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Satchu's Rich Wrap-Up
Tuesday 13th of October 2020

Global economic recovery from Covid pandemic is fragile and patchy Risk of prolonged economic scars rising, Brookings-FT index warns @FT
World Of Finance

The global economy has achieved only a fragile recovery from the depths of the coronavirus pandemic and many emerging economies are still suffering severe hardship, according to the latest Brookings-FT tracking index.

Growth in the world’s largest economies has been uneven according to the index, which highlights the precarious outlook that will form the backdrop for the annual meetings of the IMF and World Bank this week.

With a second wave of coronavirus undermining efforts to return to normal, businesses’, households’ and investors’ confidence shaken and little scope for additional monetary policy stimulus, most countries have a long way to go before output reaches pre-pandemic levels.

“A broad-based and robust recovery does not appear on the horizon,” said Professor Eswar Prasad of the Brookings Institution, adding that the “risks of substantial and long-lasting scarring effects on economies are rising”.

The meetings will be held virtually from Washington this week. Kristalina Georgieva, managing director of the IMF, said last week the recovery from the Covid-19 crisis would be, “long, uneven and uncertain. And prone to setbacks.”

Economic data from across the world are weaker than the worst point in any previous downturn since the Brookings-FT Tracking Index for the Global Economic Recovery (Tiger) started in 2012.

The index compares indicators of real activity, financial markets and confidence with their historical averages for the global economy and for individual countries, capturing the extent to which data in the current period is normal.

It showed the recovery in advanced economies is far from complete after a historic drop in the spring, and the situation in emerging markets is much worse with indicators still far removed from normal levels.

Even though manufacturing has recovered strongly, boosting world trade, and household spending has generally remained strong as governments in developed economies have replaced lost earnings with wage subsidies, the corporate outlook is troubled and businesses’, households’ and investors’ confidence is low, threatening to undermine the strength of any recovery.

Prof Prasad said: “Private sector confidence has been battered, which does not bode well for business investment and employment creation.”

However, financial markets have been stable after the initial shock, ensuring that they did not amplify the health emergency.

Although the recovery has been tepid, the world escaped much greater harm because of the enormous use of fiscal policy, said Prof Prasad. 

Central banks also did what they could but monetary policy was shown to be running short of ammunition, he said, with the limits of their remaining scope for policy action becoming “increasingly apparent”.

“Central banks are in peril of increasing entanglement in their economies through purchases of corporate and government bonds and direct financing of firms, which could leave them vulnerable to political pressures and threats to their independence in the future,” he said.

The US has performed more strongly than many European countries, with unemployment falling over the summer. 

However its recovery slowed in recent months as the country lost control of coronavirus outbreaks and politicians fought over renewing support for unemployed households.

In addition to many of the same risks, the eurozone faces the threat of deflation; its annual rate of inflation recently turned negative. 

Its recovery has been patchy and linked to success in tackling the virus, with Germany performing better than Italy, Spain and France. In all countries, service sectors have taken a battering.

In Asia, China is showing the strongest recovery, having regained most of the economic activity it lost when Covid-19 first struck in January and February; despite this, its performance this year will be worse than any since it opened up its economy to trade in the early 1980s.

Its success in getting rid of the virus with a harsh lockdown and subsequent reopening stands in contrast to India, which suffered many more cases and deaths, preventing the economy from functioning.

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Keep buying historic valuations because the magic money fairy will keep bailing us out. @NorthmanTrader
World Of Finance

The bull case: Nothing matters.

Not debt, not growth, not earnings, not layoffs, not valuations, not forward multiples, not tax hikes.

Keep buying historic valuations because the magic money fairy will keep bailing us out.

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Just weeks after the stock market crashed in 1929, President Herbert Hoover assured the country that things were already “back to normal,” Liaquat Ahamed writes in Lords of Finance
World Of Finance

Five months later, in March 1930, Hoover said the worst would be over “during the next 60 days.”

When that period ended, he said, “We have passed the worst.”

Eventually, Ahamed writes, “when the facts refused to obey Hoover’s forecasts, he started to make them up.”

Government agencies were pressed to issue false data. Officials resigned rather than do so, including the chief of the Bureau of Labor Statistics.

And we all know how that turned out: The Great Depression.

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Countries with most average #COVID19 cases per day. @jmlukens

Country - Avg/Day

India - 52,675 

US - 43,592 

Brazil - 23,963 

United Kingdom - 12,604 

Argentina - 12,068 

Russia - 10,270 

France - 9,735 

Colombia - 7,023 

Spain - 6,814 

Mexico - 3,960

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Coronavirus infectious for 28 days on surfaces, study says @NikkeiAsia

The virus that causes COVID-19 can survive on banknotes, glass and stainless steel for up to 28 days, much longer than the flu virus, Australian researchers said on Monday, highlighting the need for cleaning and handwashing to combat the virus.

Findings from the study done by Australia's national science agency, CSIRO, appear to show that in a very controlled environment the virus remained infectious for longer than other studies have found.

CSIRO researchers found that at 20 degrees Celsius (68 degrees Fahrenheit) the SARS-COV-2 virus remained infectious for 28 days on smooth surfaces such as plastic banknotes and glass found on mobile phone screens. 

The study was published in Virology Journal.

By comparison, Influenza A virus has been found to survive on surfaces for 17 days.

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BLAND FANATICS Liberals, Race, and Empire By Pankaj Mishra @nytimes

Aside from a few years during the 1970s, when military defeat in Vietnam, the traumas of Watergate and a hangover from the cultural convulsions of the 1960s briefly inspired pangs of national self-doubt, the Grand Narrative of liberalism has dominated public discussion and debate in the United States. Until roughly five years ago, that is. That’s when antiliberal passions that had been stirring for some time on the right and left first began to win popular support in America and elsewhere, driving Bernie Sanders’s potent primary challenge to Hillary Clinton, preparing the outcome of the Brexit referendum in Britain and making possible the victorious presidential campaign of Donald Trump.

Mishra’s title comes from an observation by the theologian Reinhold Niebuhr, who noted in 1957 that the ruling classes of the West were dominated by “bland fanatics,” who treated “the highly contingent achievements of our culture as the final form and norm of human existence.” In more recent decades, Mishra says, these “simple-minded and misleading ideas and assumptions” have come “to shape the speeches of Western statesmen, think tank reports and newspaper editorials, while supplying fuel to countless logrolling columnists, television pundits and terrorism experts.”

Yet “a great correction is underway today, with triumphalist narratives of British and American exceptionalism interrogated” as never before and “the world as we have known it … crumbling.” Through much of the book, Mishra sounds downright giddy to be living through a time when “many of our exalted ideas about ourselves have collapsed” and “mind-numbing simplicities about democracy” are being shattered.

This counternarrative begins not with ideals of democracy and freedom but with settler colonialism wiping out America’s Native populations to make land available for white development, chattel slavery fueling capitalist growth through the mid-19th century and then imperialism enabling the economic exploitation of societies abroad.

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Whoever Controls The Narrative Controls The World
World Of Finance

And it all left me wondering Who exactly is controlling the Console?

Is this Statue toppling business a Gladwellian and metastatic type Event?

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21 OCT 19 :: “The revolutionary contingent attains its ideal form not in the place of production, but in the street''
Law & 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.’’

Antonio Gramsci wrote, “The crisis consists precisely in the fact that the old is dying and the new cannot be born; in this interregnum, a great variety of morbid symptoms appear. now is the time of monsters.”

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How Buhari responds to the #SARSMUSTEND protest could define his presidency. @Pol_Sec_Analyst
Law & Politics

He can either deliver on his promise to improve national security by ending police impunity or choose to allow Nigerias security services to emerge as yet another force victimizing ordinary civilians

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Researchers coming back from a year-long research expedition in the Arctic have bad news: "the Arctic Ocean is dying." @dwnews

The Polarstern research vessel will dock in Bremerhaven, Germany on Monday after spending 389 days drifting through the Arctic, where scientists gathered more than 150 terabytes of data and 1,000 ice samples. 

While it will take up to two years to analyze all of the data, the initial reports said the ocean was failing.

"We witnessed how the Arctic Ocean is dying," mission leader Markus Rex told AFP. "We saw this process right outside our windows, or when we walked on the brittle ice."

Over 70 research institutes from 20 countries took part in the research, which showed an Arctic Ocean in peril. 

According to Rex, sometimes so much ice had melted that there were large patches of water that "sometimes stretch[ed] as far as the horizon."

"At the North Pole itself, we found badly eroded, melted, thin and brittle ice," he added.

The Arctic plays a key role in the global ecosystem, as it cools tropical air from the south to create weather and air currents. 

Without the Arctic cooling tropical air, it would change weather systems and conditions throughout the world.

Rex warned that if the warming trend in the North Pole continued, then there could be "an ice-free Arctic in the summer."

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Currency Markets at a Glance WSJ
World Currencies


Dollar Index 93.207

Japan Yen 105.4145

Swiss Franc 0.910740

Pound 1.303060

Aussie 0.717755

India Rupee 73.3525

South Korea Won 1147.72

Brazil Real 5.531000

Egypt Pound 15.691500

South Africa Rand 16.561800

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We six days away from elections in Guinea & situation looks worrying. @Pol_Sec_Analyst
Law & Politics

We six days away from elections in Guinea & situation looks worrying. Over the weekend, supporters of President Alpha Conde stopped a campaign event by opposition leader Cellou Dallein Diallo in Kankan, beating up opposition supporters & ransacking local businesses. Not good

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Sudan’s prime minister has appealed to Washington to remove Khartoum from its list of state sponsors of terrorism, saying it would be a “game changer”
Law & Politics

In an interview for the Financial Times Africa Summit, Abdalla Hamdok, who was chosen to head a military-civilian interim government after a coup ended the 30-year dictatorship of Omar al-Bashir, said US sanctions stemming from Sudan’s terrorism status were “crippling our economy”.

There was no guarantee the transition to democracy would stay on course until elections scheduled for 2022, he said.

“Transitions are always messy. They are non-linear and they don’t travel in one direction,” the 64-year-old economist said.

“We are isolated from the world,” Mr Hamdok said. He added that it was unjust to treat Sudan as a pariah state more than 20 years after it expelled bin Laden, and a year after it overthrew the regime that harboured him.

“Sudanese people have never been terrorists. This was the deeds of the former regime,” he said.

Mr Hamdok acknowledged that the economy was on its knees. The currency was in freefall, inflation was running at 160 per cent, and the budget deficit, at 12 per cent of gross domestic product last year, would balloon to more than 20 per cent of GDP in 2020, he said. 

The state raised taxes of just 6 per cent of GDP.

“You can’t run a decent government on that,” he said.

His administration was preparing to scrap fuel subsidies to save $2bn annually, the prime minister said, though it would keep subsidies on wheat, cooking gas and other basics.

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The outlook across the commodities sector is a mixed bag, according to @Trafigura CEO Jeremy Weir. @GongComms

Speaking at #FTAfrica summit, he explained the growth in global electrification will see a rally in copper and cobalt, at the expense of an uncertain oil market in Africa.

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“Of course we are concerned. This is the first case when insolvency is knocking on the door,” @KGeorgieva @IMFNews told the @FT Africa Summit

“Some now are being somewhat helped by the improvement in commodity prices. [Zambia] is a country that does need to very seriously address the high level of debt. We have been encouraging Zambia to proactively work with its creditors.”

The Chinese government is taking part in the debt relief on official DSSI terms, but some official Chinese lenders have said they will only agree to participate if their share of some $200m of arrears has been cleared first, Zambia’s ministry of finance told the Financial Times. 

It disclosed the Chinese arrears to international bondholders last week.

Both the IMF, which has received a bailout request from Zambia, and bondholders are likely to be reluctant to hand over or forgo money if it is then used to pay arrears to Chinese creditors, analysts say.

“We want equal treatment for all different types of creditors to Zambia,” said Sergey Goncharov, a portfolio manager at Vontobel Asset Management.

Last month, President Edgar Lungu’s government asked holders of its $3bn US dollar-denominated bonds to suspend payments worth just under $200m while it negotiates the IMF loan and prepares a complete restructuring of its debt. 

Investors owning enough bonds to block the suspension request asked for more information about the size of Zambia’s Chinese debts first.

In addition to seeking deals to defer payment of the arrears, Zambia wants Chinese lenders to suspend or reschedule another $225m in payments, out of a total of $426m due this year, according to the answers it gave the bondholders last week.

“China never presses for repayment of debts, and in line with the international community, seeks appropriate solutions through friendly discussions,” China’s foreign ministry said in response to questions from the FT. “We support the Zambian government to negotiate and resolve debt issues with creditors, in accordance with the ‘equal treatment of creditors’ principle,” it said.

Trevor Simumba, a Zambian analyst of the country’s debt, said it would be difficult for the government to convince Chinese creditors to defer arrears because of the precedent the move would set elsewhere in Africa.

China Export-Import Bank, one of Zambia’s biggest lenders, has backed infrastructure projects across the continent. 

“There is no way China ExIm Bank is going to do any favours to Zambia . . . I don’t see an easy debt restructuring,” Mr Simumba said. 

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@Kakuzi_Plc Press Statement
N.S.E Equities - Agricultural

Leigh Day have made it clear in their communications to Kakuzi that the Kenyan legal system is incapable of dealing with these cases.  In their view the allegations can only be heard in a British Court.  Kenya attained its independence from Britain over 57 years ago @Kakuzi_Plc

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

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