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Satchu's Rich Wrap-Up
Monday 16th of March 2020

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Macro Thoughts

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Global Central Bank Update...@charliebilello

-Fed cuts rates 100 bps back to all-time low of 0-0.25%.
-New Zealand cuts rates 75 bps to 0.25%.
-Canada cuts rates another 50 bps to 0.75%.
-Norway cuts rates 50 bps to 1.00%.
Many more cuts to come.

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The scale of China's slowdown revealed by the latest numbers, for both industry and consumers, is breathtaking @johnauthers

Now we need to know how quickly it can recover, and whether it can get
so bad in Europe and the Americas. This uncertainty will last a looong

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Over 12 000 new cases of COVID-19 were reported today in the world Exponential growth is observed in 14 of the 15 countries Cases are multiplying by 10 every 14 days, and show no sign of slowing down. @zorinaq
Law & Politics

Over 12 000 new cases of COVID-19 were reported today in the world
Exponential growth is observed in 14 of the 15 countries with the most
cumulative cases (exception: South Korea) Cases are multiplying by 10
every 14 days, and show no sign of slowing down.

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Listen to every word. Professor John Ashton is a British doctor & academic. He worked at London School of Hygiene & Tropical Medicine, Uni of Liverpool School of Medicine. @Channel4News @OxfordDiplomat
Law & Politics

Listen to every word. Professor John Ashton is a British doctor &
academic. He worked at London School of Hygiene & Tropical Medicine,
Uni of Liverpool School of Medicine. He was Regional Director of
Public Health for Cumbria for 13 years.  @Channel4News

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At least five Brazilians who traveled with @jairbolsonaro on a US visit including meetings with his counterpart @realDonaldTrump have tested positive for COVID-19, officials and media reports @AFP
Law & Politics

The far-right leader's four-day trip to south Florida, which included
a swanky dinner last Saturday at a Trump golf resort, had a surprise
outcome: it appears to have become an infection cluster in the
coronavirus pandemic.
At least six people involved -- the five Brazilians, plus Miami Mayor
Francis Suarez -- have now tested positive for COVID-19.
That has led Trump and Bolsonaro, who had both been criticized for
downplaying the gravity of the outbreak, to get tested themselves.
Other top officials have meanwhile gone into self-quarantine.
After the Brazilian government revealed Thursday that Bolsonaro's
communications chief, Fabio Wajngarten, had been infected, a string of
others on the trip tested positive.
Bolsonaro's lawyer, Karina Kufa, and Senator Nelsinho Trad announced
their positive test results on Twitter.
The Brazilian embassy in Washington tweeted that Bolsonaro's appointee
for ambassador to the US, Nestor Forster, was infected as well.
A businessman who was on the trip has also tested positive, asking
that his identity not be revealed, newspaper Folha de Sao Paulo

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16-FEB-2020 :: #COVID19 #coronavirus #2019nCoV
Law & Politics

Let me tell you, world,
If a thousand challengers lie beneath your feet,
Count me as number thousand and one.

I don't believe the sky is blue;
I don't believe in thunder's echoes;
I don't believe that dreams are false;
I don't believe that death has no revenge.

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The @realDonaldTrump Presidency Is Over @TheAtlantic @Peter_Wehner
Law & Politics

What I explained then, and what I have said many times since, is that
Trump is fundamentally unfit—intellectually, morally, temperamentally,
and psychologically—for office.
For me, that is the paramount consideration in electing a president,
in part because at some point it’s reasonable to expect that a
president will face an unexpected crisis—and at that point, the
president’s judgment and discernment, his character and leadership
ability, will really matter.
“Mr. Trump has no desire to acquaint himself with most issues, let
alone master them” is how I put it four years ago.
“No major presidential candidate has ever been quite as disdainful of
knowledge, as indifferent to facts, as untroubled by his
benightedness.” I added this:
Mr. Trump’s virulent combination of ignorance, emotional instability,
demagogy, solipsism and vindictiveness would do more than result in a
failed presidency; it could very well lead to national catastrophe.
The prospect of Donald Trump as commander in chief should send a chill
down the spine of every American.
It took until the second half of Trump’s first term, but the crisis
has arrived in the form of the coronavirus pandemic, and it’s hard to
name a president who has been as overwhelmed by a crisis as the
coronavirus has overwhelmed Donald Trump.
To be sure, the president isn’t responsible for either the coronavirus
or the disease it causes, COVID-19, and he couldn’t have stopped it
from hitting our shores even if he had done everything right.
Nor is it the case that the president hasn’t done anything right; in
fact, his decision to implement a travel ban on China was prudent.
And any narrative that attempts to pin all of the blame on Trump for
the coronavirus is simply unfair.
The temptation among the president’s critics to use the pandemic to
get back at Trump for every bad thing he’s done should be resisted,
and schadenfreude is never a good look.
That said, the president and his administration are responsible for
grave, costly errors, most especially the epic manufacturing failures
in diagnostic testing, the decision to test too few people, the delay
in expanding testing to labs outside the Centers for Disease Control
and Prevention, and problems in the supply chain.
These mistakes have left us blind and badly behind the curve, and, for
a few crucial weeks, they created a false sense of security.
What we now know is that the coronavirus silently spread for several
weeks, without us being aware of it and while we were doing nothing to
stop it.
Containment and mitigation efforts could have significantly slowed its
spread at an early, critical point, but we frittered away that
“They’ve simply lost time they can’t make up. You can’t get back six
weeks of blindness,” Jeremy Konyndyk, who helped oversee the
international response to Ebola during the Obama administration and is
a senior policy fellow at the Center for Global Development, told The
Washington Post.
“To the extent that there’s someone to blame here, the blame is on
poor, chaotic management from the White House and failure to
acknowledge the big picture.”
Earlier this week, Anthony Fauci, the widely respected director of the
National Institute of Allergy and Infectious Diseases whose reputation
for honesty and integrity have been only enhanced during this crisis,
admitted in congressional testimony that the United States is still
not providing adequate testing for the coronavirus.
“It is failing. Let’s admit it.” He added, “The idea of anybody
getting [testing] easily, the way people in other countries are doing
it, we’re not set up for that. I think it should be, but we’re not."
We also know the World Health Organization had working tests that the
United States refused, and researchers at a project in Seattle tried
to conduct early tests for the coronavirus but were prevented from
doing so by federal officials.
(Doctors at the research project eventually decided to perform
coronavirus tests without federal approval.)
But that’s not all. The president reportedly ignored early warnings of
the severity of the virus and grew angry at a CDC official who in
February warned that an outbreak was inevitable.
The Trump administration dismantled the National Security Council’s
global-health office, whose purpose was to address global pandemics;
we’re now paying the price for that.
“We worked very well with that office,” Fauci told Congress. “It would
be nice if the office was still there.”
We may face a shortage of ventilators and medical supplies, and
hospitals may soon be overwhelmed, certainly if the number of
coronavirus cases increases at a rate anything like that in countries
such as Italy.
(This would cause not only needless coronavirus-related deaths, but
deaths from those suffering from other ailments who won’t have ready
access to hospital care.)
Some of these mistakes are less serious and more understandable than
others. One has to take into account that in government, when people
are forced to make important decisions based on incomplete information
in a compressed period of time, things go wrong.
Yet in some respects, the avalanche of false information from the
president has been most alarming of all. It’s been one rock slide
after another, the likes of which we have never seen.
Day after day after day he brazenly denied reality, in an effort to
blunt the economic and political harm he faced.
But Trump is in the process of discovering that he can’t spin or tweet
his way out of a pandemic.
There is no one who can do to the coronavirus what Attorney General
William Barr did to the Mueller report: lie about it and get away with
The president’s misinformation and mendacity about the coronavirus are
head-snapping. He claimed that it was contained in America when it was
actually spreading.
He claimed that we had “shut it down” when we had not.
He claimed that testing was available when it wasn’t.
He claimed that the coronavirus will one day disappear “like a
miracle”; it won’t.
He claimed that a vaccine would be available in months; Fauci says it
will not be available for a year or more.
Trump falsely blamed the Obama administration for impeding coronavirus
testing. He stated that the coronavirus first hit the United States
later than it actually did.
(He said that it was three weeks prior to the point at which he spoke;
the actual figure was twice that.)
The president claimed that the number of cases in Italy was getting
“much better” when it was getting much worse.
And in one of the more stunning statements an American president has
ever made, Trump admitted that his preference was to keep a cruise
ship off the California coast rather than allowing it to dock, because
he wanted to keep the number of reported cases of the coronavirus
artificially low.
“I like the numbers,” Trump said. “I would rather have the numbers
stay where they are. But if they want to take them off, they’ll take
them off. But if that happens, all of a sudden your 240 [cases] is
obviously going to be a much higher number, and probably the 11
[deaths] will be a higher number too.”
(Cooler heads prevailed, and over the president’s objections, the
Grand Princess was allowed to dock at the Port of Oakland.)
On and on it goes.
To make matters worse, the president delivered an Oval Office address
that was meant to reassure the nation and the markets but instead
shook both.
The president’s delivery was awkward and stilted; worse, at several
points, the president, who decided to ad-lib the teleprompter speech,
misstated his administration’s own policies, which the administration
had to correct.
Stock futures plunged even as the president was still delivering his
speech. In his address, the president called for Americans to “unify
together as one nation and one family,” despite having referred to
Washington Governor Jay Inslee as a “snake” days before the speech and
attacking Democrats the morning after it.
As The Washington Post’s Dan Balz put it, “Almost everything that
could have gone wrong with the speech did go wrong.”
Taken together, this is a massive failure in leadership that stems
from a massive defect in character.
Trump is such a habitual liar that he is incapable of being honest,
even when being honest would serve his interests.
He is so impulsive, shortsighted, and undisciplined that he is unable
to plan or even think beyond the moment.
He is such a divisive and polarizing figure that he long ago lost the
ability to unite the nation under any circumstances and for any cause.
And he is so narcissistic and unreflective that he is completely
incapable of learning from his mistakes.
The president’s disordered personality makes him as ill-equipped to
deal with a crisis as any president has ever been.
With few exceptions, what Trump has said is not just useless; it is
downright injurious.
The nation is recognizing this, treating him as a bystander “as school
superintendents, sports commissioners, college presidents, governors
and business owners across the country take it upon themselves to shut
down much of American life without clear guidance from the president,”
in the words of Peter Baker and Maggie Haberman of The New York Times.
Donald Trump is shrinking before our eyes.
The coronavirus is quite likely to be the Trump presidency’s
inflection point, when everything changed, when the bluster and
ignorance and shallowness of America’s 45th president became
undeniable, an empirical reality, as indisputable as the laws of
science or a mathematical equation.
It has taken a good deal longer than it should have, but Americans
have now seen the con man behind the curtain.
The president, enraged for having been unmasked, will become more
desperate, more embittered, more unhinged.
He knows nothing will be the same. His administration may stagger on,
but it will be only a hollow shell. The Trump presidency is over.

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Coronavirus: Why You Must Act Now @tomaspueyo
Law & Politics

The coronavirus is coming to you.
It’s coming at an exponential speed: gradually, and then suddenly.
It’s a matter of days. Maybe a week or two.
When it does, your healthcare system will be overwhelmed.
Your fellow citizens will be treated in the hallways.
Exhausted healthcare workers will break down. Some will die.
They will have to decide which patient gets the oxygen and which one dies.
The only way to prevent this is social distancing today. Not tomorrow. Today.
That means keeping as many people home as possible, starting now.

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Total Worldwide cases outside China through March 10th
Law & Politics

As of today, this is mostly due to Italy, Iran and South Korea:

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Chart 4 Coronavirus through March 10th by Country
Law & Politics

There are dozens of countries with exponential growth rates. As of
today, most of them are Western.

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Chart 7 Timeline of Events in Hubei
Law & Politics

This is one of the most important charts.
It shows in orange bars the daily official number of cases in the
Hubei province: How many people were diagnosed that day.
The grey bars show the true daily coronavirus cases. The Chinese CDC
found these by asking patients during the diagnostic when their
symptoms started.
Crucially, these true cases weren’t known at the time. We can only
figure them out looking backwards: The authorities don’t know that
somebody just started having symptoms. They know when somebody goes to
the doctor and gets diagnosed.
What this means is that the orange bars show you what authorities
knew, and the grey ones what was really happening.
On January 21st, the number of new diagnosed cases (orange) is
exploding: there are around 100 new cases. In reality, there were
1,500 new cases that day, growing exponentially. But the authorities
didn’t know that. What they knew was that suddenly there were 100 new
cases of this new illness.
Two days later, authorities shut down Wuhan. At that point, the number
of diagnosed daily new cases was ~400. Note that number: they made a
decision to close the city with just 400 new cases in a day. In
reality, there were 2,500 new cases that day, but they didn’t know
The day after, another 15 cities in Hubei shut down.
Up until Jan 23rd, when Wuhan closes, you can look at the grey graph:
it’s growing exponentially. True cases were exploding. As soon as
Wuhan shuts down, cases slow down. On Jan 24th, when another 15 cities
shut down, the number of true cases (again, grey) grinds to a halt.
Two days later, the maximum number of true cases was reached, and it
has gone down ever since.
Note that the orange (official) cases were still growing
exponentially: For 12 more days, it looked like this thing was still
exploding. But it wasn’t. It’s just that the cases were getting
stronger symptoms and going to the doctor more, and the system to
identify them was stronger.
This concept of official and true cases is important. Let’s keep it in
mind for later.
The rest of regions in China were well coordinated by the central
government, so they took immediate and drastic measures. This is the
All of them were hit by SARS in 2003, and all of them learned from it.
They learned how viral and lethal it could be, so they knew to take it
seriously. That’s why all of their graphs, despite starting to grow
much earlier, still don’t look like exponentials.
So far, we have stories of coronavirus exploding, governments
realizing the threat, and containing them. For the rest of the
countries, however, it’s a completely different story.
Before I jump to them, a note about South Korea: The country is
probably an outlier. The coronavirus was contained for the first 30
cases. Patient 31 was a super-spreader who passed it to thousands of
other people. Because the virus spreads before people show symptoms,
by the time the authorities realized the issue, the virus was out
there. They’re now paying the consequences of that one instance. Their
containment efforts show, however: Italy has already passed it in
numbers of cases, and Iran will pass it tomorrow (3/10/2020).
Washington State
You’ve already seen the growth in Western countries, and how bad
forecasts of just one week look like. Now imagine that containment
doesn’t happen like in Wuhan or in other Eastern countries, and you
get a colossal epidemic.
Let’s look at a few cases, such as Washington State, the San Francisco
Bay Area, Paris and Madrid.

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Chart 10 Washington State
Law & Politics

Washington State is the US’s Wuhan.The number of cases there is
growing exponentially. It’s currently at 140.
But something interesting happened early on. The death rate was
through the roof. At some point, the state had 3 cases and one death.
We know from other places that the death rate of the coronavirus is
anything between 0.5% and 5% (more on that later). How could the death
rate be 33%?
It turned out that the virus had been spreading undetected for weeks.
It’s not like there were only 3 cases. It’s that authorities only knew
about 3, and one of them was dead because the more serious the
condition, the more likely somebody is to be tested.
This is a bit like the orange and grey bars in China: Here they only
knew about the orange bars (official cases) and they looked good: just
3. But in reality, there were hundreds, maybe thousands of true cases.
This is an issue: You only know the official cases, not the true ones.
But you need to know the true ones. How can you estimate the true
ones? It turns out, there’s a couple of ways. And I have a model for
both, so you can play with the numbers too (direct link to copy of the
First, through deaths. If you have deaths in your region, you can use
that to guess the number of true current cases. We know approximately
how long it takes for that person to go from catching the virus to
dying on average (17.3 days). That means the person who died on 2/29
in Washington State probably got infected around 2/12.
Then, you know the mortality rate. For this scenario, I’m using 1%
(we’ll discuss later the details). That means that, around 2/12, there
were already around ~100 cases in the area (of which only one ended up
in death 17.3 days later).
Now, use the average doubling time for the coronavirus (time it takes
to double cases, on average). It’s 6.2. That means that, in the 17
days it took this person to die, the cases had to multiply by ~8
(=2^(17/6)). That means that, if you are not diagnosing all cases, one
death today means 800 true cases today.
Washington state has today 22 deaths. With that quick calculation, you
get ~16,000 true coronavirus cases today. As many as the official
cases in Italy and Iran combined.
If we look into the detail, we realize that 19 of these deaths were
from one cluster, which might not have spread the virus widely. So if
we consider those 19 deaths as one, the total deaths in the state is
four. Updating the model with that number, we still get ~3,000 cases
This approach from Trevor Bedford looks at the viruses themselves and
their mutations to assess the current case count.
The conclusion is that there are likely ~1,100 cases in Washington
state right now.
None of these approaches are perfect, but they all point to the same
message: We don’t know the number of true cases, but it’s much higher
than the official one. It’s not in the hundreds. It’s in the
thousands, maybe more.

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Tests per million
Law & Politics

they were testing everybody who had traveled or was in contact with a
traveler, which means that they knew most of the travel-related cases,
but none of the community spread cases. By having a sense of community
spread vs. travel spread, you can know how many true cases there are.

I looked at that ratio for South Korea, which has great data. By the
time they had 86 cases, the % of them from community spread was 86%
(86 and 86% are a coincidence).
With that number, you can calculate the number of true cases. If the
Bay Area has 86 cases today, it is likely that the true number is

France claims 1,400 cases today and 30 deaths. Using the two methods
above, you can have a range of cases: between 24,000 and 140,000.
The true number of coronavirus cases in France today is likely to be
between 24,000 and 140,000.
Let me repeat that: the number of true cases in France is likely to be
between one and two orders or magnitude higher than it is officially
If you stack up the orange bars until 1/22, you get 444 cases. Now add
up all the grey bars. They add up to ~12,000 cases. So when Wuhan
thought it had 444 cases, it had 27 times more. If France thinks it
has 1,400 cases, it might well have tens of thousands
The same math applies to Paris. With ~30 cases inside the city, the
true number of cases is likely to be in the hundreds, maybe thousands.
With 300 cases in the Ile-de-France region, the total cases in the
region might already exceed tens of thousands.
Spain has very similar numbers as France (1,200 cases vs. 1,400, and
both have 30 deaths). That means the same rules are valid: Spain has
probably upwards of 20k true cases already.
In the Comunidad de Madrid region, with 600 official cases and 17
deaths, the true number of cases is likely between 10,000 and 60,000.
If you read these data and tell yourself: “Impossible, this can’t be
true”, just think this: With this number of cases, Wuhan was already
in lockdown.
With the number of cases we see today in countries like the US, Spain,
France, Iran, Germany, Japan, Netherlands, Denmark, Sweden or
Switzerland, Wuhan was already in lockdown.

The World Health Organization (WHO) quotes 3.4% as the fatality rate
(% people who contract the coronavirus and then die). This number is
out of context so let me explain it.

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Chart 12 Fatality Rate
Law & Politics

This is what you can conclude:
Excluding these, countries that are prepared will see a fatality rate
of ~0.5% (South Korea) to 0.9% (rest of China).
Countries that are overwhelmed will have a fatality rate between ~3%-5%
Put in another way: Countries that act fast can reduce the number of
deaths by a factor of ten. And that’s just counting the fatality rate.
Acting fast also drastically reduces the cases, making this even more
of a no-brainer.
Around 20% of cases require hospitalization, 5% of cases require the
Intensive Care Unit (ICU), and around 2.5% require very intensive
help, with items such as ventilators or ECMO (extra-corporeal
The problem is that items such as ventilators and ECMO can’t be
produced or bought easily. A few years ago, the US had a total of 250
ECMO machines, for example.
So if you suddenly have 100,000 people infected, many of them will
want to go get tested. Around 20,000 will require hospitalization,
5,000 will need the ICU, and 1,000 will need machines that we don’t
have enough of today. And that’s just with 100,000 cases.
That is without taking into account issues such as masks. A country
like the US has only 1% of the masks it needs to cover the needs of
its healthcare workers (12M N95, 30M surgical vs. 3.5B needed). If a
lot of cases appear at once, there will be masks for only 2 weeks.
Countries like Japan, South Korea, Hong Kong or Singapore, as well as
Chinese regions outside of Hubei, have been prepared and given the
care that patients need.

“After a few days, we have to choose. […] Not everyone can be
intubated. We decide based on age and state of health.” —Christian
Salaroli, Italian MD.

The worst infection then becomes through surfaces: The virus survives
for up to 9 days on different surfaces such as metal, ceramics and
plastics. That means things like doorknobs, tables, or elevator
buttons can be terrible infection vectors.
The only way to truly reduce that is with social distancing: Keeping
people home as much as possible, for as long as possible until this
This has already been proven in the past. Namely, in the 1918 flu pandemic.
This is not what Western countries have done. And now it’s too late.
The recent US announcement that most travel from Europe was banned is
a containment measure for a country that has, as of today, 3 times the
cases that Hubei had when it shut down, growing exponentially. How can
we know if it’s enough?

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Schools: Kids generally won't get very ill, so the govt can use them as a tool to infect others when you want to increase infection @iandonald_psych
Law & Politics

When you need to slow infection, that tap can be turned off – at that
point they close the schools. Politically risky for them to say this.

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.1123
Dollar Index 98.178
Japan Yen 106.44
Swiss Franc 0.9493
Pound 1.2341
Aussie 0.6166
India Rupee 74.0225
South Korea Won 1221.96
Brazil Real 4.8612
Egypt Pound 15.6735
South Africa Rand 16.3777

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In the five days through Friday, MSCI Inc.'s index of developing-nation stocks crashed 12%, the most since the 2008 global financial crisis.
Emerging Markets

The Mexican and Colombian pesos each depreciated more than 8% against
the dollar to record lows, battered by Brent oil’s slide below $35 a

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Debt, virus and locusts create a perfect storm for Africa @TheAfricaReport

The year began with promise for sub-Saharan Africa.
All the major institutions tracking African growth said so:
The African Development Bank pronounced in its Economic Outlook that
Africa’s economic outlook continues to brighten. Its real GDP growth,
estimated at 3.4% for 2019, is projected to accelerate to 3.9% in 2020
and to 4.1% in 2021.
The IMF said in its World Economic Outlook sub-Saharan Africa growth
is expected to strengthen to 3.5% in 2020–21 (from 3.3% in 2019).
The World Bank predicted ”Regional growth is expected to pick up to
2.9% in 2020”
Interestingly the World Bank added a caveat which was prescient:
A sharper-than-expected deceleration in major trading partners such as
China, the Euro Area, or the United States, would substantially lower
export revenues and investment.
A faster-than-expected slowdown in China would cause a sharp fall in
commodity prices and, given Sub-Saharan Africa’s heavy reliance on
extractive sectors for export and fiscal revenues, weigh heavily on
regional activity.
Those forecasts are now defunct and it’s only March.
The Coronavirus has to date barely made landfall on the African
continent with only 5 countries reporting infections but a Virus is in
its essence non-linear, exponential and multiplicative and it would be
a Shakespeare-level moment of hubris if policy makers were to pat
themselves on the back.
Diagnostic kits were only recently availed and if South Korea had
tested the same number of People as the entire African Continent, they
too would be reporting single digit cases.
We all know now ”what exponential disease propagation looks like in
the real world. Real world exponential growth looks like nothing,
nothing, nothing … then cluster, cluster, cluster … then BOOM!” and
therefore we will know soon whether we really have dodged the
#Coronavirus Infection Bullet.
The issue at hand now is around the violence of the blowback from the
China #Coronavirus feedback loop phenomenon.
The virus is not correlated to endogenous market dynamics but is an an
exogenous uncertainty that remains unresolved and therefore, it is a
”Black Swan”.
Fantasy predictions of a V shaped recovery in China have been dashed.
In fact China cannot just crank up the ‘Factory’ because that will
risk a second round effect of infections.
Therefore, I expect negative GDP Growth through H1 2020 in China as my
base case.
Standard Bank’s Chief Economist has calculated that a one percentage
point decrease in China’s domestic investment growth is associated
with an average 0.6 percentage point decrease in Africa’s exports.
Those countries heavily dependent on China being the main taker of
their commodities are at the bleeding edge of this now negative
feedback loop phenomenon. Commodity prices [Crude Oil, Copper, Coal]
have crashed more than 20% since the start of the year.
You don’t have to be a rocket scientist or an Economist to calculate
which countries in are directly in the line of fire. Angola, Congo
Brazzavile, DRC, Equatorial Guinea, Zambia, Nigeria and South Africa
spring immediately to mind.
Notwithstanding comments by the always upbeat and bright-eyed
President Adesina of the African Development Bank that Africa is not
facing a debt crisis.
He told Bloomberg, “Debt is not a problem, it’s very bad debt that’s a
The point is this.
SSA Countries with no exception that I can think off have gorged on
borrowing and balance sheets are maxed out.
Africa’s sovereign issuance in the Eurobond markets totaled $53bn in
2018 and 2019 and total outstanding debt topped $100bn last year.
Debt burdens have increased and affordability has weakened across most
of Sub-Saharan Africa, while a shift in debt structures has left some
countries more exposed to a financial shock, said Moodys in November
last year.
Very few of the investments made are within spitting distance of
providing an ROI [Return on Investment].
Rising debt service ratios are best exemplified by Nigeria where the
Government is spending more than half of its revenue servicing its
More than 50% of SSA GDP is produced by South Africa, Nigeria and Angola.
South Africa reported that GDP in Q4 2019 shrank by a massive 1.4%.
Annual growth at 0.2% is the lowest yearly growth since 2009 and the
tape is back at GFC times.
The rand which has been in free fall has a lot further to fall in 2020.
And this is before the viral infection.
Nigeria’s oil revenue is cratering and there is $16bn of ”hot money”
parked in short term certificates which is all headed for the Exit as
we speak. A Currency Devaluation is now predicted and predictable.
South Africa, Nigeria and Angola are poised to dive into deep recession.
East Africa which was a bright spot is facing down a locust invasion
which according to the FAO could turn 500x by June.
It is practically biblical.
“If I shut up heaven that there be no rain, or if I command the
locusts to devour the land, or if I send pestilence among my people;”
– 2 Chronicles 7:13-14
This is a perfect storm. Buckle up, and let’s stop popping the Quaaludes.

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Next Africa: Hello, Oil and Virus Shocks. Goodbye, Economic Growth @business

Any hope sub-Saharan Africa had of strong economic growth in 2020 is gone.
Saudi Arabia and Russia’s oil-price war and the impact from
coronavirus has halved the price of crude, and hurt prospects for the
region's energy exporters.
The pandemic is affecting everything from tourism to the ability of
African countries to sell Eurobonds.
The International Monetary Fund, who forecast the region’s 2020 growth
at 3.5% in January, already has slashed its prediction for Nigeria,
which accounts for a quarter of its GDP.
While importing countries will benefit from lower costs, Dirk Willem
te Velde of the London-based Overseas Development Institute estimates
the continent will lose about $30 billion in net exports this year
should oil prices stay at current levels.
That could reduce foreign investment and make it more difficult to
service debt in a region that’s amassed borrowing like never before.
Of the 54 countries in Africa, 20 are near or at distressed debt
levels, according to the IMF.
Nigeria and Angola, the two biggest oil producers, have assumed prices
of $57 and $55 a barrel in their budgets respectively. Brent crude is
currently around $33.
For Nigeria, which depends on oil for 60% of fiscal revenue and 90% of
foreign exchange, that's a disaster. Angola is even more reliant on
the fuel.
The two countries are already struggling to sell their oil. Mele
Kyari, chief executive officer of state-owned Nigerian National
Petroleum, said this week 50 Nigerian oil cargoes have been stranded
as traders can’t find buyers.
What an oil crisis makes evident is that politicians' talk on the need
to diversify their economies don't result in much. The continent's
fortunes rise and fall with the whims of bigger producers.
Boeing's Crash | Ethiopia blamed Boeing for the crash that killed 157
people a year ago this week, specifically the aircraft maker's new Max
jet. Investigators found the design of the plane's MCAS safety feature
was central to why it plummeted into a field near Addis Ababa shortly
after takeoff. The 136-page interim report also found the U.S. company
failed to adequately train pilots on the new features.
Corona Spreads | The coronavirus took its time to get to sub-Saharan
Africa, but the numbers are steadily picking up. All the cases have
been linked to travelers. Fears are growing that struggling
health-care systems will battle to contain a spread of the disease
that seems inevitable. And souring sentiment may spur an exodus of
Militant Attacks | Mozambique suffered the biggest surge in attacks by
Islamist militants in the world in 2019. The violence is centered
around the region that houses the continent's largest investments in
The natural gas projects by companies including Total and Exxon Mobil
are well guarded and haven't been affected. But violence is spreading
in Cabo Delgado, the nation's northern province.
Sasol Slump | Petrochemical giant Sasol was for decades a heavyweight
of corporate South Africa — one of the biggest companies by sales and
an advocate of overseas expansion.
Oil's plunge has piled pressure on the company, already reeling from a
costly chemicals venture in the U.S. The decline has increased concern
on how it will repay about $7.5 billion of debt.
Sasol tried to assure investors it will remain within bond covenants
and has plans to raise capital. Shares are still down about 70% this
Front Line | Agadez, a sprawling cluster of low, sand-colored
compounds in the desert of northern Niger, has emerged as a front line
post of both Europe’s anti-migration efforts and the fight by U.S.,
French and African forces against the spread of Islamist militancy.
The expanded U.S. profile in the region was highlighted in 2017 when
four American soldiers died in an ambush in Niger.
South African stocks tumbled almost 10% on Thursday, the most since 1997.
Yields on Zambian Eurobonds due in 2022 surged 2,175 basis points to a
record 46.5%. Pressure on Nigeria's naira has prompted talk of a

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U.S. Tells Ethiopia of Marine Who Had Positive Coronavirus Test @bpolitics

The U.S. ambassador to Ethiopia told the government that an American
Marine visiting the country in February showed symptoms of the
coronavirus while there and later tested positive, after staying at a
hotel at the same time as Secretary of State Michael Pompeo, people
familiar with the matter said.
In a meeting with Ethiopia’s health minister this week, Ambassador
Michael Raynor said the Marine, whose identity hasn’t been released,
stayed at the Sheraton Hotel in Addis Ababa for the African Land
Forces summit that took place on Feb. 18-21.
He showed symptoms while there, the people said. He later tested
positive for the virus and is now getting treatment in the U.S.
The hotel is where Pompeo, his staff and traveling reporters stayed
for two nights -- February 17 and 18 -- and held a news conference
with Ethiopia’s foreign minister.
The visit to Addis Ababa was part of a three-country trip to Africa by Pompeo.
A State Department representative said that Pompeo had consulted with
a department doctor and was in good health.
The representative added that he would follow medical advice,
including testing if that became necessary.
He is now well beyond the virus’s usual two-week incubation period and
he has continued to attend events and meet foreign counterparts.
The spokesman confirmed that Raynor had raised the case in discussions
with the Ethiopian government, and said the U.S. continues to
collaborate with health authorities to combat the spread of the
On Friday, Ethiopian Health Minister Lia Tadesse said the country had
recorded its first coronavirus case -- a 48-year-old Japanese man who
had flown to the country from Burkina Faso.
She said the country was still investigating the case of the American
Marine, who she said was in the country Feb. 17-21.
“We don’t know if he came here with the illness, or if he got it here
or after he left,” Tadesse said. “There are several scenarios.”
Tadesse said participants from 45 countries were involved in this
year’s African Land Forces summit, and no symptoms were observed among

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by Aly Khan Satchu (www.rich.co.ke)
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March 2020

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