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Wednesday 21st of August 2019 |
[i carry your heart with me(i carry it in] BY E. E. CUMMINGS Africa |
i carry your heart with me(i carry it in my heart)i am never without it(anywhere i go you go,my dear;and whatever is done by only me is your doing,my darling) i fear no fate(for you are my fate,my sweet)i want no world(for beautiful you are my world,my true) and it’s you are whatever a moon has always meant and whatever a sun will always sing is you
here is the deepest secret nobody knows (here is the root of the root and the bud of the bud and the sky of the sky of a tree called life;which grows higher than soul can hope or mind can hide) and this is the wonder that's keeping the stars apart
i carry your heart(i carry it in my heart)
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Danish PM: @realDonaldTrump's idea of buying Greenland is 'absurd' @AP Law & Politics |
COPENHAGEN, Denmark (AP) — Greenland is not for sale and U.S. President Donald Trump’s idea of buying the semi-autonomous Danish territory in the Arctic from Denmark is “an absurd discussion,” Denmark’s prime minister said. Mette Frederiksen, who was visiting the world’s largest island to meet Premier Kim Kielsen, told reporters: “Greenland is not Danish. Greenland is Greenlandic. I persistently hope that this is not something that is seriously meant.” Retreating ice could uncover potential oil and mineral resources in Greenland which, if successfully tapped, could dramatically change the island’s fortunes. However, no oil has yet been found in Greenlandic waters and 80% of the island is covered by an ice sheet that is up to 3 kilometers (1.9 miles) thick, which means exploration is only possible in coastal regions. Even there, conditions are far from ideal, due to the long winter with frozen ports, 24-hour darkness and temperatures regularly dropping below minus 20 Fahrenheit (minus 30 Celsius) in the northern parts. “Thankfully, the time where you buy and sell other countries and populations is over. Let’s leave it there. Jokes aside, we will of course love to have an even closer strategic relationship with the United States,” Frederiksen said.
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Trump's Persian-Gulf Car Crash @Consortiumnews Law & Politics |
Traffic accidents normally take just a second or two. But the coming collision in the Persian Gulf, the equivalent of a hundred-vehicle pile-up on a fog-bound interstate, has been in the works for years. Much of it is President Donald Trump’s fault, but not all. His contribution has been to take an insane policy and make it even crazier. The situation is explosive for two reasons. First, the Iranian economy is in a free fall with oil exports down as much as 90 percent from mid-2018 levels. As far as Iran is concerned, this means that it’s already at war with the United States and has less and less to lose the longer the U.S. embargo goes on. Second, after Trump denounced the 2015 Iranian nuclear accord from the moment he began his presidential run, it’s all but impossible at this point for him to back down. The result is a classic collision between the immovable and the unstoppable with no apparent way out. How did the world bring itself to the brink of war? The answer, ironically, is by bidding for peace. But other regional players felt differently, Saudi Arabia first and foremost. The kingdom’s survival strategy depends on its special relationship with America, its patron since the 1940s. Hence, it was panic-stricken by anything smacking of a U.S. rapprochement with its long-standing arch-enemy Iran. The upshot was a proxy war in which the Saudis set out to roll back Iranian power by striking out at pro-Iranian forces. The offensive began after a new Saudi monarch ascended the throne in January 2015. King Salman, a doddering 79-year-old reportedly suffering from Alzheimer’s, immediately handed over the reins to his favorite son, 29-year-old Muhammad bin Salman, whom he named deputy crown prince and minister of defense. MBS, as he’s known, celebrated by launching an air war in neighboring Yemen two months later – and then disappearing on a week-long vacation in the Maldives – and by funneling hundreds of U.S.-made TOWs (anti-tank guided missiles) to Syrian rebels under the command of Al-Nusra, the local Al-Qaeda affiliate, for use in an offensive in that country’s northwest province of Idlib. For the Saudis, it was a neo-medieval crusade whose goal was to topple two religio-political allies of Iran, the Alawite-dominated government in Damascus and Yemen’s Houthis, who adhere to a non-Iranian form of Shi’ism that is no less anathema to the Sunni Wahhabist theocracy in Riyadh. President Barack Obama went along. The upshot has been Saudi wars claiming hundreds of thousands of lives in Syria and another 100,000 or so in Yemen while triggering a surge of international terrorism and the greatest refugee crisis since World War II. While reducing tensions in some respects, Obama’s efforts to reach a nuclear deal with Iran, paradoxically, caused them to explode in others. Announcing his presidential bid in June 2015, he launched into a typical Trumpian rant against China, Japan, Mexico – and Obama’s nuclear talks. “Take a look at the deal he’s making with Iran,” he said. “He makes that deal, Israel maybe won’t exist very long.” A month later, he tweeted that the agreement, just inked in Vienna, “poses a direct national security threat.” Two months after that, he told a Tea Party rally in Washington: “Never, ever, ever in my life have I seen any transaction so incompetently negotiated as our deal with Iran…. They rip us off, they take our money, they make us look like fools, and now they’re back to being who they really are. They don’t want Israel to survive, they will not let Israel survive, [and] with incompetent leadership like we have right now, Israel will not survive.” It was all nonsense. Rather than threatening the Jewish state, the treaty represented a landmark concession on Iran’s part, since Israel, with an estimated 80 to 90 nuclear warheads in its arsenal and enough fissile material for a hundred more, would maintain its nuclear monopoly in the Middle East indefinitely. Trumpian isolationism was fleeting, if it ever existed at all. Under intense pressure from neoconservatives, the Zionist lobby, and pro-Israel Democrats such as Russiagate attack dog Rep. Adam Schiff demanding stepped-up opposition with Iran, Trump did an about-face. In May 2017, he flew to Riyadh, announced an unprecedented $110-billion arms deal, and proclaimed himself the kingdom’s newest BFF – best friend forever. Thus, the confrontation is set to continue. Iran may respond by seizing more oil tankers or downing more drones, but the problem is that the U.S. will undoubtedly engage in tit-for-tat escalation in response until, eventually, some kind of line is crossed. If so, the consequences are unpredictable. U.S. firepower is overwhelming, but Iran is not without resources of its own, among them anti-ship ballistic missiles, mobile short-range rockets that can hit naval targets, plus heavily-armed high-speed boats, mini-subs, and even “ekranoplans,” floating planes designed to skim the waves at 115 miles per hour. Such weaponry could prove highly effective in the 35-mile-wide Strait of Hormuz. Iran also has allies such as Lebanon’s Hezbollah, which has an estimated 130,000 missiles and rockets in its own arsenal, Assad’s battle-hardened military in Syria, Yemen’s Houthis, and pro-Iranian forces in Shi’ite-majority Iraq. The upshot could be a war drawing in half a dozen countries or more. A confrontation on that scale may seem inconceivable. But, then, war seemed inconceivable in the wake of Archduke Franz Ferdinand’s assassination in June 1914.
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Pound May Revisit 2016 Lows as Chart Signals Turn More Bearish @markets 1.2138 International Trade |
The pound has managed to hold above psychological support at $1.20 this month even with heightened Brexit uncertainty, yet charts suggest the market may be getting ready for another stab at the level. At a time when the risk of a no-deal split with the European Union and global trade tensions weigh on sterling by fueling a sell-on-rallies bias, technical analysis is boosting the case for traders to sell downside breaks. The U.K. currency formed a bearish candle pattern on Friday, the so-called Downside Tasuki Gap, which signals the continuation of the current downtrend. The pattern is completed when the first bar extends a downtrend, the second gaps lower while the third closes higher yet within the gap of the two bars. Weekly bearish candle patterns are historically associated with fresh cycle lows and can therefore be seen as a good proxy for the currency’s short-to-medium term direction. Sterling dropped a second day Tuesday, slips as much as 0.4% to $1.2083.
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All Signs Point to an Inflection Point for Markets @markets @johnauthers International Trade |
Are we there yet?
The latest developments, for those who are getting behind or may have been on vacation, are that both Germany and the U.S. are talking about issuing more debt in the face of historically low yields. In response, stock prices rose and bond prices fell on Monday. That suggests a more delicately poised market situation than many might assume. This is how stocks have performed compared to long term U.S. Treasury bonds (represented by the most popular exchange traded funds) since the day before Lehman Brothers’ bankruptcy transformed the global financial system: Stocks remain very weak relative to bonds, holding at levels from which they have at previous points in the post-crisis equity bull market enjoyed a strong recovery. If they don’t snap back quickly, then it might start to look like the beginning of a major secular move, with stocks falling. Repeating this exercise for gold, widely regarded as a haven and a hedge against potential government profligacy, such as issuing excessive debt or printing money via quantitative easing, we see a similar picture: Viewed in terms of gold, stocks did not hit bottom until the U.S. debt ceiling crisis of 2011. Once it became clear that low yields were not sparking faster inflation and that the U.S. was not going to default, stocks enjoyed a great rally. But but at present they are no higher on this measure than they were in 2015. There has been no net growth on this score since the eve of the Chinese devaluation four years ago. As with the bonds chart, stocks appear to be poised for a turning point. But if they are not, then we could be at a tipping point, such as in 2011, when we see a big secular move out of stocks as investors accept that the bond market has been right in its concerns about the economy. What will determine which way we go? In the short term, I suspect the dollar could be the balancing mechanism. As this extraordinary chart from the credit strategists at Bank of America Merrill Lynch show, some 95% of all investment-grade corporate debt in the world that has a positive yield is in the U.S. Thus, the pressure on European fixed income managers trying to generate a return or guarantee that they can match liabilities will be to buy U.S. bonds – which will put upwards pressure on the dollar: To put that another way, the average investment-grade corporate bond outside the U.S. now carries a negative yield. That makes the sanctuary of the U.S., where yields of more than 2% are still the norm, look much more appealing: Meanwhile, the Trump administration wants a weaker dollar to aid U.S. competitiveness. Despite the Fed’s volte-face, that is not what it is getting. It is possible to overstate this, but the dollar is nearing a possible breakthrough to levels that make it less competitive than anytime in the past 15 years. This is Citigroup’s real effective exchange rate (taking into account different rates of inflation) for the dollar against a broad range of currencies over 30 years. On this measure of competitiveness, which is as good as any, the dollar is now at levels that were unremarkable in the 1990s, but render U.S. exporters less competitive than they have been for most of the time for more than a decade: But it may not be quite as binary as this. A splurge of debt issuance and government stimulus might yet set off a chain of selling in the bond market. As bonds are unprecedentedly expensive and satisfy all the normal conditions for an investment bubble, the fall-out could be severe. Less than a year ago, equity investors were alarmed by rising bond yields, not falling yields. Another way to look at it comes from Peter Atwater of Financial Insyghts. He points out that the plethora of headlines about recession risks, the desperate attempts by Trump and his advisers to shoot the messengers by blaming markets, journalists and Democrats for talking down the economy, and even cartoons in the New Yorker all suggest that a peak in sentiment is at hand. I will quote him at length because he captures the binary fork in the road ahead of us very well: Taken all together, the set up for a major “risk-on” rally looks really good here. Everyone – investors, policymakers and the media – believes that a major global recession is coming and is acting like it. Heck, even the Wall Street Journal editoral page is peeved with the White House! Could bad go to worse? Absolutely! In fact, folks like Robert Shiller would argue that all the talk of a recession will inevitably cause the recession to occur, whether we want it to or not. While that may be the case, I don’t think the markets will agree with that until substantial pain is inflicted first on those who bought bonds and sold stocks this August. Some kind of sentiment reversal is due. Should that now play out, new all-time nominal highs in the major U.S. indices would not be at all surprising. One place to watch for a potential bullish sentiment catalyst is the White House. With the 2020 Presidential Election looming large and the President’s polling figures languishing, it would not be at all surprising to see some kind of major stimulus package attempted (likely accompanied by a dialing back in anti-China/tariff rhetoric.) Again, policymakers follow mood – especially in an election year. Finally, should we see a renewed sell-off in stocks, it would suggest that rather than hitting a turning point here, we have hit an important tipping point with the equity market playing catch up to the bond market in a hurry. I don’t see that as a likely scenario, but it could happen. For all the recessionary rhetoric, the major U.S. indices still haven’t budged from their all-time highs.
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19-AUG-2019 :: Emerging and Frontier Markets have been encountering a bout of serious turbulence. Emerging Markets |
Emerging and Frontier Markets have been encountering a bout of serious turbulence. The rand [which can be viewed as a Proxy for the Global appetite for risk] is back as the world’s most volatile major currency, and options pricing suggests it’s not going to lose that status any time soon. The premium of options to sell the rand over those to buy it, known as the 25 Delta risk reversal, widened 23 basis points to 338. South Africa’s currency has depreciated 6.5% versus the dollar in August, the worst performance among emerging-market currencies after Argentina’s peso. Argentina'a MerVal Index fell 37% in a single day the largest 1-day decline in its history. This was a 17-sigma event which means that it should not have happened even once in the history of the universe (assuming a normal distribution which markets do not follow). Stock Markets from Lagos to Nairobi to Johannesburg are in reverse. There is a big negative spillover happening in front of our eyes.
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EM Currencies close to a Low set in September Last year @markets @johnauthers Emerging Markets |
The dollar, which strengthened on Monday as U.S. stocks enjoyed a good day, will be where the stresses meet, I suspect. This is JPMorgan’s index of emerging market currencies, which hit a low last September amid bad news from Argentina and Turkey, and speculation that the Federal Reserve was locked into a long-term rate-hiking cycle: Even the drastic reversal the Fed has not been enough to stop emerging currencies from plumbing the depths once again. Emerging economies are not as exposed to the dollar as they used to be, because many have made steps to increase the amount of borrowing they do in local currency, but a further run on emerging currencies will still increase the risk of an emerging-market crises. With uncertainty over trade having been amped up to such a high level, this is the last thing anyone needs.
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Zimbabwe's Rulers Find Themselves in a Trap of Their Own Making @BW Africa |
Zimbabwe’s rulers are finding that two decades of economic mismanagement and brutal repression have led them into a trap from which there’s little chance of escape. If they implement the political and democratic reforms needed to win the financial support the economy needs from international donors, they’re likely to lose the next election. If they don’t, their people, propelled by the extreme hardship brought about by austerity measures imposed by the International Monetary Fund and World Bank, may remove them through an uprising. Already a currency devaluation has slashed the value of wages by 90% in six months. That dilemma was manifest on Aug. 16 in full view of journalists and tourists watching from the terrace of the best-known hotel in the capital, Harare. Below, a crowd of about 200 demonstrators peacefully singing in protest was violently broken up by riot police, who left a woman lying unconscious in the middle of a major intersection. Less than an hour earlier, a court had ruled the gathering illegal. “The desperation of most Zimbabweans means that future sustained protest movements are likely,” says Mathias Hindar, an analyst in London at Falanx Assynt, a risk consulting firm. “Continued brutal crackdowns will thus increase the risk of Zimbabwe reaching a tipping point, similar to movements in Sudan and Algeria, where sustained protest brought down entrenched regimes.” A day before the protest, Finance Minister Mthuli Ncube sat in his office and spoke of the country’s bright future and the weekly fuel price hikes he says are needed to balance the budget. “We can declare victory on the fiscal front,” he said. “Everything that I say I implement.” A basic refrigerator retails for the equivalent of about seven months’ gross salary for a civil servant That progress is hard to see at street level. In downtown Harare, vendors line cracked sidewalks in hopes of selling their meager goods—single heads of garlic, loose batteries, and bits of ginger. “It’s not easy, but I have to look after other members of the family, including my grandmother,” says Solomon Mufandaedza as he crouches behind a sheet of plastic from which he displays pieces of ginger, small parcels of roasted peanuts, and a few avocados. The 22-year-old starts selling his wares at 6 a.m. six days a week in Harare. A basic refrigerator retails for the equivalent of about seven months’ gross salary for a civil servant, a member of the country’s middle class. Few can afford to shop for such items. Ncube, a Cambridge-trained economics professor, says the situation is similar in neighboring South Africa, where he once lived. That’s untrue. In South Africa an average monthly salary for a government worker is enough to buy six refrigerators. There’s a lot to fix. In 2000, former President Robert Mugabe sanctioned the violent takeovers of white-owned commercial farms to bolster his support in rural areas. The result was a collapse in exports, the rapid contraction of the economy, a series of famines, and a bout of hyperinflation that led the country to abandon its own currency in favor of the U.S. dollar in 2009. From 2010 to 2016, pay for the 400,000 government workers was raised to a level where it accounted for more than 90% of tax revenue. The country is saddled with $9 billion in external debt and unable to borrow more until its arrears to international creditors such as the World Bank are met. About a quarter of the population of about 14 million, once considered to be Africa’s most educated, has emigrated. Ncube was appointed in September last year by Emmerson Mnangagwa, who succeeded Mugabe as president after a coup in 2017. The finance minister introduced an unpopular tax on mobile money, reintroduced the Zimbabwe dollar in June, and boasts that the country has been running budget surpluses since January. As he sat in his sixth-floor office, he laid out an ambitious plan where the country would successfully navigate an IMF staff-monitored program, then pay off its arrears to the World Bank and African Development Bank with the assistance of the Group of Seven industrialized nations. It would then win debt relief early next year. A person familiar with the IMF’s thinking confirmed the plan, but said there’s little donor appetite for it because of the lack of progress on political reform. To add to Ncube’s woes, a drought has devastated agriculture, and the country will need to import 800,000 tons of corn, almost half its annual consumption. It’s unclear how it will pay. Slumping hydropower output has led to daily power outages of as long as 18 hours. For most Zimbabweans, Ncube’s optimism, and the recent pronouncement on national television by Mnangagwa that the country had made “truly remarkable progress” and jobs and growth will follow, are little comfort. “People are very, very angry,” says Japhet Moyo, secretary general of the Zimbabwe Congress of Trade Unions, who forecast spontaneous riots similar to looting that occurred 20 years ago. “It puzzles ordinary people. How do you have a surplus when government-run hospitals don’t have medication. What is this man talking about?”
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Zimbabwe to Issue Cash Notes Soon, Finance Minister Says @markets Africa |
Zimbabwe will issue new notes and coins soon to replace the country’s quasi currency that was introduced three years ago in a failed attempt to counter a crippling shortage of cash and that’s pushed inflation to the highest rate since 2008. The return to a fully fledged local currency exchangeable outside the country’s borders will be backed by an undisclosed amount of foreign-exchange reserves, gold and loans, Finance Minister Mthuli Ncube said in an interview on Aug. 15 in the capital, Harare. A Treasury spokesman on Monday said it first needed to compile data on the country’s reserves before commenting on how much foreign exchange would be used to back the new currency. “We already have our own local currency, but this will be the first Zimbabwe dollar notes which will trade at parity to the bond notes,” Ncube said. The southern African nation abandoned the Zimbabwe dollar in 2009, after a bout of hyperinflation, in favor of a basket of currencies including the U.S. dollar and the rand. In a bid to deal with the subsequent cash shortages it introduced so-called bond notes, and RTGS$ in their electronic form, which aren’t accepted outside the country. Ncube reintroduced the Zimbabwe dollar in June, accompanied by a ban on the use of foreign currencies. This led to a rapid erosion of spending power with the local dollar trading at almost 10 to the greenback. Bond notes were officially said to be at parity as recently as February.
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06-AUG-2018 :: The Indian Ocean Economy and a Port Race Africa |
Today from Massawa, Eritrea [admittedly on the Red Sea] to Djibouti, from Berbera to Mogadishu, from Lamu to Mombasa to Tanga to Bagamoyo to Dar Es Salaam, through Beira and Maputo all the way to Durban and all points in between we are witnessing a Port race of sorts as everyone seeks to get a piece of the Indian Ocean Port action. China [The BRI initiative], the Gulf Countries [who now appear to see the Horn of Africa as their hinter- land], Japan and India [to a lesser degree] are all jostling for optimal ‘’geo-economic’’ positioning.
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Kenya, Ethiopian Proxy War Glares Ugly Face Ahead Of Jubaland Elections @DalsanFM Africa |
Heightened tension has emerged ahead of the Thursday regional elections as Kenya and Ethiopia seemingly involved in a push and pull over perceived vested interest in the polls. A civil aviation source told Radio Dalsan that an Ethiopian plane was denied access to the Kismayo Airport by Kenyan forces creating tension between the two Amisom troops contributing countries. The Ethiopian airplane was forced to turn back but a contingent of Ethiopian troops which was already on the ground pitched camp at the entrance of the airport disrupting operations at the facility. KDF and Jubbaland forces held control of the airport, the source added. The attempts by the Ethiopian forces which further escalate the political temperatures in Kismayu and brings to the fore the regional fight for Jubbaland comes a week after Jubbaland president Ahmed Madobe turned down a plea for talks by a delegation of senior Ethiopian military and intelligence officials reportedly at the behest of the Federal Government.
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Treasury ups domestic debt target to Sh300 billion Africa |
The Treasury has raised the domestic borrowing target for the current financial year that started in July by Sh16.8 billion, hinting at a possible shortfall in projected tax revenue. Acting Treasury Secretary Ukur Yatani has in a gazette notice increased to Sh300.31 billion the fresh debt to be borrowed from domestic investors, which is 5.9 percent more than the Sh283.5 billion read in the June 13 Budget Statement by then Treasury CS Henry Rotich. The Treasury is facing a lower debt repayment burden this fiscal year with domestic maturities projected at about Sh122.58 billion, 44.37 percent less than the Sh220.4 billion that matured in the year ended June 2019.
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