lunar calendar of Cushitic speakers of southern Ethiopia. The pillars were said to align with 7 star systems: Triangulum, Pleiades, Bellatrix, Aldebaran, Central Orion, Saiph, and Sirius. Other archaeologists have reanalyzed the archaeoastronomical evidence,[7] and an older radiocarbon date from the Kalokol Pillar Site now calls into question these interpretations.[1]
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Taiwan president @iingwen leaves for U.S., warns of threat from 'overseas forces' Law & Politics |
Taiwan President Tsai Ing-wen left for the United States on Thursday on a trip that has angered Beijing, warning democracy must be defended and the island faced threats from “overseas forces”, in a veiled reference to China. China, which claims self-ruled and democratic Taiwan as its own and views it as a wayward province, has called on the United States not to allow Tsai to transit there on her overseas tour. She is spending four nights in the United States in total, two on the way there and two on the way back on a visit to four Caribbean allies. Tsai will go to New York on her way there, and then is expected to stop in Denver on the way back. Tsai’s time in the United States will be unusually long, as normally she spends just a night at a time on transit stops. The U.S. State Department has said there had been no change in the U.S. “one-China” policy, under which Washington officially recognizes Beijing and not Taipei, while assisting Taiwan. “Our democracy has not come easily, and is now facing threats and infiltration from overseas forces,” Tsai said, without naming any such force. “These challenges are also common challenges faced by democracies all over the world. We will work with countries with similar ideas to ensure the stability of the democratic system.” Tsai, who faces re-election in January, has repeatedly called for international support to defend Taiwan’s democracy in the face of Chinese threats. Beijing has regularly sent military aircraft and ships to circle Taiwan on drills in the past few years. Tsai last went to the United States in March, stopping over in Hawaii at the end of a Pacific tour. Seeking to bolster Taiwan’s defenses, the United States this week approved an arms sale worth an estimated $2.2 billion for Taiwan, despite Chinese criticism of the deal.
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"The Emirati drawdown should set alarm bells ringing in Riyadh. When your comrade in arms decides enough's enough, then it is time to start rethinking what exactly you are doing at the dance" @MiddleEastEye Law & Politics |
There was a time - and to the Saudi crown prince and de facto ruler, Mohammed bin Salman, it must now seem a long time ago - that a war against Yemen’s Houthi rebels sounded like a very good idea. A quick win, using Saudi Arabia’s unchallenged air superiority in the north and their ally the United Arab Emirates’ ground forces in the south, would burnish his reputation as a young warrior prince in the mould of his grandfather and founder of the modern kingdom of Saudi Arabia, Ibn Saud. It would buttress his claim to be the emerging leader of the Arab states. Unlike MBS, the Abu Dhabi crown prince had a clear strategy which he has executed pretty much to perfection. It was to secure the crucial southern port city of Aden, to lay claim to the vital island of Socotra in the Gulf of Aden, and to make common cause with the secessionist forces in the south, with a view to splitting Yemen apart into two separate countries, as it was prior to 1990. A reborn South Yemen would in effect be a client state of the UAE. This was not a strategy in isolation. Socotra, which has escaped mostly unscathed from the terrible damage inflicted elsewhere in Yemen, sits at the crossroads between the Arabian Peninsula and Asia. The UAE already has deep trading ties with India and wants to expand its energy sales to growing markets in the sub-continent. Aden, itself a very desirable port jewel, is close to the Bab al-Mandab, the narrow neck of water between Yemen and the Horn of Africa, where the Emiratis have been busy building maritime ports and military bases in Somaliland, Puntland and Eritrea. Those ports and bases are important both to enhance the UAE’s presence in the region and to provide military clout to protect Bab al-Mandab which sees nearly five million barrels of oil pass through it each day. Meanwhile MBS is stuck in a quagmire. The Houthis are a skilled and ruthless opponent; they have remained well entrenched in the capital Sanaa and in their heartland in the north of the country. They have exploited Saudi vulnerability to missile and drone attacks, most recently in a strike on the airport of the southern Saudi city of Abha, the third in a series of attacks that has killed one person and left dozens more injured. The Emirati drawdown should set alarm bells ringing in Riyadh. When your comrade in arms decides enough’s enough, then it is time to start rethinking what exactly you are doing at the dance. The Saudis have said with justification that every time they push for talks, the Houthis agree and then back out. They argue it is the Houthis, backed by Iran, who are prolonging the war. That may well be the case but the only way for MBS to extricate his country is to take the road signposted political settlement. The Houthis will not be bombed to the negotiating table. That means, I believe, a unilateral cessation of the air campaign, with a tight time frame and outside pressure to get the Houthis to the table, this time to stay.
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Law & Politics |
A British oil tanker operated by BP Plc exited the Persian Gulf and was sailing off the coast of Oman Thursday after Iranian naval vessels “impeded” it during the voyage. The British Heritage passed through the Strait of Hormuz, the oil chokepoint at the mouth of the Gulf, and was sailing along the Omani coast, according to tanker tracking data compiled by Bloomberg. The incident comes after U.K. forces arrested a tanker in Gibraltar suspected of carrying Iranian oil to Syria. “Three Iranian vessels attempted to impede the passage of a commercial vessel, British Heritage, through the Strait of Hormuz,” a U.K. government spokesman said. “HMS Montrose was forced to position herself between the Iranian vessels and British Heritage and issue verbal warnings to the Iranian vessels, which then turned away.”
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Colombia proposes coffee nations group to provide bigger influence on market @Reuters Commodities |
“We need action, because the problem is clear: there are 25 million coffee producers that can barely cover their production costs,” said Eugenio Velez, a director at Colombia’s coffee federation in the opening ceremony of the 2nd Global Coffee Producers Forum. Velez suggested that countries at the forum, which include representatives from Central and South America, Asia and Africa, join forces to try to impose some sort of supply limitations as a way to boost prices that farmers consider inadequate. Coffee prices reached the lowest levels in 12 years in May. They recovered somewhat, but are at levels considered historically low and below production costs. Farmers in the forum criticized roasters, saying they continue to sell processed coffee at high prices, paying less to producers each year. Economist Jeffrey Sachs of Columbia University in the United States presented a study on the situation of coffee farmers globally, suggesting the creation of a global fund to finance improvements both in production and social conditions. Sachs suggested that governments in producing nations, international donors and large coffee processors in developed countries such as Nestle, JDE, Lavazza and Starbucks help finance the fund. “Coffee is clearly a very profitable business for roasters, but it is not working to produce sustainable development, so there is a puzzle,” Sachs said. He said the fund could improve agricultural yields, as a way to reduce production costs, and at the same time improve living standards in producing countries. Organizers of the forum said they will take the proposal to presidents of producing countries to start up a movement toward creating the fund. The Colombian proposal on the association of producing countries, however, is less likely to advance. Brazil, for example, which is the world’s largest producer, is not a supporter. “We had that in the past, and it didn’t work,” said José Marcos Magalhaes, one of the forum organizers, referring to the International Coffee Agreement that fell apart in the 1980’s. Magalhaes believes producers need to have better knowledge of how the market works, to be able to make better deals when prices spike.
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Crypto Coffee Coin Is Coming to Brazil's Countryside Farmers @business Commodities |
Coffee farmers in Brazil’s countryside could be soon be using cryptocurrency for their day-to-day needs. A major arabica-bean cooperative, Minasul, is planning to this month launch a blockchain-based digital coin that will be backed by coffee supplies. Farmer members will be able to use the “coffeecoin” to buy fertilizer, machinery and other non-farm products, including cars and food, Jose Marcos Magalhaes, Minasul’s president, said in an interview during the Global Coffee Forum in Campinas, Sao Paulo state. Exchanging the coins for goods will take place in a digital marketplace, backed by Minasul’s store of crop nutrients, machinery and other products, he said. Farmer members will be able to acquire the currency against current and future coffee production, Magalhaes said. As much as 30% of the current harvest is eligible for exchange, 20% of the next crop, and 10% for the season after that. Allowing this type of digital financing will reduce costs for the cooperative and growers because it won’t require registration though a notary’s office, he said. The coffeecoin comes as the cooperative takes on a larger digitalization project, including allowing farmers to sell beans in mobile phone transactions. Minasul, based in the state of Minas Gerais, is one of the nation’s largest arabica-coffee cooperatives. Brazil is the the world’s biggest coffee grower and exporter.
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African Junk Bonds Are the Latest Trophy in the Global Hunt for Yield @markets Africa |
The global hunt for yields is making investors less wary about the quality of debt they’re buying. African Eurobonds, mostly rated junk, have rallied to year- or record highs this month as central banks across the globe tee up for a new round of stimulus. The notes are proving to be an attractive alternative amid the growing cohort of negative-yielding debt in Europe. “Credit ratings aren’t always a differentiating factor,” said Phumelele Mbiyo, a Johannesburg-based economist at Standard Bank Group Ltd. “One must appreciate that African Eurobonds are not divorced completely from global financial market developments. When it is risk-off globally, they sell-off. When it is risk-on, they typically rally as well.” African countries have offered six of the best ten returns this year among 74 developing nations in the Bloomberg Barclays Emerging Markets Sovereign Index. Kenya’s notes have handed investors a 20% return, almost double the 11% for the gauge. But that doesn’t mean the countries have been flocking to the market to benefit from fresh demand and cheap borrowing costs. African issuance accounts for about 10% of the $152 billion in euro- or dollar-denominated sales by emerging markets this year, a smaller share than in the similar period last year. Tunisia’s offering of seven-year debt on Wednesday tempted investors with one of 2019’s highest yields for a sovereign bond in the common currency.
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@BarrickGold fires new salvo in buyout battle for @AcaciaMining @FT Africa |
The improved results announced earlier this week by Acacia Mining are unsustainable, according to its majority shareholder Barrick Gold, which is trying to buyout the shares in the company it does not already own in an increasingly bitter takeover battle. Barrick said the 51 per cent increase in second quarter production revealed by Acacia on Monday was down to developing a very high-grade part of an underground mine at its flagship North Mara asset in Tanzania. “The improved production results . . . were achieved principally by developing and mining in the very high-grade Golden Banana 2 portion of Gokona underground mine, which at 27.5 grams [of gold] per tonne is far above the corresponding Gokona underground proven and probable mineral reserve grade of 5.53g/t,” Barrick said in a statement. “Accordingly, it is unsustainable to maintain the underground mined grade of second quarter production, especially when probable mineral reserve replenishment is only being added at a grade of 4.74g/t,” it added. Barrick’s comments mark the latest salvo in a bitter takeover battle. On Tuesday, Barrick was given an extra 10 days to make a formal offer for Acacia and get minority shareholders to back its proposed all-paper bid. Based on a report by SRK, a leading industry consultant, Acacia says it shares are worth as much as 282p a share, which is 43 per above value of Barrick’s offer. Barrick said it would meet representatives of Acacia next week to discuss the SRK report and other matters. Barrick’s says its plan to buy the 36.1 per cent of Acacia it does not already own is the only way to end a two-year row that has left the company unable to export gold from Tanzania, where it has three gold mines. In May, when Barrick first made its proposal, it was pitched at an 8 per cent discount to Acacia’s share price. Its offer currently stands at a 6.4 per cent premium but has still drawn the ire of minority investors. Odey Asset Management, Fidelity and Legal & General have all said they will not support the proposed offer. “Barrick has announced that it is due to meet with Acacia and SRK next week to discuss the report, we expect that it will continue to push back on the risking assumptions as it is unlikely to want to buy out minorities at such a premium to the current share price,” said analysts at Berenberg in a note. Shares in Acacia were 3.7p higher at 185p on Wednesday. Analysts at Numis said: “In our view Barrick has failed to convince the minorities that the proposed 0.153 exchange ratio is reasonable as it doesn’t capture either the exploration potential of the assets or the likely operational improvements that a reintegration into Barrick/resolution of the issues in Tanzania would offer.”
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