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Macro Thoughts

Home Thoughts

“The moment is not properly an atom of time but an atom of eternity,”
Kierkegaard wrote in contemplating the paradoxical nature of time half
a century before Einstein forever changed our understanding of it.
As relativity saturated the cultural atmosphere, Virginia Woolf was
tussling and taffying with time’s confounding elasticity, the
psychology of which scientists have since dissected.
We are beings of time and in time — something Jorge Luis Borges spoke
to beautifully in his classic 1946 meditation on time:
“Time is the substance I am made of. Time is a river which sweeps me
along, but I am the river; it is a tiger which destroys me, but I am
the tiger; it is a fire which consumes me, but I am the fire.”

Political Reflections

As always, he says the quiet part out loud.

On super-spreaders, expert says, “So far there is no proof this has
occurred.” #WuhanCoronavirus

If there's one thing that we know from history, it's that a deadly new
disease will arise and spread around the globe.
But "there's one area though where the world isn't making much
progress," Gates said, "and that's pandemic preparedness."
The likelihood that such a disease will appear continues to rise. New
pathogens emerge all the time as the world population increases and
humanity encroaches on wild environments.
It's becoming easier and easier for individual people or small groups
to create weaponized diseases that could spread like wildfire around
the globe.
And in our interconnected world, people are always hopping on planes,
crossing from cities on one continent to those on another in a matter
of hours.
Gates presented a simulation by the Institute for Disease Modeling
that found that a new flu like the one that killed 50 million people
in the 1918 pandemic would now most likely kill 30 million people
within six months.
And the disease that next takes us by surprise is likely to be one we
see for the first time at the start of an outbreak, like what happened
recently with SARS and MERS viruses.
According to Gates, a small non-state actor could build an even
deadlier form of smallpox in a lab.
If you were to tell the world's governments that weapons that could
kill 30 million people were under construction right now, there'd be a
sense of urgency about preparing for the threat, Gates said.
"In the case of biological threats, that sense of urgency is lacking,"
he said. "The world needs to prepare for pandemics in the same serious
way it prepares for war."

“It is a numbers game, the more cases you have the more likely there
are going to be mutations that could change the virus in a significant
way,” said David Sanders, a professor of biological sciences at Purdue
University who studies Ebola.
“The more it persists, the more likely we are going to be thrown a curve.”

International Markets

Euro 1.1083
Dollar Index 97.565
Japan Yen 109.53
Swiss Franc 0.9687
Pound 1.3128
Aussie 0.6860
India Rupee 71.2293
South Korea Won 1168.52
Brazil Real 4.1829
Egypt Pound 15.794
South Africa Rand 14.364

Our recently increased sub estimates come down on the lighter 1Q
guide, & we now expect 26.9M net adds in 2020, compared to 27.8M in
2019.
But we continue to remain positive on NFLX shares & our SOP-driven PT
moves to $410 based on a 17.5x multiple on 2021E UCAN Streaming EBITDA
of $3.8B, 10x multiple on 2020E Int’l Streaming Revenue of $13.3B, and
5x multiple on 2021E US DVD EBITDA of $92M.

My Mind kept to an Article I read in 2012 ‘’Annals of Technology
Streaming Dreams’’ by John Seabrook January 16, 2012.
“People went from broad to narrow,” he said, “and we think they will
continue to go that way—spend more and more time in the niches—
because now the distribution lands-cape allows for more narrowness’’.
Netflix is not a US business, it is a global business. The Majority of
Analysts are in the US and in my opinion, these same Analysts have an
international ‘’blind spot’’
Once Investors appreciate that the Story is an international one and
not a US one anymore, we will see the price ramp to fresh all-time
highs.

Commodities

Emerging Markets

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.’’

Frontier Markets

Sub Saharan Africa

Year-on-year inflation remains high, “but that’s expected, that
happens when you liberalize a currency,” Ncube said Wednesday in an
interview with Bloomberg Television at the World Economic Forum in
Davos.
After a decade of using a basket of foreign currencies, including the
South African rand and the U.S. dollar, Zimbabwe last year
reintroduced its own tender. It has plummeted to 17.1950 per dollar
since a 1:1 peg was removed in February.
The southern African nation’s statistics agency suspended publishing
year-on-year inflation data after June, when monthly inflation peaked
at 39.3%.
It still releases the consumer price index, which shows annual costs
rose 521% in December, the most since a hyperinflation episode in
2009.
While monthly price growth has cooled, it was still at 16.6% in
December, whereas Ncube said in February it could be close to zero by
the end of 2019.
Still, investors can believe his government’s pledge to rein in
inflation because they have “walked the talk,” he said.
“We said that month-on-month inflation is going to be stabilizing and
going to be dropping, that’s what has been been happening,” Ncube
said.
“We believe that we are on our way to dealing with inflation. It will
take time, but we are headed there.”

#Malawi Anti-Corruption Bureau (ACB) has arrested the Chief Executive
Officer of the country's third largest bank for allegedly offering
bribe judges hearing a case on the country's disputed elections

Egypt may be “reconsidering” its support for Libya's powerful
commander Khalifa Haftar, an Algerian source familiar with the
conflict in Libya has told Middle East Eye (MEE).
The information was corroborated by an Egyptian diplomatic source,
who, short of confirming the turnaround, acknowledged that
“communication [between Cairo and the Libyan commander] has
considerably deteriorated”.
The Algerian source also reported that the Egyptian government has
decided to “transfer the Haftar case to military intelligence”, and
that President Abdel Fattah al-Sisi had “cancelled a recently
scheduled meeting” with the Libyan field marshal.
'Communication [between Cairo and the Libyan strongman] has
considerably deteriorated'
The breakdown might have prompted Haftar, who is backed by the United
Arab Emirates (UAE) and Saudi Arabia, to seek support elsewhere,
including in Russia and Greece.
On 17 January, Haftar met with officials in Greece who “encouraged him
to sign a ceasefire” at the recent Berlin conference on the Libyan
conflict.

I learnt from William Dalrymple in an article in the Financial Times
that it was a a Berber cavalry commander Quintus Lollius Urbicus who
after Hadrian’s death, was sent westward, to the furthest and most
uncivilised extremity of the empire, becoming the first African
Governor of Britain.

Modern Day Algeria finally rid itself of Bouteflika the wheelchair
bound last year but North Africa otherwise known as the Maghreb
remains volatile and is still yet to emerge from the ''Arab Spring''
which was triggered by the self-immolation of Mohamed Bouazizi on 17
December 2010, which then begat the Egyptian revolution of 2011, also
known as the January 25 Revolution, which toppled Hosni Mubarak and
then circled back to topple Muammar Gaddafi [“I tell the coward
crusaders: I live in a place where you can’t get me. I live in the
hearts of millions.”]

Egypt has been the ''Darling'' of International Investors and the
destination for the best carry Trade in the World for a number of
years.

Since 2010 and over the last ten years, Middle Powers like Turkey, the
UAE [whom Mattis characterised as ''Little Sparta''], Qatar, Saudi
Arabia and Turkey [Israel and Russia too but they cannot be
characterised as Middle Powers] have all extended their reach into the
Maghreb and the Horn of Africa. The schism which started in the Gulf
has spread like a virus. I remain a little surprised that the UAE and
Saudi Arabia have not visited economic warfare on Istanbul because it
does look ripe for the plucking but then Al-Thani is probably
providing a backstop.

The main Theatre for Proxy operations is Libya. Gaddafi characterised
Libya as a Cork and he said to Tony Blair that if he was toppled Libya
and Africa would be uncorked. It was a prescient prediction. On one
side we have General Haftar a dual Libyan-American citizen who is the
Commander of the Libyan National Army (LNA) and is bankrolled and
supported by the UAE, Egypt, France and Greece On the other side we
have the Government of National Accord led by Prime Minister Fayez
al-Sarraj and supported by Turkey and Qatar because they have been
joined at the hip for a while now. President Putin started on Haftar's
side but likes to play a ''balancing'' role and might well eventually
align with Turkey. Germany is currently holding a Peace Conference
this week. The US is sidelined other than making te odd phone call.

Libya is clearly an example of geopolitical ''cliff edge'' risks. The
Horn of Africa exhibits entirely similar characteristics. In fact,
from the Maghreb to the Sahel to the Horn of Africa, we are witnessing
a surge in asymmetric warfare and the intrusion of Middle Powers.

We believe that the Africa discount is due to a reality-perception
gap. This creates an attractive entry point

Kenya

Prime Minister Johnson and President Kenyatta met at Downing Street on
21 January where they agreed a new strategic partnership and issued a
joint statement.
Prime Minister Johnson and President Kenyatta said in a joint statement:
As Commonwealth nations and champions of the rules-based international
system, Kenya and the United Kingdom of Great Britain and Northern
Ireland enjoy a deep, diverse and historic relationship.
It is anchored by a shared set of values and a mutual understanding of
the benefits that can accrue from our strong bilateral collaboration.
On 21 January, we – His Excellency President Uhuru Kenyatta and Prime
Minister Boris Johnson – agreed to elevate this relationship to an
even more ambitious Strategic Partnership between our two countries.
This will allow us to focus our collective expertise, resources and
leadership on the priorities – bilateral, regional and global – that
will help deliver more prosperous, secure and sustainable societies.
From 2020 to 2025, we will work together across five pillars – mutual
prosperity, security and stability, sustainable development, climate
change, and people to people – reflecting the key challenges and
opportunities of our time.
The UK and Kenya already benefit from close economic ties and under
the first pillar – mutual prosperity – we will increase their breadth
and strength, boosting growth and improving living standards.
Capitalising on initiatives launched by the UK in January 2020 –
backed by £400 million of UK aid and with the potential to generate
billions of pounds of investment into Africa from the City of London –
our countries will develop new investment and trade opportunities that
will support businesses, including those in the Blue Economy, and
create jobs.
A focus on quality investments and improving environmental, social and
corporate standards will ensure sustainable growth. This, combined
with the delivery of ongoing business reforms, will put us in a strong
position to build on over £1.35 billion of private British investment
into Kenya confirmed at the UK-Africa Investment Summit on 20 January
2020.
Building on the success achieved under the High-Level UK-Kenya
Security Compact, pillar two of the Strategic Partnership will add
fresh impetus to our joint efforts to tackle global terrorism, violent
extremism, organised crime and corruption.
The UK and Kenya will also help reduce local, regional and
international drivers of conflict; improve the cyber resilience of our
societies, economies and democratic institutions; and further enhance
our longstanding defence cooperation.
Pillar three – focussing on sustainable development – sets the shared
goal of reducing extreme poverty and creating a more prosperous, safer
and healthier Kenya, by building stability, tackling inequality and
strengthening government systems and institutions.
Climate change is a defining challenge facing policymakers today.
Pillar four consequently commits the UK and Kenya to demonstrate
global leadership on climate and environmental issues, by deploying
expertise on climate finance, resilience and adaptation, renewable
energy, biodiversity, and science and technology; creating green jobs;
and facilitating peer learning.
The UK and Kenya’s people-to-people links are rich and plentiful.
Under pillar five, we will not only harness, but expand these – across
all sectors – to the betterment of our two countries and partners
around the world.
At both an individual and institutional level, the UK and Kenya will
build productive alliances in skills and education; science and
research; innovation and entrepreneurship; defence and security; and
arts, culture and sports.
Resting on these mutually reinforcing pillars, the UK-Kenya Strategic
Partnership will provide a comprehensive framework for achieving –
together – a set of shared and often interlinked objectives, with
global resonance.

The brazen Shabab assault at Manda Bay, Kenya, a sleepy seaside base
near the Somali border, on Jan. 5 left three Americans dead, raising
complex questions about the military’s mission in Africa.
WASHINGTON — Armed with rifles and explosives, about a dozen Shabab
fighters destroyed an American surveillance plane as it was taking off
and ignited an hourslong gunfight earlier this month on a sprawling
military base in Kenya that houses United States troops. By the time
the Shabab were done, portions of the airfield were burning and three
Americans were dead.
Surprised by the attack, American commandos took around an hour to
respond. Many of the local Kenyan forces, assigned to defend the base,
hid in the grass while other American troops and support staff were
corralled into tents, with little protection, to wait out the battle.
It would require hours to evacuate one of the wounded to a military
hospital in Djibouti, roughly 1,500 miles away.
The brazen assault at Manda Bay, a sleepy seaside base near the Somali
border, on Jan. 5, was largely overshadowed by the crisis with Iran
after the killing of that country’s most important general two days
earlier, and is only now drawing closer scrutiny from Congress and
Pentagon officials.
But the storming of an airfield used by the American military so
alarmed the Pentagon that it immediately sent about 100 troops from
the 101st Airborne Division to establish security at the base.
Army Green Berets from Germany also were shuttled to Djibouti, the
Pentagon’s major hub in Africa, in case the entire base was in danger
of being taken by the Shabab, an East African terrorist group
affiliated with Al Qaeda.
“The assault represented a serious security lapse given how much of a
target the base was and its location near the border with Somalia,”
said Murithi Mutiga, the International Crisis Group’s Horn of Africa
project director, based in Nairobi, Kenya.
Many details of the attack remain murky, and the military’s Africa
Command has released only scant particulars pending an investigation.
But the deaths of the three Americans — one Army soldier and two
Pentagon contractors — marked the largest number of United States
military-related fatalities in Africa since four soldiers were killed
in an ambush in Niger in October 2017.
The Kenya attack underscores the American military’s limits on the
continent, where a lack of intelligence, along with Manda Bay’s
reputation as a quiet and unchallenged locale, allowed a lethal
attack.
The deaths also signify a grim expansion of the campaign waged by the
United States against the Shabab — often confined to Somalia, but in
this case spilling over into Kenya despite an escalating American air
campaign in the region.
Kenya is a new addition to the list of countries where Americans have
been killed in combat since the attacks of Sept. 11, 2001, joining
Afghanistan, Iraq, Jordan, Libya, Niger, Somalia, Syria and Yemen.
The attack is raising new and complex questions about the enduring
American military mission on the continent, where more than 5,000
troops now serve, especially as the Pentagon weighs the potential
withdrawal of hundreds of forces from West Africa to better counter
threats from Russia and China.
A Pentagon proposal to reduce the American military footprint in
Africa drew sharp criticism last week from senior lawmakers of both
parties, including Senator Lindsey Graham, a South Carolina Republican
who is a close adviser to President Trump.
This article is based on interviews with a dozen American military
officials or other people who have been briefed on the attack. Several
spoke on condition of anonymity to discuss aspects of a security
failure that is now under investigation.
Early on the morning of Jan. 5, Dustin Harrison, 47, and Bruce
Triplett, 64, two experienced pilots and contractors with L3
Technologies, a Pentagon contractor that helps conduct surveillance
and reconnaissance missions around the world, were taxiing their
Beechcraft King Air 350 on Manda Bay’s tarmac.
They throttled down their engines, according to one person familiar
with the attack. The two men reported that they saw animals darting
across the runway.
They were wrong. The animals were in fact Shabab fighters, who had
infiltrated the base’s outer perimeter — a poorly defended fence line
— before heading to the base’s airstrip.
As the twin-propeller Beechcraft, loaded with sensors and video
equipment for surveillance, began to taxi, the Shabab fighters fired a
rocket-propelled grenade into the plane, killing Mr. Harrison and Mr.
Triplett.
With the plane on fire, a third contractor, badly burned in the rear
of the aircraft, crawled out to safety.
The Shabab fighters were not done. In the ensuing chaos, they made
quick work of a significant portion of the American fleet of aircraft
— a mix of six surveillance aircraft and medical evacuation
helicopters on the ground at the time.
The Shabab fighters also destroyed a fuel storage area, rendering the
airfield next to useless. The attack most likely cost the Pentagon
millions of dollars in damages.
Specialist Henry Mayfield Jr., 23, of the Army was in a nearby truck
acting as an air traffic controller when he was killed in the
gunfight, according to a person familiar with the incident.
His colleague inside the truck, another American, escaped and hid in
the grass to avoid the insurgents. He was found hours later.
Manda Bay is at the southern edge of an archipelago of American
outposts used in the fight against the Shabab in East Africa.
It took about eight hours to fly the burned contractor to Djibouti for
hospital-level care, according to the person familiar with the attack,
underscoring a recurring vulnerability for American personnel spread
across the continent. Two American service members were also wounded
in the attack.
While parts of the airfield burned and some Americans who were there
returned fire, roughly a dozen members of a Marine Special Operations
team from Third Marine Raider Battalion based at Camp Lejeune, N.C.,
led the American counterattack, alongside several of the Kenyan
Rangers they had been training and accompanying during their
deployment.
But since the team was at Camp Simba, an American enclave roughly a
mile from the airfield, the insurgents had ample time to disperse.
At the center of the hourslong gun battle is the risky dependence of
American forces on their local counterparts, especially when it comes
to base security.
The battle bore striking similarity to an attack in Afghanistan in
March 2019 when Taliban fighters managed to slip onto a sprawling base
in southern Helmand Province with help from Afghan troops, and quickly
threatened a small American Marine base inside the perimeter of the
larger Afghan facility.
At Manda Bay, where American forces have a smaller presence, the
troops rely largely on the Kenyans to protect the airfield.
“Those forces are typically not as capable as U.S. forces, and are
easier for terrorist groups to infiltrate,” said Representative
Michael Waltz, a Florida Republican who served in Africa while an Army
Green Beret.
The performance of the Kenyan security forces during and after the
battle frustrated American officials. At one point, the Kenyans
announced that they had captured six of the attackers, but they all
turned out to be bystanders and were released.
There are about 200 American soldiers, airmen, sailors and Marines, as
well as about 100 Pentagon civilian employees and contractors, in
Kenya helping train and assist local forces.
A large majority of them work at Manda Bay, according to military
officials. But there were not enough Americans to stand perimeter
security on the airfield, one Defense Department official said.
American forces have used Manda Bay for years. Special Operations
units — including Green Berets, Navy SEALs and more recently, Marine
commandos — have helped train and advise Kenyan Rangers there.
The Kenyan Rangers, alongside their American commando counterparts,
often operate in the border region pursuing Shabab fighters.
Surveillance aircraft, flying from the airstrip at Manda Bay, watch
the border between Somalia and Kenya, a region of unforgiving terrain
that has hindered ground operations.
In recent months, the border missions against the Shabab have
dwindled, and military officials have sought to end the American
Special Operations presence at Manda Bay.
Why the base was not better protected is unclear. Surveillance
aircraft, much like those destroyed in the attack, are valuable
assets, especially in Africa, where extremist groups seek to exploit
the vast expanses and porous borders to avoid detection.
Even to shuttle a single aircraft from one part of the continent to
another often requires approval from a four-star general, and losing a
surveillance aircraft, one Defense Department official said, means the
loss of hundreds of hours of reconnaissance flights until it is
replaced.
The Shabab have typically avoided American outposts and the
technological superiority of the American military, instead attacking
more exposed Kenyan and Somali troops in the hinterlands.
But that may be changing. On Sept. 30, a suicide bomber detonated a
car packed with explosives at the gate of a military airfield in Bale
Dogle, Somalia, injuring one American service member.
On Nov. 5, the Shabab released a 52-minute video narrated by the
group’s leader, Abu Ubaidah, in which he called for attacks against
Americans wherever they are, saying the American public is a
legitimate target.
“The recent threats and attacks are likely in part a reaction to the
U.S. air campaign against the group,” said Tricia Bacon, a Somali
specialist at American University in Washington and a former State
Department counterterrorism analyst.
The Pentagon carried out 63 drone strikes in Somalia last year —
almost all against Shabab militants, with a few against a branch of
the Islamic State.
That compares with 47 strikes against the Shabab in 2018. There have
already been three strikes in Somalia this year. The air campaign has
been shrouded in secrecy, and an investigation by Amnesty
International last year reported on evidence that these airstrikes had
killed or wounded more than two dozen civilians since 2017.
Since March 2017, the Shabab have launched close to 900 attacks on
civilians and hundreds more against United States, Somali and Kenyan
troops, the Soufan Center, a research organization for global security
issues in New York, said in an analysis last week.
An Army Special Forces soldier, Staff Sgt. Alex Conrad, died from
wounds he received during a firefight with Shabab fighters in June
2018 in Somalia.
The attack in Kenya came about a week after an explosives-laden truck
blew up at a busy intersection in Mogadishu, the Somali capital,
killing 82 people. The Shabab also claimed responsibility for that
attack.
The group’s strength has ebbed and flowed over the past 15 years,
weathering a string of territorial losses, defections and the killing
of several high-profile leaders.
Even so, the Shabab has proved remarkably resilient, even in the face
of an intensified campaign of United States airstrikes against its
fighters and facilities, the Soufan analysis said.
It remains unclear how the Shabab fighters made their way onto the
Manda Bay base, whether by surprise or a vehicle packed with
explosives.
According to one American official, the group likely had patiently
watched the base and had selected their attack based on the Americans’
well-established patterns.
Investigators are looking at the possibility the attackers had help
from Kenyan staff on the base, said one person briefed on the inquiry.
American officials said five Shabab fighters were killed. Several
others fled, most likely slipping back across the border into Somalia,
the officials said.
“This was designed for propaganda, to show they could strike American
bases,” said Matt Bryden, the director of Sahan Research, a
Nairobi-based think tank. “Their capability to strike in East Africa
is growing.”

Lets finish up in Kenya where we are currently under a Plague of
Locusts and Al Shabaab attack. Margot Kiser wrote in the Daily Beast
The Manda Bay attack is the first al-Shabab has carried out on a
U.S.military installation inside Kenya Among the aircraft destroyed at
the Manda Bay base were manned surveillance planes that collect data
across the border in Somalia, as well as over Kenya’s dense Boni
forest,
Also reportedly destroyed were aircraft operated by U.S. Special
Operations Command and modified Havilland Canada Dash-8 spy aircraft,
which carries the U.S. civil registration code N8200L.
This is a mind bending Jedi Level intrusion and asymmetric warfare
coup de grace.
The U.S. Africa Command has sent its crack East Africa Response Force
to secure the airfield and augment security. This is in fact a big
deal.

Kenya should consider partnerships with the private sector to help
fund government spending because it doesn’t have much room to increase
debt, according to the nation’s central bank governor.
The East African economy’s debt is at about 62% of gross domestic
product, Governor Patrick Njoroge said Wednesday in an interview with
Bloomberg TV at the World Economic Forum in Davos.
While the increase in credit in recent years was mainly to finance
significant infrastructure spending, “we don’t have much headroom for
additional debt financing,” he said.
President Uhuru Kenyatta’s administration plans to boost its revenue
and narrow the budget gap in the 12 months starting July to 4.9% of
GDP from an estimated 6.3% this fiscal year.
That’s amid pressure to boost funding for manufacturing, housing,
farming and health care projects and after the International Monetary
Managing Director Kristalina Georgieva cautioned the government
against a plan to ramp up debt.
“The issue for us is how to energize the economy so we can increase
the economy’s repayment capacity, both in terms of government revenues
or foreign-exchange earnings, if indeed the payments are external,” he
said.
The efficiency of the projects to deliver returns is critical, he said.
Kenya is revising spending plans and improving tax administration to
increase collections, with a view of almost halving the budget gap in
four years. A smaller budget deficit should be welcomed, Njoroge said.
The monetary policy committee cut its key rate for the first time in
16 months in November and will assess the impact this has had on the
economy when deciding if there’s room for more easing, Njoroge said.
Before that cut the MPC repeatedly said a cap on borrowing costs,
which limited what lenders would charge on loans to 4 percentage
points above the central bank rate, hampered the transmission of
policy decisions to the economy.
The panel is scheduled to announce its next rates decision on Jan. 27.