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Tuesday 22nd of October 2019
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21-OCT-2019 :: "The New Economy of Anger". Africa |
The real time Feed is a c21st Netflix and is both unputdownable and
incendiary. From Chile where Protestors burned down the headquarters
of ENEL [The Electricity Generating Co] after a proposed Price
increase and a state of Emergency has been imposed. All over Latin
America from Peru to Ecuador to Haiti to Honduras, Demonstrators have
taken to the Streets. The IMF cut the projected economic growth rate
for Latin America from 1.4 percent to 0.6 percent, citing domestic
policies and the U.S.-China trade war and clearly nose-diving economic
opportunity is creating tinder-dry conditions. Of course, no country
is as extreme as Venezuela where GDP is down from $350bn in 2012 to an
estimated $60bn in 2019. People have been pushed to the Edge and are
taking to the Streets.
Paul Virilio pronounced in his book Speed and Politics, “The
revolutionary contingent attains its ideal form not in the place of
production, but in the street, where for a moment it stops being a cog
in the technical machine and itself becomes a motor (machine of
attack), in other words a producer of speed.’’
This Phenomenon about which I am speaking is not limited to Latin
America. We have recently witnessed the ''WhatsApp'' Revolution in
Lebanon, where a proposed Tax on WhatsApp calls sent up to 17% of the
Lebanese Population into the street. Iraq is on a Knife Edge. Millions
of Algerians sent the wheelchair bound Bouteflika home not too long
ago. Hong Kong remains in open rebellion and trying to shake off the
''Crusher of Bones'' Xi Jinping and his Algorithmic Control.
The Phenomenon is spreading like wildfire in large part because of the
tinder dry conditions underfoot. Prolonged Stand-Offs eviscerate
economies, reducing opportunities and accelerate the negative Feedback
Loop.
Antonio Gramsci wrote “The crisis consists precisely in the fact that
the old is dying and the new cannot be born; in this interregnum a
great variety of morbid symptoms appear....now is the time of
monsters.”
This level of unhappiness is unprecedented in a time of ''Peace'' and
in a time when our august Financial Institutions keep touting about
how it has never been so good for the Human Race.
Dr. Célestin Monga in a recent piece characterised the situation thus
The Great Discordance ''the planet is filled with rage and anger''
The New Economy of Anger ''Anger and discontent levels around the
world are high, despite the fact that most available indicators of
political and economic progress are better than they have even been''
Leadership in the c21st has become nationalistic and jingoistic,
horizons have been narrowed. President Trump is not John F Kennedy. Xi
Jinping is all about Han China. Narendra Modi is all about the
Hindutva. Boris is all about Brexit. In Africa, other than the Nobel
Prize Winner Abiy, who else is sketching out a horizon? Todays
leadership does not appreciate the humanity of all of its Citizens,
how can they appreciate the humanity of the World or as
Marshall McLuhan once put it
“There are no passengers on the Spaceship Earth. We are all crew.”
Ryszard Kapuściński wrote
“Revolution must be distinguished from revolt, coup d’état, palace
takeover. A coup or a palace takeover may be planned, but a
revolution—never. Its outbreak, the hour of that outbreak, takes
everyone, even those who have been striving for it, unawares. They
stand amazed at the spontaneity that appears suddenly and destroys
everything in its path. It demolishes so ruthlessly that in the end it
may annihilate the ideals that called it into being.”
This is a Revolution and it is a Global Phenomenon.
Ryszard Kapucinski also said: "If the crowd disperses, goes home, does
not reassemble, we say the revolution is over."
It is not over. More and more People are gathering in the Streets.
Unless we are now going to Xinjiang the Whole World [A Million People
Are Jailed at China's Gulags. I Managed to Escape. Here's What Really
Goes on Inside @haaretzcom “Children are being taken from their
parents, who are confined in concentration camps, and being put in
Chinese orphanages,” he says. “Women in the camps are receiving
inoculations that make them infertile''], the current modus operandi
is running on empty.
Macro Thoughts
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Alan B'Stard @damocrat Africa |
“The elimination of restrictive employment legislation. Quite simply,
we don’t need any. When was this country the leading industrial power
in the world? When we sent children up chimneys, women down mines and
trade unionists to Australia”
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To Autumn BY JOHN KEATS Africa |
Season of mists and mellow fruitfulness,
Close bosom-friend of the maturing sun;
Conspiring with him how to load and bless
With fruit the vines that round the thatch-eves run;
To bend with apples the moss'd cottage-trees,
And fill all fruit with ripeness to the core;
To swell the gourd, and plump the hazel shells
With a sweet kernel; to set budding more,
And still more, later flowers for the bees,
Until they think warm days will never cease,
For summer has o'er-brimm'd their clammy cells.
Who hath not seen thee oft amid thy store?
Sometimes whoever seeks abroad may find
Thee sitting careless on a granary floor,
Thy hair soft-lifted by the winnowing wind;
Or on a half-reap'd furrow sound asleep,
Drows'd with the fume of poppies, while thy hook
Spares the next swath and all its twined flowers:
And sometimes like a gleaner thou dost keep
Steady thy laden head across a brook;
Or by a cyder-press, with patient look,
Thou watchest the last oozings hours by hours.
Where are the songs of spring? Ay, Where are they?
Think not of them, thou hast thy music too,—
While barred clouds bloom the soft-dying day,
And touch the stubble-plains with rosy hue;
Then in a wailful choir the small gnats mourn
Among the river sallows, borne aloft
Or sinking as the light wind lives or dies;
And full-grown lambs loud bleat from hilly bourn;
Hedge-crickets sing; and now with treble soft
The red-breast whistles from a garden-croft;
And gathering swallows twitter in the skies.
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She always tells me to smile and put on a happy face. She says I was put here to spread joy and laughter. Law & Politics |
Arthur Fleck: I live right here, in this city, with my mother.
[the audience laughs]
Murray Franklin: Okay. Hold on. Hold on. There’s nothing funny about
that. I lived with my mother before I made it. Just me and her. I’m
that kid whose father went out for a pack of cigarettes, and he never
came back.
Audience: Aw!
Arthur Fleck: I know what that’s like, Murray. I’ve been the man of
the house for as long as I can remember. I take good care of my
mother.
[the audience applauds]
Murray Franklin: All that sacrifice, she must love you very much.
Arthur Fleck: She does. She always tells me to smile and put on a
happy face. She says I was put here to spread joy and laughter.
[the audience applauds]
Murray Franklin: I like that. I like that a lot. Come on down. Come
on. For that, you got to come down.
[Arthur joyfully joins him on the stage as the audience claps for him]
[as Arthur is continues his fantasy of meeting Murray on his show]
Murray Franklin: That was great, Arthur. Thank you. I mean, I loved
hearing what you had to say, it made my day.
Arthur Fleck: Thanks, Murray.
Murray Franklin: But, you know, this stuff, the lights, the show, the
audience, all that stuff, I’d give it all up in a heartbeat to have a
kid like you.
[Arthur smiles and hugs Murray lovingly]
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Mark Rothko Untitled c.1950-2 @Tate Modern Africa |
In his mature work, Rothko abandoned specific reference to nature in
order to paint images with universal associations. By the late 1940s
he had developed a style in which hazy, luminous rectangles float
within a vertical format. Rothko wrote that the great artistic
achievements of the past were pictures of the human figure alone in a
moment of utter immobility. He sought to create his own version of
this solitary meditative experience, scaling his pictures so that the
viewer is enveloped in their subtly shifting, atmospheric surface.
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Inside the battle for Hong Kong @FT Law & Politics |
When the United Kingdom handed over Hong Kong to China in 1997, Nick
Wu was barely five years old. He grew up in a conservative,
working-class family in the territory and, on graduating from
university, found a job in marketing. This summer, when pro-democracy
demonstrations erupted, he became a front-line protester.
For more than four months, Wu, a mild-mannered, bespectacled
28-year-old, has spent his weekends in a gas mask and helmet, fending
off tear gas, pepper spray and prying police cameras, as he dodges
rubber bullets, bean-bag rounds and beatings.
It wasn’t always like this. In 2014, while at university, he
participated in 79 days of mostly peaceful protests when pro-democracy
activists occupied parts of central Hong Kong in what became known as
the Umbrella Movement.
“During Umbrella, we didn’t escalate our protests so we failed. It was
stupid — we sat, holding hands, waiting for the police to take us away
one by one. It’s kind of funny to look back on it now,” he says.
“We believed in the system then, we thought our votes could make a
difference. But now we’ve learnt the system is stacked against us so
we’ve become less peaceful. We’ve lost patience.”
Wu is one of hundreds of thousands of people caught up in this moment
of global significance. His ostensible adversaries are Hong Kong’s
police and government.
But everyone knows that in reality, the protesters’ actual foe is
China, a bristling superpower with the world’s largest army and a
furious leadership that has likened the demonstrations to terrorism.
The protests, which began in June and have plunged the former British
colony into its worst political crisis in decades, represent the
biggest insurrection on Chinese soil since the pro-democracy movement
in 1989, which eventually led to the Tiananmen Square massacre, when
the Chinese Communist party ordered its troops to kill hundreds —
perhaps thousands — of people in Beijing.
The stakes for China’s future — and the way in which the world
interacts with the superpower — could hardly be greater.
If Wu and his fellow protesters prevail in wresting concessions for a
more democratic future for Hong Kong, it would indicate that Beijing
is ready to tolerate diversity. If it cracks down again, as it did in
1989, it will not only jeopardise the viability of Asia’s financial
hub but also create a new crisis in relations between China and the
west.
One thing is certain: this youth-led movement of people fighting on
the streets for democracy against the world’s most powerful
authoritarian state has changed Hong Kong for ever.
To many, the protesters’ position appears hopeless, as demonstrators,
some not yet teenagers, battle tear gas and even gunfire, often with
just umbrellas and hard hats.
“If we burn, you burn with us” has been one of their rallying cries —
an ominous quote from the dystopian teenage fiction series The Hunger
Games, in which young people launch sometimes suicidal missions
against an all-controlling government.
This is a movement that erupted from a place of frustration and anger,
rather than because protesters believed they could win a fight against
the Chinese Communist party.
“I don’t think the Hong Kong people stand a chance of winning against
the government — they’re experts, they have the resources, it’s not a
fair fight,” says Wu, the first time I meet him in August.
Beijing risks losing the hearts and minds of several generations — not
just the young — and faces growing, if nascent, calls for Hong Kong
independence, despite China’s vehement opposition to any separatist
movements on its soil.
For the Chinese Communist party, Hong Kong’s value lies in it being an
international financial centre and a gateway connecting China and the
world.
What began as protests in June against a controversial bill that would
have allowed criminal suspects in Hong Kong to be extradited to
mainland China has now become a fight for genuine, universal suffrage
and a battle over the future of the territory.
“But the Chinese government has to do something to show that our trust
is worthwhile and that what we believe in — sticking up for ‘one
country, two systems’ — is meaningful . . . If they continue to
escalate the situation, it’s going to drive more and more moderate
people towards the radical bunch.”
For many front-line protesters today, Leung is the closest thing to a
spiritual guide. He coined the slogan “Liberate Hong Kong, Revolution
of Our Times”, which now rings out at all hours across the city.
“Edward planted the seed that protests can be violent and we Hong Kong
people have the ability and the duty to fight for our own city, to
fight against China’s influence,” said Nora Lam, 24, director of Lost
in the Fumes, an award-winning documentary about Leung that has been
hugely influential among protesters.
Opinion polls also show the number of people identifying as Hong
Kongers rather than Chinese has hit record highs.
Summer has turned into autumn the next time I meet Wu. “We have a new
anthem,” he says. “Have you heard it?” How could I not have? Since the
start of September, “Glory to Hong Kong” has rung out across the city,
at football matches and in shopping malls.
“What I was trying to portray in the film was [that] Edward was just
another young person in Hong Kong who has the same problems as us
growing up — chasing your dreams and having them crushed, not knowing
what to do after graduation, suffering from depression,” she explains.
“The sense I get is most people our age support independence but
people in their thirties and forties don’t. There are two overwhelming
emotions among our generation — helplessness and this sense of ‘if we
burn, you burn with us’,” Fong tells me.
Popular mottos include “Don’t distance yourself, don’t snitch” and
“Together we climb the mountain, each in our own way,” conveying
solidarity between radical front-line protesters and moderate,
peaceful ones.
At a Saturday rally arranged by and for high-school students, protest
songs ripple through the humidity as students wheel out Lady Liberty,
a hulking statue with a school backpack waving a flag which reads
“Liberate Hong Kong! Revolution of Our Times!”
“It is much more important Hong Kong becomes a democracy than China
becomes a democracy.”
“How can you change Hong Kong without changing China? In terms of the
economy, political influence, everything is interconnected,” she says.
Looming over the current unrest is the question: what happens next?
China promised Hong Kong a high degree of autonomy until 2047 but
fears are growing that the “one country, two systems” framework will
soon become “one country, one system”.
“2047 is a metaphor. 2047 may well happen in 2025 or 2030, it could
happen this year if the [Chinese military] marched over the border,”
says Samson Yuen, a political scientist at Lingnan University.
Protesters fear a worst-case scenario, in which Hong Kong becomes a
new Xinjiang, a high-tech surveillance state where at least one
million mostly Muslim minorities are held in internment camps.
In Hong Kong, anxieties are also growing about the influx of mainland
Chinese sweeping through the city. One hundred and fifty are granted
residency every day.
“The conflicts between mainland Chinese and Hong Kongers are becoming
more widespread . . . the worst thing is we don’t have a population
policy, we can’t control how many people come from China,” argues Au
Nok-Hin, a pro-democracy lawmaker who was recently charged with
assaulting police officers’ ears because he talked too loudly into a
loudspeaker.
In early October, Wu and I meet by the harbour, a day after Hong
Kong’s government invokes colonial-era emergency laws to ban
protesters from wearing face masks — the first time the rules have
been used in more than half a century.
The seed has been planted.” He looks around to make sure no one else
is listening: “We’re heading towards civil war.”
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The Interim Balance Sheet of Democracy A Machiavellian Memo Celestin Monga @CelestinMonga University of Paris 1 Pantheon-Sorbonne and Peking University Law & Politics |
Every Tuesday morning, the heads of intelligence agencies and the
National Security Adviser of the United States gather around the
American president in the Situation Room at the White House in
Washington D.C. They discuss the most confidential document in
American politics: the list of people in various places in the world
who are considered dangerous “threats” or “terrorists,” cannot or
should not be captured, and are recommended for secret assassination.
Sometimes the list includes the names, pictures, and profiles of
American citizens and even minors who national security experts in the
executive branch of the US government believe should simply be killed—
not arrested and brought to trial in the US or elsewhere. The evidence
against these suspects is classified and therefore not to be shown to
a judge.
The confidential list of suspects is officially called the
"Disposition Matrix"—a name that even George Orwell could not have
imagined in his famous novel 1984. Decisions are made quickly, after
the president has listened for a few minutes to the opinions of his
small staff around the table.
As noted by Greenwald, “The president's underlings compile their
proposed lists of who should be executed, and the president - at a
charming weekly event dubbed by White House aides as "Terror Tuesday"
- then chooses from "baseball cards" and decrees in total secrecy who
should die. The power of accuser, prosecutor, judge, jury, and
executioner are all consolidated in this one man, and those powers are
exercised in the dark.” (Greenwald 2013)
If whoever holds power in the Oval Office can serenely wiretap the
cell phones of several German Chancellors or that of the President of
Brazil, none of them suspected of being a potential “terrorist,” what
would prevent the leaders of Russia, China, Indonesia, Venezuela, or
Burundi, from using similar tactics?
Digital computation is “ a force that produces and serializes
subjects, objects, phenomena, but also consciences and memories and
traces, which can be coded and stored which are capable of
circulating'' Mbembe 2019)
With the interconnectivity of economic and financial systems,
increasingly sophisticated algorithms, faster and more powerful
computational instruments, and progress in artificial intelligence,
almost all countries now have unbridled access to national databases
in other countries. This makes all nations vulnerable and governments
concerned.6
The world is therefore getting used to violent forms of “freedom” and
“democracies,” from above (totalitarian elites) and from below
(populist movements). Both the new “democratic” totalitarianism and
the “riot democracies” (démocracie de l’émeute, as French President
Emmanuel Macron referred angrily to the Yellow Vest movement9) are
fueled by economic and identity fears.
“Humanity is on the verge of being reborn in a second form thanks to
an intrinsic transformation of the horizon of calculation and an
almost indefinite expansion of the apparatus of quantification.”
(Mbembe, 2019)
This paper is about the need for intellectual reckoning. It starts
with a commentary on what I call the great discordance—the paradoxical
gap between secular improvements in democratization and economic
wellbeing and the still high levels of citizen anger and disillusion
around the world (Section 2). It then discusses the global,
unsustainable democratic deficit, and explores its foundations—from
the original sins of democracy to today’s democratic trilemma, which
is the impossibility of building democratic systems which are ethical,
based on efficient political institutions and universal suffrage
(Section 3). The paper ends with the conclusion that the main law of
economics is to constantly subvert politics in ways that cannot allow
democracy to be more than an abstract ideal (section 4).
2. The Great Discordance
Human societies everywhere are experiencing a great malaise. Despite
the undisputable acceleration of the pace of technological innovations
in the past three centuries, which has brought enormous economic gains
to the world, raised global income, and improved welfare and the
quality of life globally, despite improvements in self-reported levels
of happiness in a handful of countries, the planet is still filled
with rage and anger. People in countries at all income levels are
expressing deep levels of mistrust and dissatisfaction vis-à-vis the
quality and effectiveness of their elected political leadership, their
formal institutional systems, and the prevailing rules of the
game—which they have often validated through free and fair elections.
This section discusses the new global economy of anger and its
paradoxical explanations, mainly in economic terms (the feeling of
rising inequality).
A. The New Economy of Anger
Anger and discontent levels around the world are high, despite the
fact that most available indicators of political and economic progress
are better than they have even been. This deep paradox reflects a
great discrepancy: by all accounts, the world has never been a
“better” place to live. On the broad historical front, empirical human
being living today is much less likely to meet a violent death, or to
suffer from violence or cruelty at the hands of others, than people
living in any previous known period of world history. Studies of the
causes of death in different eras and regions yield surprising
results: analyses of skeletons found at archaeological sites suggest
that 15 percent of prehistoric humans met a violent death at the hands
of another person (Pinker 2011).
By contrast, in societies organized around states with some forms of
government, the most violent appears to have been Aztec Mexico, in
which 5 percent of people were killed by others. The violent 13th
century Mongol conquests alone caused the deaths of an estimated 40
million people— equivalent to 280 million people today. During the
bloodiest periods of European history (the 17th century and the first
half of the 20th), deaths in war were “only” around 3 percent. This
“pacification process” (Pinker) was brought about by the state
monopoly on the legitimate use of force. It confirmed Hobbes (1651)’s
view that in the absence of a state, life is likely to be “nasty,
brutish and short.” Empirical evidence shows that today’s world is
less violent, less cruel and more peaceful than any previous period of
human existence.
For instance, the chance of anyone living in Europe being murdered is
now less than one-tenth, and in some countries only one-fiftieth, of
what it would have been if they had lived 500 years ago.
Parallel to the struggle to consolidate democracy is the well-observed
disillusionment: participation in politics and in elections has been
lower than one would have expected in many countries, while the
ability of political parties and trade unions to mobilize voters and
citizens has been declining11.
In sum, just looking at the deep trend as measured by empiricists,
global happiness should be on the rise, perhaps even exponentially.
Yet, sociopolitical well-being in various places around the world (in
high- and low-income countries) and has been marked recently mainly by
anger, resentment, fears, identity conflicts, and the resurgence of
populism and xenophobia.
How could this be? What explains the great discordance about the
steady improvements in global political, economic and social welfare
reported by empiricists, and the recent eruptions of anger observed in
many places around the world?
Yet the innate inability of human beings to look past their
intrinsically self-centered natures, their shifting egos and psyches,
their unstable preferences, the impossibility to steadily define their
own tastes, feelings, and opinions, and the structural limitations of
any attempt to consistently capture and aggregate the criteria for
common wellbeing, make interpersonal comparisons of political
well-being a permanent challenge.
He saw the end of the Cold War as an ambivalent event, which brought
national liberation and the promise of better living standards to many
people in Eastern Europe, but also traumatic for others through the
rise of vicious nationalism, wars, unemployment and disastrous
declines in income. His discomfort with triumphalism surrounding the
fall of the Berlin Wall was compounded by the rather enjoyable
memories he had of his childhood in former Yugoslavia: he never had to
deal with collectivization, killings, political trials, endless bread
lines, imprisoned free thinkers and other stories that are currently
published in literary magazines. To the contrary, he remembers “long
dinners discussing politics, women and nations, long Summer vacations,
foreign travel, languid sunsets, whole-night concerts, epic soccer
games, girls in mini-skirts, the smell of the new apartment in which
my family moved, excitement of new books and of buying my favorite
weekly on the evening before the day days at the end of the Cold War
and the when it would hit the stands...”
As Rothman (2018) put it, “if being alive now doesn’t feel
particularly great, perhaps living in the past might not have felt
particularly bad. Maybe human existence in most times and places is a
mixed bag (...) By an obscure retrospective calculus, the good appears
to balance out the bad. Frightening events seem less so in retrospect.
Memory is selective, history is partial, and youth is a golden age.
For all these reasons, our intuitive comparisons between the past and
the present are unreliable.”
Others have attributed recent turmoil to the exponential development
of technology in the age of enhanced globalization, with the infinite
new ways of using new digital tools and platforms and even artificial
intelligence to heavily influence and manipulate political actors and
determine political outcomes.
Few researchers have questioned the continued validity and relevance
of the very abstract notion of democracy in a world where all its
theoretical foundations and assumptions and its practical
prerequisites (clearly defined citizenship acting freely on the basis
on accurate information, well- functioning and neutral judiciary and
administrative technostructure, etc.) are clearly unstable and often
unreliable. Without a reexamination of the preconditions and
requirements for democracy to mean more than a nice ethical horizon,
analyses of the current “crisis” mainly reveal a broad intellectual
malaise.
In his exploration of effective and ethical forms of government, Plato
noted in The Republic that democracies emerge as a result of
discontent with oligarchy. But he quickly warned that democracies are
susceptible to “tyranny of the majority” and rule by demagoguery for
those who can subvert and use the institutions to their advantage
(Sterling and Scott 1985).
Plato even saw democracy as potentially more dangerous than oligarchy,
as it motivates the anger of the poor (the largest social group)
against the wealthy rulers, which eventually leads to anarchy and
chaos.
A good indication of this is the trivial fact that few candidates
would be elected to high office in any advanced democracy by
campaigning on a fully truthful platform about the policies they
actually intend to implement if elected.20
The quest for democracy should therefore account for the free-rider
problem. Negative externalities also occur when one person’s actions
harm another. When polluting, factory owners may not consider the
costs that pollution imposes on others....
The weak correlation between schooling and democratic ethics is even
more apparent when one looks at India, the most populous and therefore
“largest democracy in the world.” One can only be puzzled by the deep
sociopolitical trends observed there in recent decades. Despite
failing to deliver on his 2014 campaign promises to bring stronger
economic growth to India and rid the country of corruption and
dynastic politics, Prime Minister Narendra Modi was reelected in 2019
with an even greater mandate. During his first term, his government
had to weather the fallout from a disastrous demonetization scheme.
Ethnic violence also increased significantly—fueled with the rise of
Hindu nationalism (Hindutwa). As perplexed political experts searched
for explanations, Sharma (2019) commented: “We do not live in Modi’s
India. We live in Indians’ India, and the reason so many Indians adore
Modi is because he represents their preferred conception of the Indian
nation. No other explanation for [his] results is as compelling.”
One would have thought that some 2,422 years after the Greeks
articulated the need to associate the notions of “demos” and “kratos”,
more than 800 years after the Magna Carta, 243 years after the
American Revolution, and nearly three quarters of a century after the
adoption of the Universal Declaration of Human Rights by the
“international community,” human societies must have articulated and
learned enough about democratic forms of governments to be able to
formulate and implement a broadly accepted consensus on what the
fundamental principles and modus operandi are. One would have expected
that philosophers, political theorists, and other social scientists
would have offered by now a robust framework for comparative analyses
of the levels and effectiveness of democratization processes around
the world.
What conclusion can be drawn from all this? What should a developing
country tyrant do to find acceptance as a legitimate member of the
club of world leaders committed to the virtues of “democracy” and the
rule of law? The Machiavellian straightforward answer is that building
or advertising the wealth of his nation and picking his allies among
the super-powers are the real criteria for being granted membership in
the democracy club.
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"Why do some British people not like Donald Trump?" Nate White wrote the following response hobbledehoy Law & Politics |
A few things spring to mind. Trump lacks certain qualities which the
British traditionally esteem. For instance, he has no class, no charm,
no coolness, no credibility, no compassion, no wit, no warmth, no
wisdom, no subtlety, no sensitivity, no self-awareness, no humility,
no honour and no grace – all qualities, funnily enough, with which his
predecessor Mr. Obama was generously blessed.
So for us, the stark contrast does rather throw Trump’s limitations
into embarrassingly sharp relief.
Plus, we like a laugh. And while Trump may be laughable, he has never
once said anything wry, witty or even faintly amusing – not once,
ever.
I don’t say that rhetorically, I mean it quite literally: not once,
not ever. And that fact is particularly disturbing to the British
sensibility – for us, to lack humour is almost inhuman.
But with Trump, it’s a fact. He doesn’t even seem to understand what
a joke is – his idea of a joke is a crass comment, an illiterate
insult, a casual act of cruelty.
Trump is a troll. And like all trolls, he is never funny and he never
laughs; he only crows or jeers.
And scarily, he doesn’t just talk in crude, witless insults – he
actually thinks in them. His mind is a simple bot-like algorithm of
petty prejudices and knee-jerk nastiness.
There is never any under-layer of irony, complexity, nuance or depth.
It’s all surface.
Some Americans might see this as refreshingly upfront.
Well, we don’t. We see it as having no inner world, no soul.
And in Britain we traditionally side with David, not Goliath. All our
heroes are plucky underdogs: Robin Hood, Dick Whittington, Oliver
Twist.
Trump is neither plucky, nor an underdog. He is the exact opposite of that.
He’s not even a spoiled rich-boy, or a greedy fat-cat.
He’s more a fat white slug. A Jabba the Hutt of privilege.
This song about Donald Trump just won a BBC Folk Music Award as Best
Song | Listen on The Hobbledehoy
And worse, he is that most unforgivable of all things to the British: a bully.
That is, except when he is among bullies; then he suddenly transforms
into a snivelling sidekick instead.
There are unspoken rules to this stuff – the Queensberry rules of
basic decency – and he breaks them all. He punches downwards – which a
gentleman should, would, could never do – and every blow he aims is
below the belt. He particularly likes to kick the vulnerable or
voiceless – and he kicks them when they are down.
So the fact that a significant minority – perhaps a third – of
Americans look at what he does, listen to what he says, and then think
‘Yeah, he seems like my kind of guy’ is a matter of some confusion and
no little distress to British people, given that:
• Americans are supposed to be nicer than us, and mostly are.
• You don’t need a particularly keen eye for detail to spot a few
flaws in the man.
This last point is what especially confuses and dismays British
people, and many other people too; his faults seem pretty bloody hard
to miss.
After all, it’s impossible to read a single tweet, or hear him speak a
sentence or two, without staring deep into the abyss. He turns being
artless into an art form; he is a Picasso of pettiness; a Shakespeare
of shit. His faults are fractal: even his flaws have flaws, and so on
ad infinitum.
God knows there have always been stupid people in the world, and
plenty of nasty people too. But rarely has stupidity been so nasty, or
nastiness so stupid.
He makes Nixon look trustworthy and George W look smart.
In fact, if Frankenstein decided to make a monster assembled entirely
from human flaws – he would make a Trump.
And a remorseful Doctor Frankenstein would clutch out big clumpfuls
of hair and scream in anguish:
‘My God… what… have… I… created?
If being a twat was a TV show, Trump would be the boxed set.
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Neil Woodford: the inside story of his rise and dramatic fall @FT International Trade |
The Crazy Bear in Stadhampton, an hour’s drive from London, was the
perfect setting to celebrate Britain’s most successful investment
company launch. Garish chandeliers hung between wooden beams as guests
jostled for space among the ice buckets filled with magnums of
champagne. At the centre of the bar was Neil Woodford, the UK’s
best-known stockpicker. By his side was Craig Newman, his ambitious
business partner and minder. Giddy optimism filled the air. “Things
got really out of control — people were absolutely hammered,” says one
person who was there. It was May 2014 and the pair had recently left
their longtime employer, Invesco Perpetual, to set up on their own.
The launch of Woodford Investment Management was a resounding success.
In just three months, the company’s founders had navigated the
fiendish regulatory application process, gaining approval in
near-record time. Meanwhile, a handful of financial institutions, made
rich by Mr Woodford over two decades, agreed to move billions of
pounds to the new venture. St James’s Place, the popular wealth
manager, chipped in £3.6bn. Having spent years battling colleagues
and bosses at Invesco, Mr Woodford and Mr Newman were finally free to
build their own business the way they wanted — away from restrictive
compliance managers with the power to rein in risky investments. The
party carried on until 4am. Hours later police were called to the
Woodford offices in a dreary business park on the outskirts of Oxford.
A senior employee, still heavily intoxicated, was seen driving his car
around the car park. The police arrested Grant Wentzel, Woodford’s
head of trading, who had been behind the wheel. Mr Wentzel, who
declined to comment, was acquitted of the drink-driving charge. Mr
Woodford’s career is a story packed with spectacular highs and
crashing lows — the star fund manager who fell to earth. Once
described as the investor who made Middle England rich and “the man
who can’t stop making money”, he was forced this week to close his
business, which once managed £15bn, after trapping hundreds of
thousands of savers in his flagship fund and sparking Europe’s biggest
investment scandal for a decade.
His dramatic downfall is about more than a high-powered financier who
lost his midas touch. It is a tale of hubris, obstinate conviction and
misplaced loyalty. It exposes the flaws of a timid regulator and an
industry in thrall to its star performers. Over four months, the
Financial Times interviewed dozens of Mr Woodford’s former colleagues,
business contacts, clients and friends — and gained access to a trove
of confidential documents — to build up a detailed picture of an
investor who became a household name, how he fell from grace and how
much investor money has been squandered.
The early years
Neil Woodford was born in 1960 and grew up in Berkshire, the son of a
postcard printer. After studying economics and agricultural economics
at Exeter university, he began investing at Perpetual, an upstart fund
management business in the genteel surroundings of Henley-on-Thames,
in the late 1980s. It was here he established his reputation as a
contrarian fund manager who took bold bets on unloved companies. Some
of his biggest calls paid off spectacularly — including avoiding
technology companies during the dotcom bubble and selling out of banks
in the run-up to the financial crisis. His faith in controversial
businesses such as tobacco companies long after they were seen as
toxic by more ethically driven rivals also boosted returns. During his
26 years managing money in Henley, Mr Woodford built one of the
strongest performance records among UK-focused investors. Savers who
invested £1,000 with him in 1988 saw their pots grow to more than
£25,000 over 25 years. He was a favourite of the personal finance
pages, eventually marshalling £33bn of life savings for hundreds of
thousands of British investors.
“Having the strength of character to maintain this conviction during
times when it was seriously questioned by others is what built Neil’s
reputation over a long period of time,” says Andy Bell, founder of
fund distributor AJ Bell, in which Mr Woodford was an early investor.
His influence was on show in 2012 when, as the largest shareholder in
FTSE 100 defence company BAE Systems, Mr Woodford spoke out against
its planned merger with EADS, the owner of Airbus. His intervention
helped scupper the €35bn mega-deal. A year later, he received a CBE in
the Queen’s birthday honours list for services to the economy.
The fund manager’s success belied problems brewing within his company.
In 2000 the Perpetual business had been bought by Invesco, one of the
world’s largest money managers. A clash of cultures developed. US
executives based in Invesco’s Atlanta headquarters viewed the UK
office as a regional outpost within the global empire, whereas Mr
Woodford and his fellow Henley fund managers saw themselves as the
superstars who had built up the business through their exceptional
talents. Invesco’s American managers feared the UK division was too
reliant on Mr Woodford’s personal brand and wanted to grow other
products. Yet Mr Woodford’s bonuses were heavily skewed towards
attracting more money into his fund. While Mr Woodford had tight-knit
relationships with his UK equity fund managers, often socialising and
even holidaying with them, hostilities with the Atlanta executives
were rising. The fund manager became embittered towards Invesco’s
leadership, whom he blamed for restricting the growth of his fund and
crimping his bonus. “It was always ‘the fucking Americans’,” says one
former friend. Mr Woodford’s resentment eventually spread to his
teammates. He appeared to believe he was solely responsible for the
billions that poured into Invesco’s British funds and that his
colleagues were riding on his coat-tails. He began to distance himself
from them. Rather than sitting on the same desk with his team and
engaging in discussions about markets, Mr Woodford ordered a glass
office to be built where he could shut himself off, according to two
former Invesco colleagues.
His anger frequently bubbled over and affected the mood in the Henley
office. A former colleague remembers how the heavy-set former rugby
player would refuse to use his security pass when entering meeting
rooms with magnetic locks on the door. “If he was angry he would just
rip it open. You would hear this shuddering,” says the former
colleague. “You can imagine the facilities team at Henley, how many
magnetic locks they must have replaced.”
Moon-shot bets
Around 2010, Mr Woodford began taking an interest in investing in
small, private companies that offered opportunities for exponential
growth. This was a big departure from the large unfavoured companies
on which he had built his reputation. But having more than £30bn at
his disposal, writing some large cheques to back a handful of
moon-shot bets seemed a gamble worth taking. One company that caught
his eye was US biomass conversion group Xyleco, whose board included
former US secretary of state George Shultz and former US energy
secretary Steven Chu. In March 2012 Mr Woodford agreed to invest $252m
in the company for a stake of less than 7 per cent, which valued the
business at more than $3.5bn, according to documents seen by the
Financial Times. This was a staggering amount for a company that was
little more than a collection of scientific patents. When the managers
in Atlanta found out about the investment they were alarmed and
decided they needed to prevent Mr Woodford from taking any more risky
punts. They created an internal committee to assess investments in
private companies — which excluded the fund manager. The UK watchdog,
the Financial Conduct Authority, had also caught wind of Mr Woodford’s
more adventurous instincts. Between May 2008 and November 2012, the
FCA noticed three Invesco funds had taken on excessive risk and too
much debt, resulting in losses of £5m for clients. Two of the funds
were managed by Mr Woodford. The regulator began an investigation into
the breaches. Mr Woodford was not the only Invesco employee who felt
betrayed by the company’s decision to promote other funds. Mr Newman,
who, as head of retail sales was responsible for selling Woodford
funds, was also in line for a smaller bonus. Sensing Mr Woodford’s
frustration with Invesco, Mr Newman persuaded the stockpicker to leave
and set up on their own. Mr Newman was challenged after lists of
client and sales information were allegedly taken from Invesco and he
resigned. The contentious documents, seen by the FT, contained details
of how much institutions had invested with Mr Woodford at Invesco and
estimates of fees the new company could extract out of them. A
Woodford spokesman says Mr Newman denies any wrongdoing and resigned,
adding that the terms of his departure were subject to a
confidentiality agreement. Invesco says Mr Newman resigned on May 31
2013 and it could not comment on any details of staff departures. Mr
Newman threw his energy into the launch of the new investment company.
But he needed Mr Woodford to convince former clients to move their
money. “Craig is 100 per cent money-driven. Neil was very well paid at
Invesco, but Craig managed to convince him that Invesco weren’t
looking after him,” says a person who has worked with both men. The
plans for Woodford Investment Management were in motion.
The break away
When Mr Woodford informed Invesco he was leaving to set up his own
business in late 2013, he managed to negotiate an incredible deal. Not
only did he avoid signing a non-compete agreement, which is common
when high-profile employees go solo, but he also arranged to retain
management of large sums of money for the group right up until his new
venture launched. Mr Woodford and Mr Newman, who despite a lack of
senior management experience would become chief executive of the new
business, drafted in Nick Hamilton, who had worked with the pair as
head of global equity product at Invesco, and Gray Smith, a lawyer
from London firm Mishcon de Reya who had worked for Woodford during
the FCA investigation. It was agreed the four of them would lead the
new business, each becoming a partner. Mr Woodford also convinced a
handful of junior analysts to join him. The application process “shot
through with very little challenge”, says one person involved at the
time. That was despite the investigation by the regulator into Invesco
rule breaches, which resulted in an £18.6m fine for the company days
before the fund manager launched his new business. The FCA says it did
not find any evidence to suspect or take action against individuals.
“Given there was no sanction against an individual, the FCA authorised
Woodford in line with its standard processes.” Meanwhile in Mr
Newman’s application for regulatory authorisation, seen by the FT, he
provided no details of his abrupt departure from Invesco. When asked
whether he had ever been “the subject of an investigation into
allegations of misconduct or malpractice in connection with any
business activity”, he responded “no”. Woodford Investment Management
says Mr Newman’s form was completed properly with the benefit of legal
advice and in accordance with his obligations.
Money flows in
By May 2014, Woodford Investment Management was up and running and
money began to gush in. Mr Newman’s “violent transparency” policy — a
rare approach, later dismantled, that gave clients detailed access to
investment information, including the funds’ complete list of holdings
— would be well received by investors and advisers, as would the
business’s clear fee structure. Several large clients from Invesco
followed Mr Woodford to his new home in the Oxford business park,
including more than £200m from the Kent county council pension fund.
Mr Woodford’s sales team expected to make more than £3m a year in fee
income from the latter alone, out of total revenue of £15m from
institutional clients. This did not include the money expected from
the armies of retail investors that intermediaries such as St James’s
Place and Hargreaves Lansdown, the fund supermarket, brought with
them. Woodford was soon managing more than £5bn — an incredible start
for a business just a few weeks old. Up to that point, the hard work
had mostly been carried out by the legal and operations team. Almost
all the money that had flowed in was from Invesco clients. But despite
there being hardly any new business, Mr Newman soon lavished his
handful of sales staff with bonuses totalling more than £1m. The two
team managers each received £350,000, while more junior sales staff
were given £184,000 each. Mr Newman and Mr Woodford also treated
themselves. Mr Woodford bought himself a Ferrari and, as an added
perk, the carmaker let him visit its private test track in Maranello,
northern Italy, to try out the model. Mr Newman joined him. The trip
prompted some resentment from others on the team — particularly those
who had missed out on the bonuses. “It was a two- or three-day boys’
trip at what was a pretty busy time,” recalls one former colleague.
Tensions were also brewing between the founders. Despite assurances
that the company would be run by four partners, Mr Hamilton and Mr
Smith were pushed out.The new business was going to be a two-man show:
Mr Woodford and Mr Newman. In an echo of the problems at Invesco, Mr
Smith and Mr Hamilton began challenging the way Mr Woodford and his
team of junior analysts were valuing small private companies, which
relied heavily on data the businesses provided themselves. They tried
to put a limit on the fund’s assets in private companies, well below
the 10 per cent cap defined by regulations. Woodford’s unsuccessful
battle to keep below that cap was a central factor behind his
subsequent downfall. “This is not a fucking control environment, this
is about giving Neil the freedom he did not have at Invesco,” Mr
Newman told a colleague at the time. In tense meetings between the
four founders, viewed through the glass meeting room partition by the
rest of the company’s staff, Mr Newman would pace around blasting
obscenities. “There was plenty of shouting, swearing, using every
expletive, for an hour or two at a time,” says a witness. All the
while Mr Woodford silently simmered, turning the bezel on his chunky
designer watch.
The Hargreaves connection
For the next two years, Mr Woodford’s business boomed. In its first 12
months, his main fund, Equity Income, returned 20 per cent, making it
one of the best-performing funds focused on UK stocks. Many of the
smaller companies he had invested in benefited from being associated
with the stockpicker, and their value soared. Much of the money came
from one source: Hargreaves Lansdown. Woodford had a longstanding
relationship with Hargreaves, which acts as a middleman between
millions of individual savers and fund managers. It had grown over
three decades from its launch in the spare bedroom of one of its
founders, to become the dominant channel for consumers to buy
investment products. Now it was a public company and entrenched in the
FTSE 100. Mr Woodford’s sales team and Hargreaves struck a deal where
the fund manager would offer a discount on its products to the fund
supermarket, in return for heavy promotion. Hargreaves added
Woodford’s funds to its “best buy” lists of recommended products. Mark
Dampier, head of research at Hargreaves, who has known Mr Woodford for
more than 25 years, was one of the most enthusiastic backers of the
new business. At the launch of Equity Income he informed Hargreaves’
customers that he and his wife were investing and called the manager
“remarkable”.The plan worked and thousands of savers opened accounts
with Hargreaves to invest in Mr Woodford’s funds. Equity Income soon
overtook Mr Woodford’s former main fund at Invesco, reaching £6.7bn in
July 2015. Around this time, Mr Woodford launched a listed investment
trust, known as Patient Capital, which aimed to back mainly small
companies with the potential for exponential growth. Attracting £800m
at launch, it was the UK’s biggest-ever fundraising for an investment
trust. But not everyone in the Oxford business park thought setting up
a fund to specialise in early-stage companies was the best use of the
manager’s time and resources. A key reason to do it was to “satisfy
Neil’s desire”, says a former colleague. “It’s his guilty pleasure to
do these unquoted deals, to be the big man. ‘I’ve got a massive cheque
book — I am going to write something that is just going to change your
world’.” One small company that caught Mr Woodford’s eye was
Industrial Heat, a North Carolina business that attempted to develop
power sources based on ideas at the fringes of modern physics. The
company also attracted investment from Brad Pitt and Laurene Powell
Jobs, Steve Jobs’ widow, among others. But Mr Woodford ploughed in
significantly more than the other high-profile backers, investing £54m
to own a quarter of the business.
Mr Woodford also invested in dozens of technology and science
start-ups from the surrounding Oxfordshire area, straying further and
further from the large established businesses on which he had built
his reputation.
“These start-ups are notorious for requiring funding round after
funding round and success rates are low and seemingly random,” says a
rival fund manager. “He was doing something very different from that
on which he had built his career, track record and reputation.”
Having spent most of his career in Henley, Mr Woodford had been cut
off from the centre of the UK’s fund management industry in London’s
Square Mile. As a result, his contacts book was much thinner than
those of his peers. He relied on a small group of brokers to bring him
prospective companies to invest in, centred on boutique banks such as
Cenkos and Numis.
“Neil was very good at selecting large public companies, looking at
corporate documents that all have rules and regulations around them,”
says a former colleague. “He basically applied the same thinking to
private companies, where it’s ‘next year, we’re going to get this drug
authorised and we’ll make billions’. He’d say, ‘I’m in for that’.”
Limited due diligence was done, the person adds. “Every company that
came in, he wanted to invest in.”
Mr Woodford expected investor cash to continue to pour in and assumed
one day the total value of the private holdings would be a fraction of
the overall portfolio. But unlike private equity firms that specialise
in unlisted companies, Mr Woodford made large bets without taking
overall control of the companies, leaving himself with hard-to-sell
positions in businesses he had little direct influence over. He was
setting himself traps from which it would be hard to escape.
Move to the country
Outside of work, Mr Woodford had remarried and begun taking a keen
interest in horseriding, a passion of his new wife Madelaine. He had
lived in the former home of Formula 1 magnate Flavio Briatore in
Buckinghamshire until 2014, but fell out with neighbours including TV
presenter Jeremy Paxman over his plans to build 28 stables and a
dressage arena on the property. The couple moved to a 423-hectare farm
in the leafy Cotswolds countryside, an hour’s drive from his Oxford
office. The sprawling estate, surrounded by drystone walls and
hedgerows, included several stable blocks and extensive indoor and
outdoor training facilities for Mr Woodford’s growing collection of
eventing horses. The location provided the fund manager with an entrée
to England’s equine elite, with Zara Tindall, granddaughter of Queen
Elizabeth and a former world and European three-day eventing champion,
a neighbour. Ms Tindall’s farm is set on the 600-acre estate of her
mother, Princess Anne, another former European equestrian champion and
Olympian. Each August her Gatcombe Park estate hosts the Festival of
British Eventing. Mr Woodford began to spend so much time on his horse
that the company brought in phones with special recording functions so
he could make trading instructions while out riding. Back on the
Oxford industrial estate, problems were festering. The company failed
to find long-term replacements for Mr Smith and Mr Hamilton. A
succession of risk and compliance managers passed through the business
in a company increasingly dominated by Mr Newman. The atmosphere
became more boorish and macho, according to former workers. Even as
the number of workers grew to more than 40, only a handful were women
— with none in the company’s top ranks. Smutty jokes were rife. A
senior investment team member used to say: “If trading was easy, birds
would do it.” Another manager at the company was found to have
pornography on his work computer. The junior member of staff who
reported the incident was sacked, according to two former employees.
Woodford denies the allegation. One former worker told the FT she
felt intimidated by the environment and avoided staying late at social
occasions because of how boozy and boisterous they could become.
Looking back, the summer of 2017 was the high point for Woodford
Investment Management. The business had attracted £15bn from investors
— just under half the total Mr Woodford had managed at Invesco.
Investment performance had dropped off since the initial few months,
but Mr Woodford’s cheerleaders at Hargreaves Lansdown, St James’s
Place and other well-known advisers were blasé, insisting his career
had followed a pattern of eye-watering returns followed by leaner
periods. In an FT interview in late 2017, Mr Woodford admitted he
doubted his investment judgment daily. “You must never, as a fund
manager, stick your head in the sand saying ‘everybody go away, I’m
right, I’m right, I’m right’. You’ve always got to expose yourself to
criticism and the analysis that you may be wrong.” But he added that
successful fund management needed a mix of arrogance and humility.
“You have to have a sufficiently strong arrogant gene to back your
judgment, back your conviction. If you didn’t, you would end up with a
portfolio that looks very much like the index. But, equally, you must
have the humility to accept that you will get things wrong.” With the
business seemingly on a firm footing, Mr Woodford and Mr Newman
restructured it in a way that enabled them to be paid in dividends,
thereby reducing their personal tax charge. There was enough profit to
pay out £98m between 2014 and 2018, with two-thirds going to Mr
Woodford and the remainder to Mr Newman. But the short-term
underperformance soon started to look like longer-term decline.
Throughout the second half of 2017 and into 2018 Mr Woodford’s funds
started to lag far behind competitors’. The star manager and his
supporters played down investors’ concerns, saying the portfolio was
hampered as Brexit uncertainty weakened the UK economy. Mr Woodford
would tell his clients that once Britain left the EU, overseas money
would flow into the UK and boost the companies in his portfolio. The
funds were also hit by a series of blow-ups. Chief among them was
Prothena, a US biomedical company that Woodford owned a third of,
which was valued at $1.5bn. In April 2018 the business reported the
failure of a major clinical trial and within an hour of the market
opening, its share price had nosedived 70 per cent. Mr Woodford’s
fans, including Mr Dampier and his colleagues at Hargreaves Lansdown,
continued to insist the renowned stockpicker would come good again —
but fewer investors were listening. Customers began demanding their
money back in droves, and a succession of long-term clients —
including Aviva Investors, Jupiter Asset Management and the Abu Dhabi
Investment Authority — deserted Mr Woodford.
In order to pay back fleeing investors, Mr Woodford was forced to sell
the easier-to-shift shares in large listed companies. But that meant
his funds were soon breaching regulatory defined limits of having no
more than 10 per cent of a fund’s assets in unquoted companies.
Despite having been given warnings about the lack of a strong
compliance culture within the Woodford business from several former
staff and clients, this was the first time the FCA intervened. The
regulator began asking Woodford’s administrator to give it monthly
updates on the portfolio and how easy it was to trade, known in the
industry as its liquidity. But unknown to the regulator, Mr Woodford
had hatched a plan to try to escape this self-imposed liquidity trap.
He began to list his stakes in some private companies on the Guernsey
stock exchange. As he was not offering to sell them, they were not
technically liquid, but they were classed as quoted shares, which
meant they would not breach the 10 per cent limit. On May 30 this
year, the FT reported that Woodford’s flagship Equity Income fund was
shrinking at an alarming rate due to severe underperformance and
panicky investors withdrawing £10m a day. The following morning the
board of the Kent county council pension fund, one of Woodford’s
longest-standing clients, met and decided it had finally had enough.
But when it tried to recoup its £263m investment — then equal to 7 per
cent of the fund — Mr Woodford did not have the cash available to pay
Kent back. The manager had no choice but to suspend the fund, locking
in the hundreds of thousands of remaining investors indefinitely. The
closure sparked Europe’s biggest fund management scandal for a decade.
It prompted a UK parliamentary probe, investigations from several
national regulators and a crisis of confidence among consumers in
investment funds that Bank of England governor Mark Carney claimed
were “built on a lie” because they were unable to pay investors back
daily as promised. For four months, the hordes of investors stuck in
Equity Income — close to 300,000 of whom were Hargreaves Lansdown
customers — looked on in anguish as the value of their savings
dwindled, while Mr Woodford’s company received more than £8m in fee
income. The fund’s administrator, Link, enlisted US investment
boutique PJT Partners to try to sell the unquoted companies. But by
last weekend, the bank had received insufficient interest in about
£150m of unlisted investments. Link decided the risk of the fund
reopening and then being forced to suspend again was too great. On
Monday afternoon, it told Mr Woodford and Mr Newman during a meeting
in the administrator’s London offices that the game was up. It would
remove Mr Woodford as manager of the fund and liquidate its holdings.
Realising the business could not go on without its main source of fee
income, Mr Woodford made a bombshell announcement the following
evening that he was closing the company, adding: “I personally deeply
regret the impact events have had on individuals who placed their
faith in Woodford Investment Management and invested in our funds.”
The statement brings an end to the most remarkable and controversial
career in British fund management. But the fallout from the scandal is
just beginning.
Mr Woodford’s downfall will have widespread consequences not just for
the customers locked in his funds but also for the broader industry.
The focus is rapidly switching to the roles played by Hargreaves
Lansdown, St James’s Place, the FCA and Link.
“If there is anything good to come out of this it is that investors
will move away from the industry’s Hollywood-style culture of star
worship,” says Jonathan Little, an investment industry veteran who has
run several businesses.
For now Mr Woodford and Mr Newman are keeping a low profile. On
Wednesday this week, the car park at their Oxfordshire headquarters,
usually filled with Jaguars, Range Rovers and Mr Woodford’s Porsche
Cayenne, was deserted. The employees who had not already been let go
were working from home.
It is a crashing comedown from the raucous celebrations at the nearby
Crazy Bear bar five years ago — and one that will leave a lasting
hangover for the UK’s investment industry.
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.@IMFNews #IMFAfrica Sub-Saharan Africa Regional Economic Outlook: Navigating Uncertainty Africa |
Sub-Saharan #Africa's economic growth is projected to be lower than
previously envisaged – 3.2% in 2019 and 3.6% in 2020.
Growth is forecast to be slower than previously envisaged for about
two-thirds of the countries in the region.
The downward revision reflects a more challenging external
environment, continued output disruptions in oil-exporting countries,
and weaker-than-anticipated growth in South Africa.
Growth is projected to remain strong in non-resource- intensive
countries, averaging about 6 percent. As a result, 24 countries, home
to about 500 million people, will see their per capita income rise
faster than the rest of the world.
In contrast, growth is expected to move in slow gear in
resource-intensive countries (21⁄2 percent). Hence, 21 countries are
projected to have per capita growth lower than the world average.
External headwinds have intensified compared to April and include the
threat of rising protectionism, a sharp increase in risk premiums or
reversal in capital inflows owing to tightening global financial
conditions, and a faster-than-anticipated slowdown in China and in the
euro area. Regionally, near-term downside risks include climate
shocks, intensifica- tion of security challenges, and the potential
spread of the Ebola outbreak beyond the Democratic Republic of the
Congo. In addition, fiscal slippages, including those ahead of
elections in some countries, and a lack of reform in key countries
could add to deficit and debt pressures. Over the medium term, a
successful implementation of reforms, including in the context of the
African Continental Free Trade Area (AfCFTA), could pose significant
upside risks.
policymakers have limited room for maneuver to counter external
headwinds. The room for supporting growth remains mainly on the
monetary policy side and restricted to countries where inflation
pressures are muted and growth is below potential.
20 million (net) new entrants poised to join labor markets every year.
Elevated balance sheet vulnerabilities in many countries limit the
room for macroeconomic policies to address downside risks to growth.
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Putin signals Russia's return to Africa with summit @KremlinRussia_E @AFP @YahooNews Africa |
Moscow (AFP) - President Vladimir Putin hosts dozens of African
leaders next week as Russia seeks to reassert its influence on the
continent and beyond.
The heads of some 35 African countries are expected for the first
Africa-Russia Summit in the Black Sea resort of Sochi next Wednesday
and Thursday.
For Putin, the summit is a chance to revive Soviet-era relationships
and build new alliances, bolstering Moscow's global clout in the face
of confrontation with the West.
"Russia has always been present in Africa, this is a very important
continent," Putin's spokesman Dmitry Peskov said ahead of the summit.
"Russia has things to offer in terms of mutually beneficial
cooperation to African countries."
Though never a colonial power in Africa, Moscow was a crucial player
on the continent in the Soviet era, backing independence movements and
training a generation of African leaders.
Remnants of that influence remain, from the Kalashnikov rifle on the
flag of Mozambique to the Angolan flag with its
hammer-and-sickle-style gear and machete.
The leaders of former Soviet client states like Angola and Ethiopia
will be at the forum, but so will others from where Moscow's
engagement has been traditionally low, like Nigeria and Ghana.
Egyptian President and African Union chairman Abdel Fattah al-Sisi --
who Putin has fostered as an ally -- will co-chair.
"This forum signals Russia's decisive pivot towards Africa," said
Yevgeny Korendyasov, an expert at Moscow's Institute for African
Studies and former ambassador in Burkina Faso and Mali.
Russia's ties with Africa declined with the collapse of the Soviet
Union in 1991 and in recent years China has emerged as a key foreign
power on the continent.
But Putin's Kremlin -- emboldened by its growing presence in the
Middle East and the success of its military intervention in Syria --
is trying to play catch-up.
Russian companies have invested in oil and gas in Egypt and Nigeria,
in diamonds in Angola and in metals in Guinea and South Africa.
Moscow has also used a combination of arms exports, security expertise
and support for local governments to deepen its political and economic
presence.
"With varying degrees of success, Moscow is attempting to mobilise its
Cold War-era connections and convert its old ideological links into
business," said Arnaud Dubien, the head of the Franco-Russian
Observatory.
The Central African Republic -- whose president Faustin-Archange
Touadera will attend the summit -- has been one of the most prominent
examples.
Moscow has delivered weapons along with contractors to train soldiers
in the former French colony.
It has flaunted its growing presence in the country, with Russian
military contractors patrolling the streets of the capital Bangui and
a Russian, Valery Zakharov, serving as security advisor to Touadera.
Moscow has struck a series of military agreements with other African
countries and thousands of private Russian security contractors --
many of them with experience fighting in eastern Ukraine and Syria --
are reported to be working on the continent.
They include mercenaries from the Wagner Group believed to be
controlled by Putin ally Evgeny Prigozhin.
In Libya, Russian contractors are reported to be fighting on the side
of military commander Khalifa Haftar and in Mozambique they helped the
government fight jihadists.
Russian fighters have also been spotted in Sudan and Madagascar.
Still, analysts say it's too soon to be speaking of a major Russian
presence across the continent.
"There is a real difference between the masterfully promoted narrative
and the reality," French geopolitical analyst Arnaud Kalika said.
In a research paper for the French Institute of International
Relations, Kalika said Russia's return to Africa was more modest than
Moscow would want the world to believe.
"Russia needs Africa now more than Africa needs Russia."
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Late last month, a giant Antonov An-124 military transport plane landed at an air strip on Mozambique's northern coast @globeandmail Africa |
Over the next few hours, as revealed by photos on social media,
workers unloaded the plane’s cargo: a Russian Mi-17 helicopter in
military camouflage, an army truck and other equipment, all to supply
the estimated 160 Russian military contractors that have arrived in
northern Mozambique to fight an Islamist insurgency.
It was the latest sign of Russia’s expanding influence in Africa: an
influence that ranges from oil investment and weapons sales to the
increasing deployment of forces such as private mercenaries and covert
election consultants.
Next week, for the first time, Russian President Vladimir Putin is
hosting a summit for dozens of African leaders in the Black Sea resort
town of Sochi. The leaders of at least 35 African countries are
expected to attend.
Russia’s trade with Africa has tripled over the past decade, reaching
US$20-billion last year. Its interests in Africa are vast: nuclear
energy deals in Nigeria and Egypt, platinum mining in Zimbabwe,
diamond mining in Angola, oil exploration in Ghana and Algeria, gas
projects in Cameroon and Nigeria, hydro power in Tanzania, arms
exports in Uganda and Egypt, and units of mercenary soldiers in Sudan,
Libya and Central African Republic. And Russia could soon acquire its
first African military base – it has been in talks with Sudan about a
possible naval base on the Red Sea.
The United States and the former European colonial powers have
cultivated the same kinds of interests in Africa for decades, but the
recent decline of U.S. influence under the Trump administration has
helped lure in its geopolitical rivals for a 21st-century version of
the 19th-century colonial “scramble for Africa.”
China is still the biggest new power in Africa, with US$200-billion in
annual trade with the continent, but the Sochi summit is evidence of
Moscow’s efforts to accelerate its own African strategy, while other
competitors such as Turkey, Israel and Japan have also dramatically
expanded their diplomatic and economic efforts in the continent in
recent years.
Russia says it will offer a “win-win” relationship with African
leaders at the Sochi summit. “We are prepared to propose to our
African colleagues and friends a broad agenda of equal interaction,
covering many different areas: economy, energy, transport, education
and environment,” Mr. Putin said in a statement.
Russia’s trade with Africa has tripled over the past decade, reaching
US$20-billion last year. Its interests in Africa are vast: nuclear
energy deals in Nigeria and Egypt, platinum mining in Zimbabwe,
diamond mining in Angola, oil exploration in Ghana and Algeria, gas
projects in Cameroon and Nigeria, hydro power in Tanzania, arms
exports in Uganda and Egypt, and units of mercenary soldiers in Sudan,
Libya and Central African Republic. And Russia could soon acquire its
first African military base – it has been in talks with Sudan about a
possible naval base on the Red Sea.
The United States and the former European colonial powers have
cultivated the same kinds of interests in Africa for decades, but the
recent decline of U.S. influence under the Trump administration has
helped lure in its geopolitical rivals for a 21st-century version of
the 19th-century colonial “scramble for Africa.”
China is still the biggest new power in Africa, with US$200-billion in
annual trade with the continent, but the Sochi summit is evidence of
Moscow’s efforts to accelerate its own African strategy, while other
competitors such as Turkey, Israel and Japan have also dramatically
expanded their diplomatic and economic efforts in the continent in
recent years.
Russia says it will offer a “win-win” relationship with African
leaders at the Sochi summit. “We are prepared to propose to our
African colleagues and friends a broad agenda of equal interaction,
covering many different areas: economy, energy, transport, education
and environment,” Mr. Putin said in a statement.
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05-DEC-2016:: One common theme is a parabolic Putin rebound. Africa |
So much has happened in 2016, from the Brexit vote to President-elect
Trump, and it certainly feels like we have entered a new normal. One
common theme is a parabolic Putin rebound.
At this moment, President Putin has Fortress Europe surrounded. The
intellectual father of the new Zeitgeist that propelled Brexit, Le
Pen, the Five Star movement in Italy, Gert Wilders in the Netherlands,
is Vladimir Putin.
In the Middle East, it is Putin who is calling the shots in Aleppo,
and in a quite delicious irony it looks like he has pocketed Opec as
well.
However, my starting point is the election of President Donald Trump
because hindsight will surely show that Russia ran a seriously
sophisticated programme of interference, mostly digital. Don DeLillo,
who is a prophetic 21st writer, writes as follows in one of his short
stories:
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For the first time since it won independence from Britain in 1966, Botswana faces a genuine electoral contest on Wednesday @ReutersAfrica Africa |
The Botswana Democratic Party, in power since independence day, faces
an unusually tough parliamentary vote, after the country’s former
president and political heavyweight Ian Khama fell out bitterly with
his hand-picked successor, President Mokgweetsi Masisi, earlier this
year.
There is no clear winner in sight and little to distinguish the
contestants on policy. But whichever party wins will inherit the
unenviable task of tackling high unemployment, inequality and
over-reliance on dwindling diamonds, which turned Botswana into one of
Africa’s wealthiest nations but cannot lift living standards forever.
Khama, the son of founding president Seretse Khama, has thrown his
weight behind an opposition coalition led by human rights lawyer Duma
Boko. The outcome of Wednesday’s vote will also determine who becomes
president.
“We are putting an end to this misrule by the BDP. We want our people
to be more empowered and to enjoy more of this country’s economic
opportunities,” Boko told a news conference on Thursday, promising to
create 100,000 jobs, raise the minimum wage and grow the economy by
more than 6 percent a year.
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@BarrickGold Agrees to Pay $300 Million to End Tanzania Dispute @markets Africa |
Barrick Gold Corp. agreed to pay $300 million to the Tanzanian
government to end a long-running dispute that it says destroyed the
value of its subsidiary Acacia Mining Plc’s assets.
As part of the deal, which still must be approved by Tanzania’s
attorney general, the government will be given a 16% stake in a
renamed company known as Twiga Minerals Corp., Barrick said Sunday in
a statement.
The payments are to settle all outstanding tax and other disputes, the
gold miner said. The agreement means a ban on export of concentrates
will be lifted, Barrick said.
“Rebuilding these operations after three years of value destruction
will require a lot of work, but the progress we’ve already made will
be greatly accelerated by this agreement,” Mark Bristow, Barrick’s
chief executive officer, said.
“Twiga, which will give the government full visibility of and
participation in operating decisions made for and by the mines,
represents our new partnership not only in spirit but also in
practice.”
The breakthrough ends a disagreement between Tanzania and a Barrick
subsidiary that started in 2017. Tanzania banned the export of
unprocessed metals by miners, subsequently presenting Acacia with a
$190 billion tax bill, equivalent to two centuries of revenue.
Acacia, which owned the three mines in Tanzania, was bought by Barrick
this year. For almost two years, Barrick has been leading negotiations
with Tanzania over terms of the deal, first negotiated by the
company’s Executive Chairman John Thornton.
The agreement means that Tanzanians would share fully in their
nation’s mineral wealth, Barrick said.
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Ethio Telecom Q1 revenues up 21% year-on-year @ReutersAfrica Africa |
Ethiopia’s state-run Ethio Telecom saw total revenues rise 21% in the
first quarter of its fiscal year compared with the same period a year
earlier, the company said on Thursday, showing healthy growth as it
prepares for foreign competition.
The company’s total revenue reached 10.1 billion Ethiopian birr ($343
million), with subscriber numbers up 10% on the year to 44.45 million.
“We have revamped existing products and we have also launched new
ones. Our discounted tariffs on internet and data meant usage
increased by 92% as costumers started using such services more,” CEO
Frehiwot Tamiru told Reuters by phone.
Ethio Telecom announced a three-year plan in August aimed at
installing 4G network in the capital Addis Ababa as well as in other
regions and to upgrade other network services.
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Congo's enormous rainforest is getting smaller @TheEconomist Africa |
Jagged, charred tree stumps jut out of blackened earth in what was
once part of the rainforest in the Democratic Republic of Congo. One
man, Rafael, standing amid the devastation, reckons he has set fire to
around 40 sections of the forest near the city of Bandundu in the past
two months. He bags the scorched wood and flogs it as charcoal in the
capital, Kinshasa, some 250km away. Most of the city’s 12m residents,
unable to afford gas or electric ovens, rely on charcoal for cooking.
The Congo basin rainforest is the second biggest tropical forest in
the world, after the Amazon. It stretches across six central African
countries (though more than half its trees are in Congo). Its
absorbent peatlands hold the equivalent of three years’ worth of
global carbon emissions, mitigating global warming. But it is
shrinking fast. Between 2001 and 2018 Congo lost 13m hectares of tree
cover (around 6% of the entire rainforest), an area almost twice the
size of Ireland. The charcoal trade is partly to blame. Most of
Congo’s 85m people are poor. Entire villages subsist by selling burnt
wood. The rainforest hugs the Congo river, so it is easy for sellers
to pile charcoal onto boats and float it to Kinshasa. Farmers add to
the problem. Over two-thirds of Congolese grow what they eat. Many
chop down trees to make space for crops. The population is growing
fast. More mouths will require more farmland—and less forest. At the
United Nations General Assembly in September the president of Congo,
Félix Tshisekedi, said he was committed to saving his country’s trees
and asked for more money to do so. “Nature has made my country the
depository of 47% of the continent’s forests,” he said. “It is
incomprehensible that the forests of the Congo basin...capture only 1%
of available financing.”
But even if Mr Tshisekedi gets more money, he may not have the clout
to fulfil his promises. The election that he “won” in December was
widely deemed to have been rigged. He and his predecessor, Joseph
Kabila, are now glued together by a secret power-sharing deal. Mr
Kabila has allowed corruption to flourish. And he has done little to
protect the forests. Shortly before leaving office he approved a
contract that allows two companies to explore for oil in the
peatlands. His government was also loose with logging permits. Mr
Tshisekedi may face more scrutiny. “We’re watching him and we will
remind him of his words at every possible occasion,” says Raoul
Monsembula of Greenpeace, an environmental group. More of the world is
watching, too. In August, as fears over fires in the Amazon grew,
people began checking nasa’s satellite maps and noticed that there
were even more conflagrations in central Africa. In central Africa,
though, fires in August are common, as farmers burn their fields to
make way for new crops. Most of the fires appear to have been lit on
purpose in savannah, outside of the rainforest. They were much smaller
than those in the Amazon, which spread quickly into sensitive areas.
Congo’s rainforest is damp enough to stop blazes from tearing through
it. There are far fewer fires now in Congo (see map), but worries
remain. As clusters of trees disappear and dry patches take their
place, the risk of big fires increases. Hunters often burn grass to
trap animals at the edge of the forest. These blazes can grow out of
control. “There is no mechanism to stop those fires from taking down
the forests,” says Don Madikani, an environmental expert working for
the Congolese government. “We don’t have the technology to fight
them.” Using fires to hunt is forbidden, as is chopping down trees for
charcoal without a licence. But both are common. Congo is enormous and
its police are corrupt. The enforcement of forestry laws is lax. All
along the muddy road from Bandundu to Kinshasa there are pockets of
smoke and burnt trees. Tarpaulin bags filled with charcoal line the
roadside. Until more jobs are created and governance improves, Congo’s
trees will continue to go up in smoke.
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Angola Eyes Return to Eurobond Market to Help Fund Budget Gap @BloombergQuint Africa |
Angola will tap international bond markets to help finance its budget
for this year and 2020 and is working with banks to gauge the appetite
for issuance. While the government hasn’t yet decided on the amount
that it will issue or the exact timing “we decided that we will go” to
the market, Finance Minister Vera Daves de Sousa said Friday.
Angola last tapped international markets in May 2018, when it raised
$1.75 billion in 30-year securities paying 9.375%. The yield has
climbed about 60 basis points from a record low in July to 8.85% on
Friday. The country’s dollar bonds have lost 0.5% since the end of
June, the worst performance out of 17 sub-Saharan African sovereigns
with Eurobonds, according to data compiled by Bloomberg.
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USDZAR H/T @Slipcatch 14.7597 Africa |
Eskom and loadshedding and mostly because the ANC Cadres are still in
office, around R14.76 currently, will like to see the new week's
opening action. The pairing is suppose to make a Cycle Low in the
foreseeable future (est around Jan '20).
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The tiny west African country Liberia with a gdp of just $2.1bn, has one of largest seagoing fleets in the world. Over 4,400 vessels (about 12% of global shipping) fly its flag @TheEconomist Africa |
The secret of this maritime success is an old practice known as the
flag of convenience. In the 1920s shipowners began to register their
vessels abroad for a small fee.
This allowed them to avoid taxes and labour laws back home. Liberia
had few regulations and made it easy to sign up. By the 1960s it had
the largest merchant navy in the world.
But two civil wars in the 1990s and 2000s hit the registry hard.
Charles Taylor, the president from 1997 to 2003, used some of the $20m
a year generated by the registry to pay arms dealers. His bloody
reputation prompted many shipowners to switch to Panama.
When the fighting ended in 2003, its registry was more than twice the
size of Liberia’s.
Liberia is striving to win back the ships it lost. Last year it
renewed an agreement with China that makes it easier and cheaper to
ship products into Chinese ports under a Liberian flag.
The groundwork for that deal was laid in 2003, when Liberia dropped
Taiwan and recognised China. (Panama has done the same; the Marshall
Islands, with the third most popular flag, has not.) Efforts are
paying off: measured by gross tonnage, Liberia’s fleet grew by 8% in
2018.
Ordinary Liberians still see few benefits from the country’s vast
fleet. The state wastes much of the revenue generated by the registry
(now thought to be over $20m a year). Ships don’t often call at
Monrovia, the capital, a ghostly place littered with rusting hulks. On
bad days the wrecks outnumber container ships.
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Bank stocks up Sh21bn in rate cap review push @BD_Africa Africa |
Seven of the 10 banks listed at the Nairobi Securities Exchange (NSE)
gained on what stock dealers linked to increased demand for the
lenders' shares on the expectation of increased profitability and
stock gains.
The rally started on Thursday when news leaked to the market that Mr
Kenyatta had sent a memo calling for the repeal of the law that
introduced the rate cap in September 2016.
Investors in Equity gained Sh7.3 billion in the two days after the
share rose 5.4 percent, KCB rose Sh5.93 billion after the stock
increased 4.4 percent while owners of Co-operative Bank saw their
wealth rise Sh2.3 billion.
Standard Chartered, I&M Bank and mortgage lender HF shares failed to
register price gains, shedding Sh134 million collectively although
this had little impact on their market valuation.
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