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Once upon a time many many years ago, the markets were traded on the
Phone and a human had to speak to another human in order to trade. You
read the Paper on the way to work, the TV was always on, You relied on
a trusted network of humans in different parts of the World. That time
feels as long ago as a Fairy Tale. I recall in the 1990s when the
Internet arrived on the Trading Floor. Today, as The Economist
headlined October 5th, it  is [The] ''March of the machines The
stockmarket is now run by computers, algorithms and passive managers''
 Morningstar, a research firm, reported that for the first time, the
pot of passive equity assets it measures, at $4.3trn, exceeded that
run by humans. The Financial Markets are a ''Bot'' World with Bots
trading with each other. And There is clearly a convergence with
Computational propaganda The University of Oxford's Oxford Institute
Computational Propaganda Research project   produced a research piece
which spoke of ''the use of algorithms, automation, and big data to
shape public life – is becoming a pervasive and ubiquitous part of
everyday life.

Cambridge Analytica's now infamous Andrew Nix said

“We just put information into the bloodstream to the internet and then
watch it grow, give it a little push every now and again over time to
watch it take shape. And so this stuff infiltrates the online
community and expands but with no branding – so it’s unattributable,
untraceable.”

“So the candidate is the puppet?,” the undercover reporter asked.
“Always,” replied Mr Nix.

Practically every Trading day now and for over a year, President Trump
recycles the same headline.

The latest iteration ''Donald Trump says China trade talks moving
‘very nicely’, claiming Beijing wants deal more than US'' [SCMP].

Recycle the same headline over and over and over again. And each time
markets jump. And each time it means nothing tweeted @NorthmanTrader
You know why algos buy unsubstantiated headlines? Because they're
stupid. @NorthmanTrader

This Feedback Loop has lifted stock markets particularly in the United
States to all time highs and there has been a spillover into other
developed markets. The Human Institutional Memory has been eroded and
if you traded on the basis of fundamentals, You would have been
stopped out a decade ago. This is a House of Cards of simply monstrous
proportions and has been bulked up with the steroids of Free money,
negative interest rates and QE.

Here we go round the prickly pear
Prickly pear prickly pear
Here we go round the prickly pear
At five o’clock in the morning.

This is the way the world ends
This is the way the world ends
This is the way the world ends
Not with a bang but a whimper.

The Hollow Men  T.S. ELIOT

Interestingly, last week, we saw a reversal of the overwhelming Safe
Haven Demand we had witnessed all year. Gold had its worse week in 2
years. G7 Government Bonds sold off. The US 10 year printed its
highest yield since mid Sep, trading above 1.90%. The German 10 year
yield was at its highest since mid July, last at -0.274%. French 10
Year Yields crossed into positive Territory.

The Global markets pirouette on the outcome of the Trade War. SCMP
news carried an article

Trade negotiator who got China into WTO is rooting for Trump’s
re-election because ‘Twitterer in Chief’ is easy to read.

Donald Trump, whose trade war with China has upended global supply
chains and imperilled the world’s economic growth, would be most
welcomed with another four years in the White House because he is
easier to read than other American politicians, said the negotiator
who led China’s entry into the World Trade Organisation (WTO). The US
president's daily Twitter posts broadcast his every impulse, delight
and peeve to 67 million followers around the world, making him “easy
to read” and “the best choice in an opponent for negotiations,” said
Long Yongtu, the former vice-minister of foreign trade and point man
during China’s 15-year talks to join the WTO nearly two decades ago

Now its clear that Trump is playing a Game and he has played it rather
well. And it is also within Xi's power to absolutely crash the US
market by simply pronouncing that ''No Trade Deal is possible'' and
the US stock indices will sink as far as the US Farm Economy has sunk
and with it Trump's relection chances. And my Final point is that
whilst the ‘Twitterer in Chief’ is easy to read, I am not sure he is
the Decider.

The risk of Bot and algorithmic mayhem is sky high and I am not sure
pumping the Patient with more QE and Free Money will do the trick next
time around.

The Bots will be waiting for Santa Claus and a Christmas rally so as
President Trump is wont to tweet

Stock Market up big today. A New Record. Enjoy!

Donald Trump, whose trade war with China has upended global supply
chains and imperilled the world’s economic growth, would be most
welcomed with another four years in the White House because he is
easier to read than other American politicians, said the negotiator
who led China’s entry into the World Trade Organisation (WTO). The US
president's daily Twitter posts broadcast his every impulse, delight
and peeve to 67 million followers around the world, making him “easy
to read” and “the best choice in an opponent for negotiations,” said
Long Yongtu, the former vice-minister of foreign trade and point man
during China’s 15-year talks to join the WTO nearly two decades ago.
“We want Trump to be re-elected; we would be glad to see that happen,”
Long said during Credit Suisse’s China Investment Conference yesterday
in Shenzhen. Long, who turned 76 in March, has retired from active
ministerial posts and doesn’t speak for China’s government in matters
concerning the domestic affairs of other countries. But the comment
from someone considered the elder statesman of China’s trade diplomacy
does offer a hint of the thinking in Beijing’s policymaking circle, as
officials grapple with how best to handle the bruising trade war
between the two largest economies on Earth. “Trump talks about
material interests, not politics,” Long said in an interview with
South China Morning Post in Shenzhen. “Such an opponent is the best
choice for negotiations.”

RT: When (CCP) say this, they've already misread America. True that
Trump's tweets tells a lot about what's in Mr Trump. But what china
miss is that, unlike authoritarian rule under which one man can decide
everything, Trump can't negotiate with china at will

The point being in the trade war Trump is no longer the decider. In
the US, there is clearly a consensus baseline for a full-on toe to toe
slugfest as it were. In China, however, there is only one decider who
was pronounced as much by Xinhua in a historical announcement in March
2018.
Xi reckons he can direct a successful, society-wide struggle in the
trade dispute’’ Notwithstanding all the hyperbole and very partisan
commentary, the following are the plain Truths.
The Markets are still pricing in a benign [but much less benign than a
month ago] Outcome. We need to consider what a non-benign or even
maximum non-benign outcome looks like.

however

Macro Thoughts

“There's no rollback at all,” Navarro said. “So we need the tariffs
there, but the tariffs are really our best insurance policy as well to
make sure that the Chinese are negotiating in good faith.”
Navarro’s comments echoed that of his boss. “Well, they’d like to have
a rollback. I haven't agreed to anything,” President Trump told
reporters earlier on Friday, adding “China would like to get somewhat
of a rollback — not a complete rollback, because they know I won't do
it.”
Navarro, one of the main China hawks at the White House, believes the
U.S. needs to keep tariffs in place to ensure the enforcement of
signed provisions and to negotiate for future ones. The phase one deal
mainly covers intellectual property theft, forced technology transfer
and currency manipulation. The provisions on IP theft is entirely from
the failed deal in May, which the U.S. accused China of reneging on
last minute, according to Navarro.
Other corners of the Trump administration are not in line with Navarro
and Trump. On Thursday, Larry Kudlow told Bloomberg that “if there’s a
phase one trade deal, there are going to be tariff agreements and
concessions.”
On Friday, White House Press Secretary Stephanie Grisham added, in a
Fox News interview, that “I imagine, if we reach [a deal] then some
tariffs could be lifted.”

There is certainly a Fin de siècle even apocalyptic mood afoot. The
conundrum for those who wish to bet on the End of the World is this,
however. What would be the point? The World would have ended.

Eleven years ago, Satoshi Nakamoto announced the bitcoin whitepaper to
the world. Coinbase, a large cryptocurrency exchange, recently
celebrated this milestone with a retrospective.
I’m going to remix Coinbase’s narrative to tell a different account of
bitcoin’s last 11-years.
The thing that fooled us all for a while, myself included, is that we
all thought bitcoin was solving a monetary or payments problem. It was
labelled a coin, after all, and coins fall within the realm of
monetary economics.
To further complicate matters, Satoshi told his story using phrases
like “electronic cash system” and “non-reversible transactions”.
Perhaps we deserve to be forgiven for not seeing bitcoin’s underlying
nature. After all, tearing down the existing monetary system and
building a new one was a fresh and exciting narrative.
Anyways, Coinbase still believes this old tale. “As with other
technologies, money has gone through many upgrades over the years,”
its marketing team writes. “Bitcoin is the latest breakthrough in a
technology that’s millennia old.”
What is now apparent is that bitcoin was never a monetary phenomenon.
No, bitcoin is a new sort of financial betting game. It is a digital,
global, highly-secure, and fairer version of the old-fashioned chain
letter.
The premise behind bitcoin-the-game is that the current wave of buyers
must guess when (or if) a subsequent wave of buyers will emerge, this
second next wave’s participation being contingent on when (or if) they
believe a third wave of buyers to emerge.
If they guess right, the early birds win at the expense of the late
ones. And they can win a lot of money, as Coinbase points out in its
post:
Think of bitcoin as a pure mind game, a Keynesian beauty contest in
which we “devote our intelligences to anticipating what average
opinion expects the average opinion to be.”
Those old fashioned chain letters that you (or your parents) used to
get in the mail were an early type of beauty contest. The price that
Alice was willing to place on a chain letter was a function of whether
she expected the next recipient, Bill, to play by the rules and send
it on, Bill’s expectation in turn depending on the odds that Jack
would join the game.
But chain letters had a major flaw. The chain order could be easily
compromised by a fraudster who miscopied the list and put their name
at the front. Bitcoin fixes this by introducing robustness to chain
letter-type games. Bitcoin’s blockchain is an unbreakable public
record of where in line game players stand.
Altering this chain order would require tremendous amounts of computer
power, as Coinbase illustrates in this chart:
Bitcoin-the-game has been spectacularly successful. As Coinbase points
out, it “went from an idea in 2008, and a first transaction in 2009,
to over 27 million users in the US alone in 2019, or 9% of Americans.”
Below, Coinbase has charted the number of active bitcoin addresses
that have been created over the years:
Why did bitcoin-the-game succeed?
First, it’s a fun and cutting-edge game. Many people dream of
thrusting themselves out of financial obscurity into millionaire land.
Bitcoin is a technologically-sophisticated way to get there. No one
wants to play grandpa’s lottery.
Secondly, the way that bitcoin is designed helps it spread. Most of
the legacy financial games that bitcoin competes with (poker,
lotteries, sports betting) are regulated by the government.
Strict rules prevent game providers from reaching a wide audience. For
instance, online casinos may be prevented from serving out-of-state
players, problem gamblers may be banned, and those who are under 18
must be excluded.
These financial games are usually centralized. This means they are
hosted on a single website, or at a physical location like a casino,
or by a government-run lottery corporation. Which makes it easy for
regulators to shut down game providers who break the rules.
But bitcoin is different. Because it is a decentralized and digital
financial game, it can’t be regulated or shut down. And so it can
serve the entire globe with impunity. Which it has done by spreading
into every crack and cranny on earth. As is illustrated by another of
Coinbase’s charts:
Based entirely on whisps and storms of psychology, the price of
bitcoin is inherently volatile. Its core volatility has stayed pretty
much constant over the last 11-years. Users should expect the same for
the next 11 years. Even if more people join a Keynesian beauty
contest, the average opinion of the average opinion will always be a
fickle, inconsistent thing, and so price will always be jittery.
So what about bitcoin-as-money? Yes, people do use bitcoin for
payments. But this gets dwarfed by its popularity as a financial game.
The problem is this. Bitcoin payment functionality is implemented on
top of a highly volatile chassis, a fun but fickle beauty contest.
Which hobbles the effectiveness of the payments platform.
Regular folks won’t use the stuff to pay. They don’t want the value of
their spending stash to fall by 20% overnight. And game players don’t
want to waste their tokens on buying goods & services. That could mean
potentially missing out on a life changing jackpot.
That’s why the promise of mainstream bitcoin payments has died a
thousand deaths over the last 11 years.
That being said, the demand for bitcoin in economically volatile
regions such as Venezuela has hit record highs. Coinbase suggests that
thanks to inflation and capital controls, bitcoin is finally being
used as the electronic cash for which it was originally designed.
Coinbase could be right. In places like the U.S. with functioning
monetary systems, bitcoin is just too awkward to serve as a payments
alternative.
But in places where monetary breakdowns have occurred, regular folks
may be more willing to put up with the inherent pitfalls of
transacting with bitcoin. And so we finally get to see
bitcoin-as-money emerging.That’s a good thing.
But bitcoin’s popularity in Venezuela is also consistent with the
bitcoin-as-game narrative. When people are desperate to improve their
lives, they may have little other option but to roll the dice.
In Run Lola Run, Lola needs to quickly make 100,000 Deutschmarks to
save her boyfriend’s life. She races to a casino and plays roulette.
Likewise, in the face of societal collapse,  Venezuelans may simply be
gambling on whatever potentially life-changing bet they can find.
Bitcoin is one such a bet. Unwinding what portion of Venezuelan usage
is due to bitcoin-as-game versus bitcoin-as-money is tricky.
Coinbase goes on to spout the typical cryptocurrency industry nonsense
about legacy payments. It claims that “sending an international wire
transfer by major US banks costs around $45, can take days to process,
and can be done only during banking hours.” And here is the chart it
uses:
That may be a good critique from ten years ago. But with SWIFT gpi
having rolled out a few years back, multinationals can make near
real-time cross border payments using the traditional correspondent
banking system.
For individuals and small businesses, fintech Transferwise offers
instant remittances over fiat rails. These can settle on weekends in
nations like the UK, which have real-time retail payments systems.
I’ve touched on this before.
Continuing along with hyperbole, Coinbase makes the claim that bitcoin
remittance fees are minimal compared to fiat. But this ignores the
sizable foreign exchange fees that one must pay when converting fiat
into bitcoin and back into fiat. I’ve gone into this calculus before.
What’s next for Bitcoin? asks Coinbase in closing. Let me give it a
shot. It’s possible that bitcoin-as-game will stay popular for a very
long time. And if it does, that could be a good thing.
As I’ve suggested before, there is a demand as-such for financial
games and bets, specifically early-bird bets. Compared to many of the
fly-by-night games out there, bitcoin provides a fair and trustworthy
option.
What about the original vision that got us all so excited,
bitcoin-as-money? Crippled by bitcoin’s game-based engine, bitcoin
payments are probably never going to move beyond the niche role that
they currently occupy. That’s better than nothing.
When those on the fringes are temporarily cut off from the
conventional payments system, they’ll always have an option for making
transactions. It might not be a user-friendly option, but at least
it’s there.

“But it is a curve each of them feels, unmistakably. It Is the
parabola. They must have guessed, once or twice -guessed and refused
to believe- that everything, always, collectively, had been moving
toward that purified shape latent in the sky, that shape of no
surprise, no second chance, no return.’’

If you spend your life deeply immersed in the markets, then it is
necessary to sniff out these parabolic moves. And it’s better to do
right than say right as Edwin Lefevre noted nearly a century ago.

Or as T.S Eliot said in The Hollow Men

Between the idea
And the reality
Between the motion
And the act
Falls the Shadow
For Thine is the Kingdom.

‘’One of the few men to get out in time before the Wall Street crash
of 1929 did so – legend has it – because he was offered a stock tip by
the boy who shined his shoes. He immediately sold all his holdings. If
the mania for gambling on the stock market had reached down to the
children on the streets, the bubble must have been due to pop at any
moment. The corresponding moment for the cryptocurrency bubble will
only be discernible in retrospect, but we have some pretty strong
candidates already. The endorsement of one project by the reality TV
star Paris Hilton has already happened.’’

There are many cryptocurrency schemes which are sold on the same
grounds as the greatest South Sea Bubble prospectus: “For carrying on
an undertaking of great advantage, but nobody to know what it is.”

My investment thesis at the start of the year was that Bitcoin was
going to get main-streamed in 2017. It has main-streamed beyond my
wildest dreams, therefore, I am now sidelined.

Let me leave you with Hunter S.Thompson, “Life should not be a journey
to the grave with the intention of arriving safely in a pretty and
well preserved body, but rather to skid in broadside in a cloud of
smoke, thoroughly used up, totally worn out, and loudly proclaiming
“Wow! What a Ride!”

The ‘’Zeitgeist’’ of a time is its defining spirit or its mood.
Capturing the ‘’zeitgeist’’ of the Now is not an easy thing because we
are living in a dizzyingly fluid moment.

Home Thoughts

V

Here we go round the prickly pear
Prickly pear prickly pear
Here we go round the prickly pear
At five o’clock in the morning.

Between the idea
And the reality
Between the motion
And the act
Falls the Shadow
For Thine is the Kingdom

Between the conception
And the creation
Between the emotion
And the response
Falls the Shadow
Life is very long

Between the desire
And the spasm
Between the potency
And the existence
Between the essence
And the descent
Falls the Shadow
For Thine is the Kingdom

For Thine is
Life is
For Thine is the

This is the way the world ends
This is the way the world ends
This is the way the world ends
Not with a bang but a whimper.

When Kabir died, his body was claimed by both the Hindus and the
Mohammedans. The King of Kashi, with thousands of Hindus, wanted to
cremate the body. The Hindus claimed that Kabir was a Hindu and that
therefore his body should be burnt. Bizli Khan, with thousands of
Mohammedans, wanted to bury it.

The Mohammedans said that Kabir was a Muslim and therefore his body
ought to be buried under Mohammedan rites. While they were
quarrelling, Kabir's apparition appeared and said, "I was neither a
Hindu nor a Mohammedan. I was both. I was nothing. I was all. I
discern God in both. There is no Hindu and no Mussalman. To him who is
free from delusion, Hindu and Mussalman are the same. Remove the
shroud and behold the miracle!"

The shroud was removed. A large quantity of flowers was seen under it.
Half of the flowers was taken by the king of Kashi and burnt on the
bank of holy Ganga. The ashes were then buried and a temple was built.
This temple is known by the name of Kabir Chaura--a great place of
pilgrimage for the followers of Kabir. The other half of the flowers
was taken by the Mohammedans and buried at Moghar where Kabir died. A
mosque was built over the grave. This is a place of pilgrimage for the
Mohammedans.

Between the Poles of the Conscious and the Unconscious
there has the Mind made a Swing. Thereon hang all
Beings and all worlds, and that Swing never ceases it's Sway
Millions of Beings are there The Sun and the Moon in their
courses are there Millions of ages pass And The Swing
goes on. All Swing! The Sky and the Earth and the Air and the Water

Political Reflections

Many Hindus believe that the Ayodhya site is the birthplace of the
deity Lord Ram, and say the mosque was built in the 16th century over
an ancient temple marking the spot. An archaeological survey of the
site found no evidence of this, only that an unspecified structure
existed prior to the mosque.
But the issue reached a head in December 1992 when thousands of Hindus
descended on the site, tearing down the mosque and triggering deadly
communal riots across the country.

The issues revolve around the control of a site traditionally regarded
among Hindus to be the birthplace of the Hindu deity Rama,[1] the
history and location of the Babri Masjid at the site, and whether a
previous Hindu temple was demolished or modified to create the mosque.
The Babri Masjid was destroyed during a political rally which turned
into a riot on 6 December 1992. A subsequent land title case was
lodged in the Allahabad High Court, the verdict of which was
pronounced on 30 September 2010. In the judgment, the three judges of
the Allahabad High Court ruled that the 2.77 acres (1.12 ha) of
Ayodhya land be divided into three parts, with 1⁄3 going to the Ram
Lalla or Infant Rama represented by the Hindu Maha Sabha, 1⁄3 going to
the Sunni Waqf Board and the remaining 1⁄3 going to Nirmohi Akhara.
The judgment affirmed that the disputed land was the birthplace of
Rama as per the faith and belief of Hindus, and that the Babri Masjid
was built after the demolition of a Hindu temple, noting that it
wasn't built in accordance with the tenets of Islam.[2][3] The five
judges Supreme Court bench heard the title dispute cases from August
to October 2019.[4][5] On 9 November 2019, the Supreme Court ordered
the land to be handed over to a trust to build the Hindu temple. It
also ordered to the government to give alternate 5 acre land to Sunni
Waqf Board to build the mosque

Babur was the first Mughal emperor of India and the founder of the
Mughal empire. It is believed that one of his generals, Mir Baqi,
built the Babri Masjid ("Babur's Mosque") in 1528 on his orders.[18]
The belief came into currency since 1813–14, when the East India
Company's surveyor Francis Buchanan reported that he found an
inscription on the mosque walls which attested to this fact. He also
recorded the local tradition, which believed that emperor Aurangzeb
(r. 1658–1707) built the mosque after demolishing a temple dedicated
to Rama.[19][20] Between 1528 and 1668, no text mentioned the presence
of a mosque at the site.[21] The earliest historical record of a
mosque comes from Jai Singh II, a Rajput noble in the Mughal court,
who purchased the land of the mosque and the surrounding area in 1717.
His documents show a three-domed structure resembling the mosque,
which is however labelled the "birthplace" (chhathi). In the courtyard
can be seen a platform (chabutra) to which Hindu devotees are shown
circumambulating and worshipping.[22] All these details were
corroborated by the Jesuit priest Joseph Tieffenthaler half a century
later.[23] Tieffenthaler also explained the reason for this, "that
once upon a time, here was a house where Beschan [Vishnu] was born in
the form of Ram."[24]
Both the Hindus and Muslims are said to have worshipped at the
"mosque-temple," Muslims inside the mosque and Hindus outside the
mosque but inside the compound. After the British took over the State,
they put up a railing between the two areas to prevent disputes.[25]
In 1949, after India's independence, an idol of Ram was placed inside
the mosque, which triggered the dispute.[26][better source needed]

Just before 5pm on Friday the 8th of November, Brazil’s former
president Luiz Inácio Lula da Silva walked out of his prison in
Curitiba (Brazil). Lula went to prison in April last year on a 12-year
sentence. Five-hundred and eighty days of prison are now over, as the
Federal Supreme Court ruled that inmates who have not yet exhausted
their appeals should not be held in prison.
In addition to Lula, about 5,000 Brazilians – mostly poor and black –
can be released based on the Supreme Court’s decision. Many of them
have not been previously afforded the presumption of innocence, and
large numbers of them have been in prison without proper legal
defense.
The Supreme Court verdict was not directed at Lula, but at the
undemocratic nature of the judicial system which had held people in
prison before they had exhausted their appeals. Lula’s situation
mirrored that of these thousands of other prisoners. It was as part of
a judicial criticism of the unjust system that Lula was able to be
free.
It must be chilling for Bolsonaro to watch the television and see Lula
walk confidently out of his prison and into the political domain.
Elections have brought the left back to power in Argentina, with the
left retaining power in Bolivia. Even in Colombia, the left has made
significant gains. Mass protests in Chile and Ecuador suggest the tide
has turned in those two countries. Bolsonaro must know that the turn
to the left in Brazil is imminent.
The left now has its champion out on the streets.

The Iranian army has shot down an unidentified foreign drone near the
port of Bandar-e Mahshahr on the Gulf coast, according to reports from
the country’s news agencies.
The unmanned aircraft was downed over Iranian territory with
domestically manufactured Mersad surface-to-air missiles. Provincial
governor Gholamreza Shariati told agencies that the drone belonged to
a foreign country and that parts of it had been recovered in a nearby
lagoon.
Iranian news agencies said the drone was shot down in the country’s
airspace. The US has denied that the drone was theirs.
The seriousness of the latest episode will largely depend on the
ownership of the drone, and whether it was for military or civilian
purposes.
The port is the leading hub for Iranian activity in the Gulf, as well
as a petrochemical facility. Iran has claimed to have shot down drones
before, only for further news on the incidents not to be made public.

The wave of protests in Lebanon have been defined by hard partying
rather than destruction and violence
It’s midnight on a Tuesday night in Beirut and a crowd is forming
around a white van that has pulled up in Martyrs’ Square. A dense
cloud of smoke is being spewed out from the squealing tires of a
nearby BMW, and through it moves a mishmash of street children,
wealthy students, and shirtless men wearing masks. Some are shouting
at two figures scrambling over the roof of the van tying down speakers
and plugging in cables.
It’s nine days since Lebanese protesters spontaneously took to the
streets after a raft of new taxes were announced, including a $0.29
daily charge on voice calls made through WhatsApp. The eruption of
mass protests closed the country’s banks, universities and night
clubs, and led to impromptu all-night DIY raves springing up at
protest sites and in abandoned buildings across the country.
So far, this latest wave of protests in Lebanon has been defined
mainly by hard partying and celebration rather than destruction and
violence, however, there is edge of apprehension amongst the crowd in
the square as the sound system is set up. Standing to one side Bassam,
one of the crew of friends that rented the speakers and borrowed the
van, is concerned that they could be targeted by supporters of the
government. “We’re not sure if we’re going to play,” he says
anxiously. “We don’t want to make too much of a scene in the current
political climate. We’re going to make a decision sometime in the next
ten minutes.”
As well as demonstrating against government corruption and increased
taxation, these protests are pushing for an end to sectarianism in
politics. Instead of carrying the flags of the country’s various
religiously aligned political groups, protesters are, irrespective of
their sect, all carrying the national flag of Lebanon.
“Until recently, I had never been to a protest before,” says Fonzo, a
Beirut-based DJ who is friends with Bassam. “But, when I went to
Martyrs’ Square and saw the flags everywhere, I knew that this time it
was different.”
As time passes the crowd becomes increasingly impatient for music and
more people gather around the van. Eventually, when Fonzo moves behind
the decks and starts putting on his headphones, the crowd starts
chanting “thawra,” the Arabic word for “revolution”.
The chanting descends into cheering and dancing when he drops his
first tune – a house remix of Zaki Nassif’s 'Rajeh Yittammar', an
Arabic folk anthem from Lebanon’s civil war, which directly translates
as 'We Will Rebuild'. The remix was created by the Lebanese producer
and former NBA basketball player Rony Seikaly as a direct response to
the protests and was being played out on the streets of Beirut just
hours after he uploaded it to SoundCloud on October 21.
As soon as the music starts blasting and the crowd is moving, the crew
that brought the sound system quickly forget about keeping a low
profile – encouraging people with large flags to join them on the roof
of the van and spraying drinks all over the dancers at the front. As
Fonzo mixes deep house and melodic techno people are grinning and
slapping hands. A bearded hipster is dancing with a young Syrian
migrant who was selling flowers on the street. Strangers are sharing
cups of vodka and cigarettes.
For Goose, like many others in Lebanon, the DIY protest raves are a
powerful symbol. At a time of extreme political uncertainty, with
potentially grave consequences, they show that the population can work
together without being divided by religious identities.

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.’’

We hope for more and more people who live in mainland China to
recognise the importance of universal values and freedom.

International Markets

Pretty damning release says Brexit has been a catalyst in an “erosion
in institutional strength” which is now seriously undermining faith in
the UK

Euro 1.1024
Dollar Index 98.321
Japan Yen 109.03
Swiss Franc 0.9965
Pound 1.2797
Aussie 0.6857
India Rupee 71.3663
South Korea Won 1161.34
Brazil Real 4.1633
Egypt Pound 16.1432
South Africa Rand 14.9138

$EURUSD 1hr Chart: As of the close Friday (Nov 8th). The yellow
descending triangle wedge points directly to 1.0991 and as long as the
downtrend holds, that's the price level I'm looking for.

I don't foresee any economic news causing a reversal in the trend but
always be ready.

(Reuters) - Tesla Inc (TSLA.O) Chief Executive Officer Elon Musk and
noted short-seller David Einhorn mocked each other in open letters
published on Twitter on Friday, trading barbs clothed in polite
language.
Einhorn on Oct. 30 had told his investors at Greenlight Capital that
his fund had lost money on Tesla. Greenlight bet against the electric
carmaker, and shares rose in the second quarter.
Still, he told investors that Tesla “appears to continue to spin
positive PR ahead of the safety and fair treatment of its customers.”
Musk, who has a history of being playful on Twitter, began an exchange
by posting an open letter here on Twitter addressing Einhorn as "Dear
Mr. Unicorn (fabulous name btw)". Einhorn means unicorn in German.
Musk further added that Einhorn made numerous “false allegations”
against Tesla and offered “sympathies” for a drop in assets under
management.
“It is understandable that you wish to save face with your investors,
given the losses you suffered from Tesla’s successful third quarter,
especially since you’ve had several down years in performance and a
sharp drop in assets under management from $15 billion to $5 billion,”
Musk wrote.
Einhorn responded with an open letter here on Twitter, asking the
billionaire entrepreneur to be specific about false statements, so
that Greenlight could correct them.
“By continually changing the narrative and narrowly averting crisis
after crisis, you certainly have kept it interesting,” Einhorn said.
Einhorn said his hedge fund and Tesla had “some similarities and some
differences”.
“We both struggled last year. However, a key difference is that
Greenlight’s business has generated real profits for our investors
since we began in 1996,” Einhorn said.
Greenlight Capital first rose to prominence for making a prescient
call on Lehman Brothers’ accounting troubles before the firm’s
collapse.
Last year, it compared Tesla to Lehman and earlier this year said the
company appeared to be “on the brink” of failure.
Investors in the past have shown impatience with Tesla’s failures to
meet financial and production targets. The carmaker, however, put some
concerns to rest after delivering a surprise profit in its third
quarter.
Musk invited Einhorn to meet him and tour Tesla’s facilities to learn
about the company’s progress.
“Finally, please allow us to send you a small gift of short shorts to
help you through this difficult time,” Musk said, signing off as
“Treelon Musk.”
Einhorn welcomed the offer to learn more about Tesla.
“I think facility visits would be fun (can we start in Buffalo?). I
might learn the difference between your alien dreadnought factory and
cars made by hand in a tent.”

“But it is a curve each of them feels, unmistakably. It is the
parabola. They must have guessed, once or twice -guessed and refused
to believe -that everything, always, collectively, had been moving
toward that purified shape latent in the sky, that shape of no
surprise, no second chance, no return.’’

Commodities

There is certainly a Fin de siècle even apocalyptic mood afoot. The
conundrum for those who wish to bet on the End of the World is this,
however. What would be the point? The World would have ended.

It’s hard to see this coincidence as anything other than unhappy for
Riyadh. To get the best price for its Aramco shares, it needs to stop
the oil price from weakening.
Yet this leaves it at the mercy of members of the OPEC+ group of
nations that haven’t been doing their fair share of cutting crude
production to shore up the price: namely Russia and Iraq, who’ve
preferred to let the Saudis shoulder the burden along with their
allies Kuwait and the United Arab Emirates.

Emerging Markets

China has exerted the power of pull over a vast swathe of the world
over the last two decades. We can call it the China, Asia, EM and
Frontier markets feedback loop.
This feedback loop has been largely a positive one for the last two
decades. With the Yuan now in retreat [and in a precise res- ponse to
Trump], this will surely exert serious downside pressure on those
countries in the Feedback Loop.
To wit, emerging market stocks closed down for 11 days running , 12
being an all-time record which was narrowly missed.
The Purest Proxy for the Chi- na, Asia, EM and Frontier markets
feedback loop phenomenon is the South African Rand aka the ZAR.

Frontier Markets

Sub Saharan Africa

From a one-story house with mustard-colored walls off a bustling road
in Mauritius, Olivier Bancoult is defying the U.K. by plotting a
return to the tiny tropical island where he was born.
A 55-year-old native of the remote Chagos Islands in the Indian Ocean,
Bancoult heads a group of mostly elderly women who, like him, were
expelled shortly after Britain bought the archipelago from its
then-colony Mauritius in 1965.
His campaign has taken him to London and the United Nations and
secured him a meeting with Pope Francis.
As a young boy, Bancoult and the other roughly 2,000 inhabitants of
Chagos were deported to the U.K., Mauritius and Seychelles.
The new owners then gassed the residents’ pets, closed the coconut
plantations and allowed the U.S. to build a military base on the
biggest island of Diego Garcia.
With the exception of the air force base seen as crucial for U.S.
operations in the Middle East and Afghanistan, the U.K. has kept the
islands free of inhabitants by declaring an area the size of France a
protected marine reserve in 2010.
Only a few people are allowed to visit briefly each year, and they
can’t stay overnight.
My mother died here, without ever having been back to her home,”
Bancoult said in an interview. “I won’t let that happen to me.”
At a time when politicians in Britain are evoking its imperial past as
the U.K. prepares to quit the European Union, the country is under
international pressure to give up its last African colony, a sign of
its diminished global importance when only 80 years ago it held sway
over almost a quarter of the world’s population.
“What Britain is facing today is having to confront its colonial past,
whether it’s Chagos or Northern Ireland,” said Philippe Sands, a
London-based lawyer who serves as Counsel for Mauritius. “It’s the
story of its empire coming back to haunt it.”
In February, the International Court of Justice ruled the 1965
excision of the Chagos Archipelago from Mauritius unlawful because it
wasn’t based on the free will of the people concerned. In an advisory
opinion, the court stated that the U.K. has an obligation to end its
administration of the archipelago “as rapidly as possible.”
Then, in May, the UN General Assembly affirmed the ruling by an
overwhelming majority, with 116 member states voting in favor of a
resolution setting a six-month deadline for the U.K. to withdraw. Only
six members rejected the proposal -- the U.S., Hungary, Israel and
Australia among them. The deadline expires on Nov. 22.
“A UN General Assembly resolution doesn’t mean you have to comply, but
obviously it’s very embarrassing for them,” said David Brewster, a
senior research fellow at the National Security College in Canberra,
Australia. “That’s what happens when you alienate your allies.”
At the end of his September visit to Mauritius, Pope Francis chided
the U.K., saying it needs to respect the wishes of international
institutions.
But things are unlikely to change overnight.
The U.K. argues it can’t give up the Chagos Islands for security
reasons. It doesn’t recognize Mauritius’s claim over what it calls the
British Indian Ocean Island Territory, or BIOT, a spokesperson for the
U.K.’s Foreign & Commonwealth Office said in an email.
“The joint U.K.–U.S. defense facility on the British Indian Ocean
Territory helps to keep people in Britain and around the world safe
from terrorism, organized crime and piracy,” the spokesperson said.
“The status of BIOT as a U.K. territory is essential to the value of
the joint facility and our shared interests -– an arrangement that
cannot be replicated.”
Mauritian Prime Minister Pravind Jugnauth, who won an election last
week, has vowed to pursue the decolonization process with “unflinching
determination.”
But he’s also tried to allay concerns about the future of Diego
Garcia, saying he has no objections to the base and is ready to enter
into a long-term arrangement with the U.S.

Lungu said at a media conference that the government is implementing
several policy measures to protect the vulnerable and reduce the cost
of running the government.
“The medium-term debt strategy has been developed to inform the path
for debt sustainability,” Lungu said.
The government has suspended some infrastructure projects and was also
curbing travel expenditure of senior officials, Lungu said.
Lungu said the government was also trying to ensure that only genuine
employees were on the public sector wage bill.
Zambia has made progress in its energy sector reforms, intended to
leave fuel imports to the private sector and to increase electricity
tariffs to cover the cost of producing the power, he said.
Lungu said Zambia could generate adequate resources internally to meet
its development needs but this was being compromised by low tax
compliance levels.
Zambia’s external debt rose to $10.05 billion at the end of 2018,
compared with $8.74 billion a year earlier, raising fears that the
country is headed for a debt crisis.
Zambia has delayed the receipt of loans totalling $2.6 billion
contracted last year in order to rein in its soaring debt.
Zambia will avoid a default and will continue to shun new loans as it
reins in lending and expenditure, Finance Minister Bwalya Ng’andu said
in August.

You will agree that the overall picture is not very pretty. The Canary
in the Coal Mine is Zambia.
“Investors have lost faith in government promises to get spending
under control and the government has fallen out with the IMF as well,”
he said. In Zambia, Eurobonds are trading at 60c in the $

This month, the month of November, marks two years since Zimbabwe's
former leader, Robert Mugabe lost power to his long-time ally and
lieutenant Emmerson Mnangagwa in a coup which was orchestrated by
military commanders. We shall be doing a series of papers based on
thematic areas to assess the performance of the Mnangagwa regime for
the past two years.

The first area of assessment is the protection of human rights. The
analysis proceeds on the view that by most credible accounts, human
rights were seriously imperiled under the Mugabe regime and it is a
good point to assess whether there has been any improvement. The
Mnangagwa regime started with bright promises of a new era. It touted
itself as a “New Dispensation”, attempting to contrast and disentangle
itself from the Mugabe regime. It also described itself rather
ambitiously as “the Second Republic” as if to summon good omens from
the propitious gods of politics.  However, there is nothing. on a
balance of probabilities. to support the grand claims of novelty and
difference from the Mugabe regime. Instead there have been  a series
of continuities from the old regime over the course of the two years.
The promise of a new dispensation has been nothing more than a mirage.

Failure to reform
The Mnangagwa regime had a great opportunity to demonstrate its
willingness and commitment to uphold and respect human rights by
swiftly repealing draconian legislation. The symbols of such
repressive laws were the Public Order and Security Act (POSA) and the
Access to Information and Protection of Privacy Act (AIPPA), both
products of the Mugabe regime with POSA having longer roots in
colonial legislation. It replaced the Law and Order Maintenance Act
(LOMA)  which ironically had been inherited at independence and used
by people who had been its victims during the colonial era. . However,
two years after the coup, both laws are still on the statute books.
The regime’s recent claims to the world that they have been repealed
are patently false. As a matter of fact, POSA has been repeatedly used
by the regime to ban demonstrations by members of the opposition and
trade unions. The pace of legal reforms in these areas have been slow.
Furthermore, the so-called amendments are no more than a fraud. For
example, in place of POSA, the regime is proposing a new law called
MOPO which in substance is no different. It is just like in 2002 when
the Mugabe regime repealed the 1960s repressive LOMA and replaced it
with POSA. The net effect is that colonial-style legislation continues
decades after independence.
Political rights
The continuation of repression is also evident in the area of
political rights. These include the rights to demonstrate and
petition, free speech and the freedom of assembly. These specific
rights enable people to participate freely in a democratic society and
to hold their leaders to account. However, as already pointed out,
POSA and AIPPA still stand in the way of the enjoyment of these
rights. Indeed, when the government invited the UN to assess
Zimbabwe’s situation, the world body sent a Special Rapporteur, Mr.
Clément Nyaletsossi Voule. His report was damning. It demonstrated
that the rights to assembly, demonstrate and free speech were heavily
restricted. More ominously the repressive use of these laws has been
supported by the judiciary. When the official opposition party tried
to hold demonstrations in August 2019, the police banned them at the
eleventh hour. When the opposition party challenged the bans, the
courts threw out the legal challenges effectively supporting the
government ban. When a junior doctors’ union leader, Dr Peter
Magombeyi led his members demanding better working conditions, he was
abducted and held incommunicado for nearly a week. The young doctor
was only released after relentless pressure from fellow doctors,
including senior consultants who joined the protests. Leaders of a
union of rural teachers (ARTUZ) have been arrested on spurious charges
for daring to stand up for their members’ rights. Even their lawyer,
Douglas Coltart has also been abused and arrested in the course of
representing his clients. More recently, the courts have also backed
government bans on attempts by civil servants’ unions to demonstrate
for decent wages. With the political referee on the right of the
government, dissenting voices have very limited scope and space.
Deployment of the military
Two events illustrate the perilous nature of human rights in Zimbabwe.
The first was the killing of civilians by members of the military and
police on 1 August 2018 during election-related protests. The second
episode was the protests in mid-January 2019 when soldiers were also
deployed on the streets of Harare. Human rights organizations such as
Human Rights Watch reported that 17 people were killed after security
forces used live ammunition against protestors. In both cases, the
government took the drastic step of deploying soldiers ostensibly to
assist the police to quell demonstrations.. A commission of inquiry
established by Mnangagwa to investigate the events of 1 August 2009
found that the military and police were  responsible for the killing
of civilians. However, no action has been taken to hold the
perpetrators to account. When the State does not prosecute or punish
offenders, it encourages them to do the same in future. It promotes
impunity. Given the length of time that has passed since the Kgalema
Motlanthe Commission presented its report (December 2018) there is no
appetite to implement its recommendations notwithstanding the regime’s
claims to the contrary. After the expensive show of the Motlanthe
Commission which was established to pull wool over the eyes of a
shocked international community, the regime did not even bother to
investigate the killing of civilians during the January protests.
These two episodes demonstrated the worst excesses of state power and
the fact that the regime which had promised much was in reality
unreformed and unrepentant.
De facto amnesty
Under the Mugabe regime offenders got protection from prosecution
through general amnesties and presidential pardons. More often than
not, the protection was through the Attorney General’s deliberate
failure to prosecute offenders. In this regard, very little has
changed. Failure to prosecute offenders is tantamount to giving a
general amnesty without declaring one. It’s a de facto amnesty
extended to offenders. It makes them beholden to the regime while also
giving them an incentive to re-offend knowing very well that they will
not be held accountable for their misdeeds. It’s not surprising that
after the killing of civilians in August 2018, they did not hesitate
to kill again in January 2019. It has to be said that the regularity
with which soldiers have been deployed by the regime is another signal
of its inclination towards repressive instruments. Authoritarian
regimes tend to resort to coercion when they are unable to have their
will through consent. The frequent resort to the military is
consistent with repressive regime’s proclivity towards coercion as an
instrument of control.
Property rights
When the regime started, Mnangagwa pledged a new era in which property
rights would be protected. He was keen to distinguish himself from his
predecessor who had earned a reputation for disregarding property
rights through the controversial Fast Track Land Reform Program that
he led from 2000. While making it clear that he would not reverse the
land reform, he pleaded to compensate the dispossessed white farmers
and carry out a land audit to ensure fairness and effective use of
land. However, two years down the line the land audit remains a pipe
dream. Vast tracts of land remain unused or under-utilised in the
hands of absentee landlords who hold multiple farms individually or
though family members and associates. Underutilising land has added to
the woes caused by drought resulting in poor levels of production. A
country that used to feed itself and others is still begging for food.
Neighbours who have also experienced droughts including Zambia and
South Africa are selling food to Zimbabwe, a sign that some of the
food shortages are man-made. There has been some effort at setting
aside money to compensate the white farmers, but it is only a modest
sum; more an act of symbolism than substantive compensation. The
regime may have hoped that this symbolism would find recognition among
the Western Powers and buy it some favours in the re-engagement drive.
It was not a bad idea but it got drowned in the maelstrom of the
killings of civilians and clampdown in political rights.
The ghost of farm invasions
More recently however there have been cases of further dispossession
of land. Earlier when a coffee farmer in Manicaland was affected by an
invasion the government intervened following an outcry over the
invasion. The intervention came in favour of the white farmer. This
week, another white farmer was evicted from his farm in Chinhoyi. In
this case, the government has not intervened. What has changed?Perhaps
the government was desperate for inclusion and reengagement when it
intervened in the coffee farmer’s case. Prospects of successful
reengagement existed. It’s failure to intervene over the Chinhoyi
farmer comes in the wake of increasingly frosty relations with the
West exacerbated by the clash over sanctions and a diplomatic row with
the US. It’s possible that the government does not care anymore the
same way it did at the time of the coffee farmer’s situation. But the
images don’t help the regime’s cause. To be seen condoning
dispossession in this day and age, something that should have been
part of the past is self-defeating. There is so much unused land in
Zimbabwe that it makes no sense whatsoever to take over a productive
farm. It’s a gross failure of leadership that a country which is
importing food at high cost is busy dispossessing productive farmers
when there is an abundance of under-utilised land across the country.
This is why it is true that while drought is a natural phenomenon,
famine is a man-made calamity.
Spurious charges and detentions
The Criminal Law (Codification) Act became the favoured piece of
legislation to persecute political rivals during the Mugabe regime.
One of the more notorious offences was insulting the president. Many
were detained under the presidential insults provisions. Two years
after Mugabe fell, the law is still in use, reminding people to tread
with caution. Another common charge is attempting to subvert a
constitutionally elected government, a statutory relation to treason.
Prominent politicians and political activists were detained for
allegedly breaching these provisions under the Mugabe regime. In the
two years that Mnangagwa has been in power there has been a flurry of
arrests and detentions for breaching these provisions. The
prosecutions invariably collapse and sink into the quick-sands of the
justice system, but not before political opponents and activists have
been immobilized and sufficiently harassed. A more insidious
phenomenon is the spate of abductions and torture of political
activists. The regime has blamed a “Third Force” for these abductions,
which ironically exposes it as weak and lacking control of the
country’s security situation. This year alone a number of political
activists and civil society campaigners have been abducted and
tortured. No one has been held accountable. This has extended to
comedians and musicians who are regarded as promoting an
anti-government narrative. This spreads fear among the citizens,
causing them to recoil and avoid challenging or criticising the
government.
Real threat or Paranoia?
The state of insecurity among citizens is reflected by Mnangagwa’s own
fears for his own safety. His security arrangements have become
visibly enhanced ever since he took power. Indeed, it seems he has a
bigger human fortress than his predecessor ever had. Perhaps it is a
circumstance of the manner in which he ascended to the presidency
which created many enemies and unhappy people. Oddly enough, while
there was an alleged assassination attempt at a political rally in
Bulawayo last year, there has not been a single arrest or public
prosecution of offenders. This leaves a yawning gap as to what is
going on within the upper echelons of power. It seems more likely that
there is mistrust among members of the establishment.
Conclusion
For years, Zimbabwe’s reputation regarding human rights has been
abysmal. The fall of Mugabe was seen by some as a landmark moment
which would represent a break with the past. These were misplaced
hopes. It should have been clear that a coup would not represent
serious change. The authors of the coup were motivated by a desire to
wrestle power from a rival faction and to protect their interests. It
was not intended for major transformation. The coup would also
strengthen the militarisation of the state which was already in motion
long before Mugabe was forced out. A militarised state relies upon
coercion and it is not amenable to the protection of human rights.
When Zimbabweans marched freely before Mugabe’s removal, one question
that a few of us asked was how long the honeymoon between the military
and the citizens would last. As it turned out, it was very brief. It
has been a terribly unhappy marriage; a fallacious union built on the
blessings of men in fatigues; an unholy union which has left citizens
utterly flummoxed and traumatized. In the next piece we will look at
the regime’s performance in respect of the economy.

‘’The choice of that moment is the greatest riddle of history’’ and
also said “If the crowd disperses, goes home, does not reassemble, we
say the revolution is over.”

Lagos (AFP) - In a move Nigeria's president hailed as a "landmark
moment", Africa's largest oil producer approved legislation this week
to bolster its share of revenues from international majors.
The authorities say the amendment -- heralded as the biggest change in
decades to its production sharing deals -- will bring billions of
dollars into state coffers as the country belatedly claims an
"equitable share" of its vast natural resources.
But oil industry insiders have slammed the change as an ill-planned
attempt to grab money and warn that it could prompt an exodus of
investments as foreign firms turn their backs on Nigeria.
The changes redraw the Deep Offshore (and Inland Basin Production
Sharing Contract) Act which been in force since it was passed in 1993
when Nigeria was under military rule.
The law mandated that the split of revenues between the state and the
international oil firms should be reviewed if prices climbed over $20
per barrel.
But while crude has soared far above that point over the past two
decades, a revision of the formula for revenue sharing was never
carried out.
Buhari's government have accused previous Nigerian lawmakers of having
vested interests in making sure the bulk of oil revenues remained in
private hands.
The new law sets a staggered "royalty rate" on crude oil sold above
$20 -- rising to the highest rate of 10 percent if the price reaches
more than $150 a barrel -- with the revenue due to the government
increasing in line with oil price rises.
In a second revenue stream, oil companies will also pay a flat tax of
10 percent on off-shore fields and 7.5 percent on inland fields,
within specified depths.
Buhari's office has estimated the change will bring in at least $1.5
billion in added revenue by 2021.
But according to experts, oil companies involved in off-shore
production could review their investments, reducing the revenue boost
Nigeria hopes to achieve.
As oil prices slid in recent years, meaning a drop in revenue for the
government, Nigeria has been steadily increasing pressure on some of
the world's biggest energy companies -- Shell, Exxon Mobil, Chevron
Eni, Total and CNOOC -- who extract most of the crude oil in Nigeria.
About half of government spending is reliant on income from oil sales.
In mid-October Nigeria’s government controversially claimed oil
multinationals owed the country $62 billion in back revenues, which
the oil firms disputed.
"We have no idea how the government arrived at such an amount," a
representative of one of the major oil firms told AFP on condition of
anonymity.
Since the claim, a government minister conceded the money was unlikely
to be retrieved in its entirety but that a settlement could be
reached.
Emerging markets expert John Ashbourne insisted that the "fiscal
crisis, with the federation forced to dedicate a larger and larger
share of its revenue to paying off its debts" is a factor in Nigeria
changing its agreements with oil firms.
The attempt and the latest changes in the law signal a more stringent
economic environment for multinationals, whose response could
significantly impact Nigeria's oil-reliant economy.
Major oil companies have long been accused of having a cosy
relationship with lawmakers in Africa's largest economy.
Despite large oil and gas reserves, the majority of people in Africa's
most populous country live in extreme poverty, on less than $1.90 a
day.
Since the 2000's there have been repeated calls to amend the 1993 law
-- but until the latest push the measures failed to get past Nigerian
lawmakers.
A report by the Nigeria Extractive Industries Transparency Initiative
said if contracts with oil companies were reviewed in 2008 Nigeria
would have earned at least $16 billion in extra government revenue
over the following decade.
An oil industry source, speaking to AFP on condition of anonymity,
warned the bill was the "beginning of the decline of deep water
investments" in the country.
"Oil companies have already started to pull out investments out of
Nigeria," he said.
Some in the oil industry claim that extracting oil from off-shore
basins, drilling below the sea in Nigerian territorial waters, is
already expensive and that the new amendments could make them
unprofitable.
"It is possible that this new tax will push costs over the break-even
point," said Ashbourne.
But he added that oil companies tend to exaggerate their warnings of
negative repercussions when they find themselves facing an increased
tax bill.
"Resource firms always threaten this when faced with new taxes; but
they seldom actually abandon their operations."

Five oil companies involved in the development of oilfields in
Uganda’s Albertine Graben have been given one month to decide on
several government proposals.
Executives from Total E & P, China National Offshore Oil Company and
Tullow met with President Yoweri Museveni on October 31 at State
House, Entebbe to discuss key issues still hindering a final
investment decision.
The Permanent Secretary in the Ministry of Energy and Mineral
Development Robert Kasande confirmed attending the meeting and said,
“We have given them a month to come back to us.”
Sources said that top of the agenda of the meeting was a failure to
agree on an assessment by Uganda Revenue Authority of $167 million as
due capital gains tax from Tullow’s aborted farmdown of 21.5 per cent
of its current 33.3 per cent to Total E & P and CNOOC.
The government is said to be against a proposal by Total to cover the
difference of $83.5 million to be reclaimed at a later date from
Tullow’s recoverable costs once the farmdown has been completed.
The other contentious issues include a demand by the joint venture
partners to be allowed to recover their costs before payment of taxes.
The government has suggested a formula that puts a cap on recoverable
costs each year to allow it recover some taxes.

Kenya