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Satchu's Rich Wrap-Up
Tuesday 06th of October 2020

#Gold Investors buy the dip as global ETF holdings hit record. worldwide total expanded in Aug and Sep even as prices backtracked, and it hit a fresh record on Monday, acc to data compiled by Bloomberg @Schuldensuehner

#Gold Investors buy the dip as global ETF holdings hit record. The worldwide total expanded in Aug and Sep even as prices backtracked, and it hit a fresh record on Monday, acc to data compiled by Bloomberg, highlighting that Gold rally has more to run.

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Drinking the Kool-Aid
World Of Finance

“Everybody, everybody everywhere, has his own movie going, his own scenario, and everybody is acting his movie out like mad, only most people don’t know that is what they’re trapped by, their little script.” ― Tom Wolfe, The Electric Kool-Aid Acid Test

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President Trump very dyspneic walking ~60 paces (stop 2x) and up ~30 steps. ? was O2 sats w/ walking White heavy check markbefore he left WRAMC? His “energy” not real, probably side effect of steroids. @TalmadgeKing
Law & Politics

President Trump very dyspneic walking ~60 paces (stop 2x) and up ~30 steps. ? was O2 sats w/ walking White heavy check markbefore he left WRAMC? His “energy” not real, probably side effect of steroids. Vitals Q2h. Check O2 sats. Give O2 during sleep. Lots of other concerns.

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2,074,653 people were confirmed with coronavirus in the past week, and 39,280 died of the disease. @RencapMan

The world is focused on just one of those confirmed cases, and that's the type of focused attention he appreciates

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Paris bars to close for 2 weeks as city moves to maximum Covid alert @alfonslopeztena

Paris bars to close for 2 weeks as city moves to maximum Covid alert: the incidence rate exceeds 100 infections per 100,000 among elderly inhabitants, 250 per 100,000 among the general public, at least 30% of ICU beds are reserved for coronavirus patients

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Next year should spell new leader for the Tories @thetimes @ClareFoges
Law & Politics

Every prime minister runs out of steam at some point — and for beleaguered Boris Johnson that moment is nearly here

‘In my beginning is my end . . .” Ten months on from its victory the government already has the fag-end feel of one that has been going for ten years. The people have stopped listening to its pronouncements, the prime minister looks exhausted, the backbenchers are rebellious, the civil servants leaky, the ideas either flat (“levelling up”) or far out (building a floating wall in the Channel). It can seem we have reached something approaching the nadir of John Major’s government when, as Norman Lamont put it, they appeared to be “in office but not in power”.

Major’s government was so patently past it that Tony Blair’s attacks on his opponent seemed as wantonly savage as a lion tearing apart a wounded gazelle: “This prime minister, so weak, so utterly incapable of stamping his authority on the government he nominally leads, that he has given birth to the first ‘ism’ in politics to denote not the existence of a political philosophy but the absence of one: ‘Majorism’ . . .” Such savagery is not Sir Keir Starmer’s style, but his cool dissection of the government’s failures at prime minister’s questions is equally wince-worthy; despite the prime minister’s bravado, we see the wounds and scent the blood.

While Major’s government was doomed by the drumbeat of sleaze, Boris Johnson’s is doomed by something worse: the drumbeat of incompetence. Tories are expected to be bastards — this is priced in — but they are also expected to be capable. I needn’t rehearse the full catalogue of Covid failures here; you know the drill, from the “world-beating” test and trace system that wasn’t, to the A-level fiasco that was. It leaves us with a government whose every announcement is met not with respectful silence but rolls of the eyes. In 2017 the novelist Robert Harris said of Theresa May’s administration that, though only months old, it “already has a whiff of decay about it”. We might say the same today.

With four years to go before the next election the government needs to find a way of shedding this dull skin. With a difficult winter ahead, now is not the time to contemplate change — but the Conservative Party must seek renewal in the spring or summer of next year. That will only be possible if three things happen.

First, a break in the business of politics. There must be a period in which there are no frenetic policy announcements, no attempts to lead the news or win column inches, no speeches about “revolutions” in education or the NHS. When the worst of the second Covid wave is over politicians must realise that we the nation are fatigued with politics and retreat for a while accordingly.

Second, there must be a cull to rid the cabinet and wider government of those picked mainly for their Brexit loyalty. It taxes the patience of the public to see people in roles that are evidently too weighty for them. Though it is true that this parliament is thin on talent, there are still some outstanding contenders in the ranks, mainly overlooked on account of being (horror!) Remainers or (shudder!) older white men. Let ancient hostilities cease and meritocracy be restored; if merit were the only criteria, former ministers such as Victoria Atkins, Mel Stride and Sir John Hayes would soon rise.

Third — and most importantly — Johnson must recognise that 2021 is the time to leave the stage. It is hugely tempting for prime ministers to carry on and on in the hope that “something will turn up” to rescue their waning popularity; Gordon Brown and Theresa May clung on in the belief that they would somehow prove the British people wrong, like gamblers who won’t be dragged from the roulette table because at the next spin of the wheel all will come good.

It never comes good. Once political authority wanes it never waxes. The fatal point comes when prime ministers go from object of ridicule to object of pity. A few snapshots spring to mind: Major derided as “weak, weak, weak” in the Commons; Brown’s pained smiles in his man-of-the-people video messages; May valiantly dancing on stage at the party conference. When the room is watching you through its fingers you have lost the room.

We are not there yet with Johnson but the trajectory does not look good — and we know how ruthless the Conservative Party is with leaders deemed past it. As Churchill once said: “The loyalties which centre upon number one are enormous. If he trips, he must be sustained. If he makes mistakes, he must be covered. If he sleeps, he must not be wantonly disturbed. If he is no good, he must be pole-axed.” The warning rings especially true for Johnson, who did not spend years in the Commons tearoom making friends and cultivating deep reserves of loyalty. Parliamentary loyalty to him is anchored in nothing other than his ability to win. If it appears he has lost that ability the loyalty will evaporate and the knives will come out.

Though it might seem mad to voluntarily surrender the crown you have coveted for decades, Johnson might in quieter moments reflect that he really is not enjoying this. His driving desire as a person and politician is to make people feel good. He is pathologically opposed to gloominess, pessimism, even realism. His famous policy on cake, “pro having it and pro eating it”, is his policy on life. For a man like this the dream was not only to win the premiership, but for that premiership to be characterised as a feelgood era, Macmillan’s “You’ve never had it so good” mark II. There was to be public money splashed around, landmark building projects to induce pride, trade deals garlanded with Johnsonian metaphors about national virility. Then coronavirus hit, creating the least feelgood time in living memory. Far from fun, frolics and jollity, his premiership is a time of death, distance and antiseptic — and it is only going to get worse: mass unemployment, bankruptcies and resultant despair. The government will be loathed by the left for the spiralling unemployment rolls and loathed by the right for the spiralling national debt. To bear it, any prime minister would need a skin thick as rhino hide and Johnson’s is thin. This is not an insult; I am a fan of sensitive souls, but we are entering years requiring a leader with an ox-strong political constitution, not a people-pleaser.

If he wants to rescue his reputation Johnson should not be planning for a full term but plotting his exit. Major has shown how a once-derided prime minister can be resurrected as a figure many listen to and respect. Lazarus acts are possible, but timing is vital. For a man who cares as much about popularity as Johnson does, he would be wise to realise that he would go down far better as one who led Britain through a brief but critically important space in its history, than as a prime minister who continued to occupy office long after the jig was up.


Thus spake the algorithm

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The reason was apparently that the database is managed in Excel and the number of columns had reached the maximum. @MaxCRoser

In the UK the number of cases rose rapidly.

But the public – and authorities – are only learning this now because these cases were only published now as a backlog.

The reason was apparently that the database is managed in Excel and the number of columns had reached the maximum.

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.17805

Dollar Index 93.480

Japan Yen 105.6830

Swiss Franc 0.91520

Pound 1.298535

Aussie 0.71550

India Rupee 73.3428

South Korea Won 1162.000

Brazil Real 5.5756000

Egypt Pound 15.7400

South Africa Rand 16.60775

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Long Buoyed by High-Flying @emirates Dubai Now Shares Its Woes @WSJ H/T @TheTruthPact
Emerging Markets

DUBAI—Emirates Airline powered Dubai’s rise from desert backwater to teeming Mideast metropolis, making the city one of the world’s biggest intercontinental hubs and generating a yearslong economic boom.

But now, the coronavirus pandemic and the economic devastation it has wrought have forced the first major downsizing for an airline that has weathered Middle East conflicts and oil-market shocks. 

As a result, the state-owned carrier’s woes are tearing through Dubai’s economy.

The airline’s parent company, one of Dubai’s biggest employers, has slashed tens of thousands of jobs from its 100,000-strong workforce after the pandemic halted much of global air travel, a fall from grace for an airline that long outmuscled competitors in the U.S. and Europe for landing rights and passengers.

That has in turn driven an exodus of Dubai-based expatriates linked to the airlines, shrinking spending at restaurants, bars and even private schools.

“It is extremely difficult for the hospitality sector, the restaurateurs, the hoteliers, but they are not alone,” Emirates Airline President Tim Clark said in an interview. 

“The number of people coming into Dubai has significantly reduced. Everything has got to go into a deep freeze.”

Dubai’s Rock Bottom Cafe, near an apartment building where Emirates houses hundreds of staff, once teemed with partyers until the early hours. Now it serves only about 50 people on the weekends, said Mitendra Sharma, the general manager of the Ramee Group, which owns the cafe as well as four hotels in Dubai. 

The group has cut staff from 1,000 to 300 as its hotels are at 10-15% occupancy, compared with nearly 95% this time last year, he said.

“Emirates was the driving force for the tourists, and it is cutting jobs and reducing destinations,” Mr. Sharma added. “All industries are affected as a result.”

Dubai’s government established Emirates in 1985 with $10 million and two leased aircraft from Pakistan International Airlines. 

The current ruler, Sheikh Mohammed bin Rashid Al Maktoum, helped set up the carrier and ordered that it had to “be good, look good and make money.”

The airline soon became one of the world’s biggest, using a fleet of wide-body jets to ferry passengers through its Dubai hub. 

Many travelers began to stop in the city, driving hotel and shopping mall construction. 

That helped contribute to a bubble in the real-estate market and a dramatic collapse during the financial crisis in 2009.

By building a global network that served developing markets, Emirates endured the economic pain in Dubai. It also added to the growing cityscape, building accommodations to house its staff and expanding into hotel operations. 

In 2014, Dubai International overtook London’s Heathrow as the world’s busiest airport for international travelers, largely driven by Emirates

The city became a playground for Europeans seeking winter sun and Saudis deprived of entertainment options in their more conservative kingdom.

The numbers of pilots, cabin crew and other staff also swelled. “Ladies Night” became popular with Emirates’ majority-female cabin crew in bars on Tuesdays and bottomless Friday brunches multiplied across the city’s hotels and restaurants, fueled in part by aviation professionals.

These same places are dealing not only with Emirates’s job cuts but coronavirus-related restrictions—a double whammy that has wrung the life out of some establishments.

David Cattanach, the general manager of the Irish Village, a popular bar located near Emirates training facilities at Dubai International Airport, said it has to contend with both fewer customers and rules that patrons must keep 6 feet apart. 

“We won’t break even until the vaccine comes,” he says.

While Dubai reopened to tourists on July 7 after a three-month closure, travel from its top feeder markets—India, the U.K., Saudi Arabia, China and Russia—has remained depressed due to high levels of infections or travel restrictions. 

The surge in cases globally means Emirates is now carrying 12% of the passengers it did this time last year, according to Mr. Clark.

Dubai’s travel and tourism sector has contracted each month since January, mirroring a decline in activity across the emirate, according to an index compiled by IHS Market. 

Real-estate firm Colliers International predicts Dubai hotels will see occupancy of just 45% to 50% during 2020. 

S&P Global Ratings said Saturday it expects Dubai’s economy will contract by around 11% in 2020, citing the city-state’s concentration in travel and tourism.

The U.A.E. reported 1,231 new daily coronavirus cases Saturday, a record, taking its total to 97,760 cases and 426 deaths since the pandemic began.

To entice people to travel, Emirates is committing to covering passengers’ medical expenses if they are diagnosed with Covid-19.

“That’s been really, really helpful,” said Kabir Mulchandani, who runs the luxury five-star Five Hotel on Dubai’s palm-shaped island. 

It saw occupancy among tourists collapse at the start of the pandemic but is now welcoming more foreigner travelers.

Emirates passengers coming to the United Arab Emirates must present a negative Covid-19 test four days before departure. 

Dubai doesn’t break out figures on cases, but its population makes up a third of the nearly 10 million people in the U.A.E., which on Sept. 21 surpassed China in total confirmed infections.

Dubai officials have long wanted the airline to operate without further cash injections from the state and to remain profitable in its own right. 

Emirates said it would need a bailout in March. Officials moved quickly to shore up the airline with $2 billion in equity, the first time the government had provided fresh capital since its establishment.

The Dubai government didn’t respond to questions on the bailout or broader impact of Emirates’ downsizing. The airline declined to comment on cost savings from the job cuts.

GymNation, a fitness center operator popular with cabin crew, lost members after Emirates job cuts and for a moment considered nixing plans to open a new branch near staff apartments but decided to move ahead, hoping the airline would rehire once the global travel market rebounds, according to CEO Loren Holland.

The Dubai branch of private school Kent College—a U.K. institution that Mr. Clark attended as a child—is now negotiating discounts with parents of Emirates staff who have lost their jobs, according to Principal Anthony Cashin.

 Pilots still employed also have had education allowances trimmed, further straining the school’s finances, he said.

“It’s a tough time,” Mr. Cashin added. “We’re working with families case by case.”

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24 FEB 14 :: Dubai is the real transit state, a connection point in an interconnected century
Emerging Markets

“There is nothing like a dream to create the future,” Victor Hugo said.

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Real #GDP in #Mauritius plummeted by 32.5% y-o-y in Q2 2020 after contracting by 2.6% y-o-y in Q1. @NKCAfrica

The tourism and construction sectors have been hardest hit during the Covid-19 crisis.

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RBZ foreign debt has increased from US$700 million in October 2017 to US$4.8 billion in July 2020. @EdmundKudzayi

"Expenditure control: we have basically stopped using the central bank overdraft window," Mthuli says, yet RBZ foreign debt has increased from US$700 million in October 2017 to US$4.8 billion in July 2020. Hopefully somebody in that room takes him to the cleaners.

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The Point I am seeking to make is that There is a correlation between high Inflation and revolutionary conditions

In Zimbabwe, Inflation clocked 42.1% in December [nothing close to The peak month of hyperinflation which occurred in mid-November 2008 when the rate was estimated at 79,600,000,000% per month]. 

I have been reading Yuval Noah Harari and in his best-seller he says this about money;

“Money is accordingly a system of mutual trust, and not just any system of mutual trust: money is the most universal and most efficient system of mutual trust ever devised.”

“Cowry shells and dollars have value only in our common imagina- tion. Their worth is not inherent in the chemical structure of the shells and paper, or their colour, or their shape. In other words, money isn’t a material reality – it is a psychological construct. It works by converting matter into mind.”

The Point I am seeking to make is that There is a correlation between high Inflation and revolutionary conditions, 

Zimbabwe is a classic example where there are $9.3 billion of Zollars in banks compared to $200 million in reserves, official data showed.

The Mind Game that ZANU-PF played on its citizens has evaporated in a puff of smoke. 

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Data from the Central Bank of Kenya (CBK) shows that non-performing loans (NPLs) rose to Sh394.4 billion in August, up from Sh349.9 billion at the end February — the sharpest six-month increase in recent history. @BD_Africa
Kenyan Economy

Workers and businesses defaulted on loans worth Sh45 billion in the six months to August when Kenya imposed stringent measures to contain the spread of the coronavirus.

Data from the Central Bank of Kenya (CBK) shows that non-performing loans (NPLs) rose to Sh394.4 billion in August, up from Sh349.9 billion at the end February — the sharpest six-month increase in recent history.

The NPL growth emerged in a period when Kenyans deferred payments of 38 percent of the bankers’ total loans or Sh1.12 trillion, a pointer that defaults — which is credit that remains unpaid for more than 90 days — could have been worse without the credit rescheduling.

The ratio of NPLs rose from 12.7 per cent in February to 13.6 per cent — the highest since August 2007 when it stood at 14.41 per cent.

Industries and other businesses have since cut down on their activities in response to the infectious disease, leading to job cuts and unpaid leave for retained staff as profitable firms move into losses.

This has seen workers who had tapped mortgages and unsecured loans for purchase of goods such as furniture and cars and expenses like school fees default. Unsecured loans are given on the strength of one’s salary.

Firms that had borrowed based on the forecast of cash flows have also been struggling to repay their bank loans.

“The NPL increases were noted in the real estate manufacturing, personal sectors and transport and communication sectors due to a subdued business environment,” said the CBK.

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ATM use halves over pandemic @BD_Africa
Kenyan Economy

The use of ATMs in Kenya has halved in the wake of coronavirus as Kenyans opt for contactless payment systems, a survey by Standard Chartered Plc has revealed.

The survey across 12 markets including Kenya has shown that the Covid-19 pandemic has accelerated the adoption of non-cash channels as consumers reduce their exposure to the highly infectious disease.

In Kenya, 79 percent preferred to shop in-person prior to the pandemic compared to 21 percent online. But this has shifted significantly, with more than half (51 percent) now preferring online payments to in-person, card or cash payments for future purchases.

“Cash withdrawals from ATMs are now half what they were two years ago. Today, 89 percent of transactions are being conducted digitally with a 62 percent and 90 percent penetration for our retail and corporate clients respectively,” said Edith Vjuma, the head of retail banking at Standard Chartered Bank Kenya.

Increased uptake of digital channels for payments has also been aided by the Central Bank of Kenya's removal of charges on M-Pesa transaction of up to Sh1,000 as well as elimination of charges on bank-to-M-Pesa cash transfers. 

The waiver was aimed at reducing use of cash and the attendant risk of Covid-19 being transmitted from person to person.

Data from the CBK shows that the daily average mobile phone money transactions of less than Sh1,000 grew 83 percent to Sh1.98 billion daily between April 20 and May 10 when compared to the days before March 16.

Kenyans have, however, reduced their spending on nonessentials, with funds being redirected to groceries and healthcare.

According to the survey, consumers spent 58 percent more on groceries, a 59 percent increase in spend on digital devices, and a 39 percent increase in healthcare expenditure.

Conversely, 80 percent of people say they have spent less on travel/holidays than they did before the pandemic, while 49 percent have spent less on experiences, and 83 per cent have spent less on clothes.

The online survey of 12,000 adults was conducted in August in 12 markets including Hong Kong, India, Indonesia, Kenya, Mainland China, Malaysia, Pakistan, Singapore, Taiwan, UAE, the UK and the US.

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

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