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Macro Thoughts

Home Thoughts

Baby-snatching eagles with deadly talons strike in Mandera. They prey
on human babies below 3. Have appetite also for bald heads. Women
mobilise to fight back. Bald heads use metallic hats, wigs

It is one of only two extant species in the family Hippopotamidae,

Object from the exhibition We call them Vikings produced by The
Swedish History Museum
Cowrie shell
Imported cowrie shells
were sometimes worn as pendants. From the Red Sea or Indian ocean area.
Grave find, Bjästavs, Sanda, Gotland, Sweden. SHM 1763

                        I HAVE seen     
A curious child, who dwelt upon a tract
Of inland ground, applying to his ear   
The convolutions of a smooth-lipped shell;     
To which, in silence hushed, his very soul              5
Listened intensely; and his countenance soon   
Brightened with joy; for from within were heard
Murmurings, whereby the monitor expressed       
Mysterious union with its native sea.   
Even such a shell the universe itself           10
Is to the ear of Faith; and there are times,   
I doubt not, when to you it doth impart
Authentic tidings of invisible things; 
Of ebb and flow, and ever-during power;
And central peace, subsisting at the heart              15
Of endless agitation.

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

Political Reflections

Adds new emails and evidence

Mr. Giuliani was expressing the desires of the President of the United
States, and we knew that these investigations were important to the
President."

Pollice verso or verso pollice is a Latin phrase, meaning “with a
turned thumb”, that is used in the context of gladiatorial combat. It
refers to the hand gesture or thumb signal used by Ancient Roman
crowds to pass judgment on a defeated gladiator.
The Madison Square UFC 244 verso pollice moment is a Shakespeare level
moment for President Trump and of more import than the Impeachment
process because Impeachment is political and therefore the outcome
should split on Political Party lines.
The Republican Party will be making a hard nosed political calculation
this weekend that if the President is getting booed at a UFC event,
the Base is lost.
Vice President Pence who is an evangelical Christian [and is in the
habit of praying with another evangelical Christian and Nobel Prize
Winner far away in Addis Ababa, allegedly] is the coming Man and this
could happen real quick.

The Chinese could do as they please.
The US was fighting with one hand tied behind its back.
Asymmetry of force is a key goal in any conflict.

They further have 3 models of conventional cruise missiles, with the
HN-3 reaching out to 3000 km.
BRI is the artery. Missiles are the blood.

And China took it from the US.

The US cannot bully the Chinese militarily. They have the Navy boxed out.

China doesn't play by the rules. Their missiles have declared the end
of US hegemony. And the West paid for them.

China wants a deal but is prepared for the worst-case scenario, a
prolonged trade war.

@IvanTheK put it pithily and tweeted ‘’CHINA TO THE CHOSEN ONE: GFY’’
The Stock Markets fell sharply. The overarching Question Investors
need to ask themselves is this
Is this a permanent rupture? Or is this a crazy off the charts
escalation just before a Deal? The Markets pirouette on the answer to
this question.

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.

In 2016 China’s Net Outward Investments (Investments - Divestments)
reached 278bn USD, for 2019 this number is likely to go negative >>

I only recently discovered Ecclesiastes and clearly Xi was ahead of me
in this regard.
Ecclesiastes 1:2-11 2 Vanity[a] of vanities, says the Preacher 2 Vani-
ty[a] of vanities, says the Preacher, vanity of vanities! All is
vanity. 11 There is no remembrance of former things,[c] nor will there
be any re- membrance of later things[d] yet to be among those who come
after.

the feedback loop and the risks of die back where we enter a phase of
‘’cascading system collapse’’

The biggest fish, which can reach 12m (40ft) long and weigh 40 tonnes,
ingest hundreds of cubic metres of water a day and filter it to
extract tiny plankton.

This is a Revolution and it is a Global Phenomenon.

International Markets

Euro 1.1077
Dollar Index. 97.88
Japan Yen 108.59
Swiss Franc 0.9908
Pound 1.2928
Aussie 0.6799
India Rupee 71.75
South Korea Won 1177.78
Brazil Real 4.1967
Egypt Pound 16.099
South Africa Rand 14.7574

Commodities

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 response to
Trump], this will surely exert serious downside pressure on those
countries in the Feed- back Loop.
The Purest Proxy for the China, Asia, EM and Frontier markets feedback
loop phenomenon is the South African Rand aka the ZAR.

The political crisis in Lebanon has sent the yields on some of its
dollar bonds into triple digits.
Rates on the government’s $1.2 billion of notes maturing in March next
year climbed 15 percentage points on Tuesday to 103%.
They were at 13% five weeks ago, just before the start of nationwide
protests that led to the resignation of Prime Minister Saad Hariri and
exacerbated the nation’s economic strife.
With Lebanon viewed by many bond traders as a default waiting to
happen, cash prices have become more important than yields as they
factor in potential recovery rates.
That’s inverted the government’s curve and distorted yields at the
shorter end. The price of Lebanon’s 2020 debt is 78 cents on the
dollar, while that of its April 2021 securities is 56 cents.
Still, it’s rare for a nation’s dollar yields to reach triple figures.
Even in Argentina -- where investors are far from convinced that the
incoming leader Alberto Fernandez can fix the country’s economic woes
-- they haven’t gone far beyond 85%. Some of Venezuela’s short
term-term bonds reached 100% around the time it defaulted in late
2017.
Lebanon, one of the world’s most indebted nations relative to the size
of its economy, has consistently said it will honor its liabilities
and has downplayed any talk of a restructuring. The country has never
defaulted on its government debt, most of which is held by local
banks.
According to central bank Governor Riad Salameh, Lebanon has the money
to repay $1.5 billion of securities maturing at the end of this month.
The next Eurobonds after that come due in March 2020.

Prolonged stand-offs eviscerate economies, reducing opportunities and
accelerate the negative feedback loop.

This Phenomenon could spread like wildfire

Frontier Markets

Sub Saharan Africa

This is the REAL Emmerson Mnangagwa Government on display. It has
closed all democratic space & uses violence to enforce its Rule by
Brutality

#BREAKING Police have fired teargas and used truncheons to violently
disperse MDC supporters outside the party's headquarters in Harare
where they were waiting to hear from party leader Nelson Chamisa in a
speech dubbed the 'Hope of the Nation Address'

At the time of the Jasmine Revolution in Tunis the crowds chanted “We
are not afraid, we are not afraid, we are afraid only of God.”

In Dubai, sharing our story and incredible potential with
entrepreneurs and investors, particularly in the crucial sectors of
fuel and power. I will continue to toil both at home and abroad to put
Zimbabwe back on its feet!

Zambia’s central bank raised its key interest rate for a second time
this year, bucking a global easing trend, in a bid to support its
currency and tame inflation.
The Bank of Zambia increased the rate to 11.5% from 10.25%, Governor
Denny Kalyalya told reporters Wednesday in Lusaka, the capital. That’s
the highest level since May 2017.
Key Insights
The central bank faces a trade-off between stabilizing the kwacha to
help control inflation and boosting an economy that expanded at the
slowest since least the first quarter of 2016 in the three months
through June.
Inflation accelerated to 10.7% in October, the highest level in three
years, as the worst drought in almost four decades in the southwest of
the country caused crop failure.
Kalyalya said while the MPC was mindful of the slowdown in economic
growth, the upside risks to inflation have increased and there is a
need to restore macro-economic stability.
The central bank sees the rate staying above the 8% upper end of its
target range until at least 2021.
The lack of rain also drastically curbed output at the hydropower dams
that Zambia relies on for about 80% of its electricity generation, and
the resultant power cuts that last more than 15 hours a day are
weighing on the economy.
The electricity cuts also mean that many businesses run on generators,
increasing their input costs because the kwacha’s 18% drop against the
dollar this year has pushed up fuel prices.
The nation’s power utility has asked the energy regulator to allow it
to more than double prices, which will add to inflationary pressure.
The Energy Regulation Board said it would announce new energy tariffs
this month

“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 $.

During his second day on the stand, Jean Boustani told the federal
jury in Brooklyn, New York, that when a Mozambican demanded a $50
million “success fee” to get approval for a maritime project, he
immediately notified his boss, French-Lebanese billionaire Iskandar
Safa, the co-owner of Privinvest. Safa was appalled, Boustani said.
“Mr. Safa said ‘Jean, look, I’ve never seen this in my life,’”
Boustani said. “He said ‘I hope you will be successful in this, for
the company, for you, but I don’t see this going far with such an
attitude, but look, keep the tango dancing, as we say. Let’s see where
it will go. I don’t see it going now, but just keep tango dancing with
these guys and let’s see where it will go.’”
Boustani denied paying any bribes or kickbacks to either Mozambican
officials or bankers. During the trial, former Credit Suisse bankers
Andrew Pearse and Surjan Singh told jurors that Privinvest paid them
tens of millions of dollars to help arrange loans for three coastal
projects that eventually swelled to $2 billion.
Pearse testified Boustani paid him $45 million.
Pearse testified Ndambi Guebuza, the son of Mozambique’s former
president, collected at least $50 million in illegal payments for
helping introduce Privinvest executives to his father.
But Boustani said that during a personal audience with then-President
Armando Guebuza and his son in early 2013, he told the president a
Mozambican man had asked for a $50 million bribe, stunning the
country’s leader.
“The president was frozen, then he looked at his son,” Boustani recounted.
Then he quoted the president’s response: “Mr. Boustani, you are
talking about big strategic projects. My answer to your question is
simple: nobody, nobody, not me, not any public official in Mozambique
will be allowed to take one penny in order to do their job for this
project. You say no and you come to me and you tell them ‘no.’ I said,
sorry but I had to do it.”

Global heating is “supercharging” an increasingly dangerous climate
mechanism in the Indian Ocean that has played a role in disasters this
year including bushfires in Australia and floods in Africa.

Kenya

Kenya’s Treasury has raised 66 billion shillings ($650.89 million) out
of a target of 78 billion in dividends and retained earnings from
state corporations, the acting finance minister said on Wednesday.
Ukur Yatani said state companies had not been remitting their
dividends at the end of every financial year as required by law,
denying domestic reports that the move to take the cash would starve
the banking sector of liquidity.
“These are just surplus funds. Their operational accounts and all
other matters have not been touched,” he told Reuters, adding that the
extra cash would be spent on development projects.

A second supplier said: “You get disrupted in the middle of (the
contract) ...either because you are not speaking to the right people,
making commitments to the right people, or your payments may just be
delayed.”
George Muiruri, managing director of Leakey’s auctioneers, says
repossessions among government suppliers had increased. “They are
financially stuck,” he said, adding he was dealing with at least one
such case every day.
Central bank governor Patrick Njoroge said in late May that delayed
payments to suppliers, the bulk contracted by the government, made up
10 percent of the total volume of bad loans.
Such loans stood at 12.4 percent of the total in April, the highest
level in more than a decade.

Market Capitalization: 180,759,023,016
EPS:             5.25
PE:                 9.124