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Satchu's Rich Wrap-Up
Tuesday 05th of January 2021

04-JAN-2021 :: What Will Happen In 2021
World Of Finance

Robert Frank Children with Sparklers in Provincetown Massachusetts, 1958 @deryainciderya

New Year's Eve: Wuhan New Years Eve 2020

Times Square New Years Eve 2020

in many respects, 2020 was simultaneously both fathomable and unfathomable. it was fathomable because the Pathogen has always been there since time immemorial and lurking in the recesses. It was fathomable because Mankind has always reacted similarly as Nietzsche noted

"Time is a flat circle. Everything we have done or will do we will do over and over and over again- forever."

“Making masks a culture war issue was the dumbest thing imaginable,” said an Advisor to President Trump but remember it was also a culture war issue during the Spanish Flu.

The Virus and The Economy

In 1720 Marseille allowed a ship from plague-ridden Cyprus into port, under pressure from merchants who wanted the goods and didn’t want to wait for the usual quarantine. More than half the population of Marseille died in the next two years

Ibn Khaldun explained the intrinsic relationship between political leadership and the management of pandemics in the pre-colonial period in his book Muqaddimah 

Historically, such pandemics had the capacity to overtake “the dynasties at the time of their senility, when they had reached the limit of their duration” and, in the process, challenged their “power and curtailed their [rulers’] influence...” 

Rulers who are only concerned with the well-being of their “inner circle and their parties” are an incurable “disease”. 

States with such rulers can get “seized by senility and the chronic disease from which [they] can hardly ever rid [themselves], for which [they] can find no cure”

Chancellor Merkel pronounced “You cannot fight the pandemic with lies and disinformation...the limits of Populism are being laid bare.”

And wherever You care to turn whether it is the US under Trump, the United Kingdom under Boris Johnson, we are witnessing massive decline in the cognitive capacity of leadership and a steep decline in the intellectual capacity of the cognitive capacity of the corpus.

We live in an Era of gobbledygook debate, a moment of complete combustion. Just open your social media account and its a torrent of bite sized nonsense. This is the Achilles Heel which the Sun Tzu Maestro Xi Jinping understood and the Viral War he launched was a perfectly aimed Bullet.

Today only the Paid for Propagandists and Virologists and WHO will argue that there is a ''zoonotic'' origin for COVID19. 

It is remarkable that the Propaganda is still being propagated more than a year later. There is no natural Pathway for the Evolution of COVID19.

the ONLY place where this thing could emerge, naturally or Artificially, is by passage in HUMANIZED MICE. 

"Most logical" explanation for SARS-CoV-2 is that it comes from a lab – virologist

Those who have chosen to propagate this narrative are above the radar and in plain sight and need to be called to account. The Utter Failure to call these 5th columnists to Account is the clearest Signal that there is no external threat because it is already on the inside.

The ''warp speed'' Vaccine Roll Out is chasing the coat Tails of the Virus.

''Reported'' Daily numbers are in the 650,000 to 750,000 daily range and set to undergo an exponential Phase Shift higher this month.

Therefore the Virus remains an exogenous uncertainty that is still not resolved.

Markets surfed higher last year on a simply unprecedented Liquidity Wave and it is difficult for now to see an About Face in that regard. 

In fact I expect all G7 Curves 0-10 Years to be deep in negative territory in 2021. [The Optimal Trade is to be long Dec 2021 Short Sterling or Call Options on the same contract LZ21 (Dec '21) 100.065s]

Developed Equity Markets were lifted to records by the Tidal wave of Free Money and clearly we can expect this Momentum to spill over into January. 

However, the dislocation between underlying economies and market capitalisation is now extreme and Buyers should remember the story of Sir Isaac Newton and the South Sea Bubble.

Graham writes,

Back in the spring of 1720, Sir Isaac Newton owned shares in the South Sea Company, the hottest stock in England. Sensing that the market was getting out of hand, the great physicist muttered that he ‘could calculate the motions of the heavenly bodies, but not the madness of the people.’ Newton dumped his South Sea shares, pocketing a 100% profit totaling £7,000. But just months later, swept up in the wild enthusiasm of the market, Newton jumped back in at a much higher price — and lost £20,000 (or more than $3 million in [2002-2003’s] money. For the rest of his life, he forbade anyone to speak the words ‘South Sea’ in his presence.

The Dollar has been a one way Bet to the downside since H2 2020 and has underpinned the rebound in the Commodity Markets and in EM Assets. Whilst the Trend is Your Friend I would be buying 1 Year Call Options because the risk with the Dollar remains asymmetric and to the Upside particularly if Economies do not meet some of the rose tinted spectacle forecasts for 2021 GDP.

As I write this on the 3rd of January 2021 $BTC has touched 35,000.00 in a parabolic shift higher. I believe $BTC's recent surge puts it now in ''nose-bleed'' territory. I believe its a Trading Sell with a very wide Stop. It is currently at its maximum ''Safe Haven'' / Fiat debasement premia.

My Top Trades are Gold and Silver. I expect Gold to top $2,500 this year and Silver to reach $50.00

I wish you a wonderful 2021.

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26 MAR 18 :: "It's no use fighting elections on the facts; it's all about emotions."
Law & Politics

 "So the candidate is the puppet?," the undercover reporter asked. "Always," replied Mr Nix.

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This chart represents the daily number of confirmed cases of COVID-19 against time, in days. A rolling mean of 4 days has been applied. @CovidTracker_fr

Data from #Covid19 in the world on January 04:

 + 549,956 cases in 24 hours, i.e. 85,672,730 in total

 + 10,201 deaths in 24 hours, i.e. 1,854,030 in total

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Ireland 6,110 #COVID19 cases yesterday double 3,015/day 1wk avg. Zambia showing early signs of new outbreak. @jmlukens

COVID-19 2wk avg case/day increase

#Ireland: 453%

#Zambia: 360%

#Bolivia: 166%

#Egypt: 128%

#Israel: 118%

#Eswatini: 97%

#UK: 88%

#Botswana: 79%

#Cuba: 74%

#Thailand: 72%

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.2260

Dollar Index 89.789

Japan Yen 102.92

Swiss Franc 0.8809

Pound 1.3568

Aussie 0.7707

India Rupee 73.1575

South Korea Won 1088.70

Brazil Real 5.2974

Egypt Pound 15.731

South Africa Rand 14.7874

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Dollar Index Chart @jfhksar88 89.789
World Currencies

The Dollar has been a one way Bet to the downside since H2 2020 Whilst the Trend is Your Friend I would be buying 1 Year Call Options because the risk with the Dollar remains asymmetric 

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Chinese billionaire Jack Ma suspected missing @YahooFinance

Speculation has swirled around Chinese billionaire Jack Ma’s whereabouts after reports surfaced that the high-profile businessman has not made a public appearance in more than two months.

The Alibaba founder also failed to appear as scheduled in the final episode of his own talent show, Africa’s Business Heroes, which gives budding African entrepreneurs the chance to compete for a slice of US $1.5 million.

Ma was supposed to be part of the judging, but was replaced by an Alibaba executive in the November final, UK’s Telegraph reported. His picture was also taken off the website.

An Alibaba spokesperson said Ma was unable to take part on the judging panel “due to a schedule conflict”, according to Financial Times.

Ma’s business empire, Ant Group, has been under scrutiny by Beijing ever since Ma delivered a controversial speech in Shanghai on 24 October that criticised China’s regulation system for stifling innovation and likened global banking rules to an “old people’s club”.

“Today’s financial system is the legacy of the Industrial Age,” Ma said in the speech.

“We must set up a new one for the next generation and young people. We must reform the current system.”

Little over a week later, Ant’s IPO (valued at a record-setting US $37 billion or AU $48 billion), which had already received the green light from China’s securities watchdog, was suspended, with the Shanghai Stock Exchange saying Ant had reported “significant issues such as the changes in financial technology regulatory environment”.

But US veteran investor Mark Mobius said the move was designed to curtail financial institutions from getting too big.

“I believe the Chinese government stepped in because they realised that they had to regulate these companies, so that they don’t … get too big,” he told CNBC.

“The Chinese government is waking up to the fact that they cannot allow these companies that dominate a particular sector and particularly the financial sector.”

Chinese authorities launched an anti-monopoly investigation into Alibaba in late December and told Ant Group to restructure its operations.

Ma has donated millions of face masks to Europe, the US and the World Health Organisation in a bid to stem the pandemic.

The billionaire is also involved in charity work, with the Jack Ma Foundation focused on areas of education, entrepreneurship, female leadership, and the environment.

The Foundation has distributed or pledged more than US $300 million, Forbes reported.

Ma’s last tweet was on 10 October last year.

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There is frequently a "coming to Jesus" meeting in Beijing where any number of things can happen

Alibaba’s Jack Ma is still young, healthy, and his company is firing on all cylinders.  Yet, he recently stepped down as chairman at a handsome ceremony – posing as a rock star and singing a few tunes.  

The musical theme was appropriate.  He has been whistling past the graveyard for many years – as is the lot of prominent businessmen in the People’s Republic of China.

How a private business operates in a Communist Party-run state is a perpetual head scratcher.  However, a Western businessman with over three decades experience in China offered some insights.

You see, the Jack Ma’s of China may be entrepreneurs, but they are as much “Chinese Communist Party (CCP) corporate trustees.”  And Ma’s usefulness as a CCP corporate trustee has reached the end of its shelf-life.

The businessman continued:

Jack Ma and Alibaba were in effect used by the Party to counter eBay’s unexpected and stunning success in China.  And in China, the Party always wins.  As eBay’s fortunes sagged and Alibaba’s took off so did the career of Jack Ma.  

Under the mild-mannered Premier Hu Jintao, Ma became a national and international icon.  He served many roles the Party wanted China and the world to see. 

When Xi Jinping came into power Davos was not big enough for Xi and Ma.  Someone had to go.  

It was clear to a lot of people that Ma began to chafe under Xi’s increasing expectation that trustees like Ma subordinate themselves entirely to Xi.  

Ma perhaps didn’t know when to say “when.”  In 2015 he purchased 28,000 acres of pristine upper New York state forest lands.  This was okay under Hu, not under Xi.  

As far as is known Ma still has the land that he designated “preserved for the environment.”   

As long as he steps down from Alibaba, acknowledges Xi’s supremacy, and only talks about the environment he may be able to keep the land (and his house on Hong Kong’s Peak).  

If he falls afoul, Beijing will claim Ma purchased the land with “black money” and will want asset ownership turned over to the PRC government….a frequent tactic now when foreign real estate is the asset.  

One might expect Ma to declare his philanthropic future by building a conference and retreat center on the property where CCP officials and their corporate trustees can retire for rest, reflection, appreciation of the environment…..and meet Wall Street tycoons and American business leaders (and former U.S. State Department officials) to pitch the benefits of investing in China.

Indeed, maybe Jack Ma’s crowning achievement is not building Alibaba into a major global corporation.  Rather, it is staying both alive and out of jail as long as he has.

The businessman further explained:

Alibaba, like Huawei, HNA and similar ventures, are licensed and documented as “private” companies when in fact they are better thought of a as state-owned-private-enterprise companies (SOPE’s)…an expression the Western businessman coined.

The company “founders” are loyal CCP members (something Jack Ma kept hidden for many years) running the company effectively as CCP appointed trustees.  

The companies receive all kinds of perks (including protection), subsidies and access to whatever is needed to create powerful “champion’” companies across most major lines of business and industry.

Trustees are given executive responsibility to a great degree to run companies as they see fit – and thus appear like “regular” CEO’s of the Western sort.  But in doing so, they must follow these guidelines, noted the businessman:

-Must use company to fulfill CCP policy objectives (serve the party first and foremost)….these include political, business, brand-building and China nationalism objectives

-Build large entities in scope and scale, capability and capacity in their special field of endeavor

-Develop and/or acquire leading-edge technology

-Acquire Top 500 Company world status

-Be a major contributor to establishing new global standards for their respective business field (breaking the U.S. monopoly of the past 60 years or more)

These SOPEs have a deep line of credit with the CCP and the People’s Bank of China’s SAFE (State Administration of Foreign Exchange) should they need U.S. dollars for their overseas activities.   

As long as they stay within the CCP’s policy objectives FX (foreign exchange) authorizations continue.  

Try paying overseas in Chinese Yuan and it’s only a few degrees better than using Zimbabwe dollars.  

There’s a reason why moving one’s wealth overseas and turning it into U.S. dollars or other convertible currencies has been a national sport in China for years – even for CCP elites. 

The businessman continued:  The trouble starts when the celebrity trustee (they attain huge celebrity status in China) begins to get full of himself and starts to enter into transactions beyond his business scope.   

This is usually where the debt problem begins to appear because there is no automatic FX payment to bail them out of a non-policy transaction gone bad. 

Trying to fix the problem only makes its worse.  The attempted remedies don’t work – piling more debt on top of more debt. 

The CCP will fund SOPE debt as long as it goes to supporting policy objectives.  They will not fund non-policy debt.  Non-policy, usually debt-ridden ventures get sold off at fire sale prices. 

And there is frequently a “coming to Jesus” meeting in Beijing where any number of things can happen to a trustee – from forcing him to sell off non-policy debt-inducing assets, to accepting “retirement” to charges of corruption and a life sentence in prison….and no more access to the CCP’s official black hair dye #6.  

Indeed, CCTV showing court proceeding clips where the former celebrity tycoon now has white hair is the greatest indignity that can be levied on a person in political China.  The citizenry knows justice (such as it is) has been served.  

As a recent example of the CCP taking back one of its SOPEs….there is Anbang Insurance Company which got into a lot of things around the world other than insurance.  

The company was taken over by the government, renamed and rebranded as “Dajia Insurance.”  Its owner got 18 years in prison.

And the HNA conglomerate’s boss, Wang Jian, died in a fall in France last year after the company got overextended.  An accident?  The French police said so.  

But Chinese tycoons that run into trouble die with improbable frequency.  And as one observer put it:  “Typically, a man of Wang’s stature in China does not stand next to a 50 foot drop-off…especially for a photo.”   

But isn’t Alibaba different?  Yes and no.  Jack Ma wisely avoided the “overreach” that landed Anbang, HNA, and others in trouble.  

But in the PRC success can be as dangerous as failure.  And CCP leadership just might view highly profitable Alibaba as a juicy ripe peach.  The Party is the state (and everything in it), after all.

The businessman note that, of course, not all Chinese companies are SOPEs.  Small and medium size Chinese companies that you find seconded in distant parts of Los Angeles, for example, are wild-west outfits running up all kinds of debt in U.S. dollars.  

These are not SOPEs, do not have high-level backing and do not receive much consideration, if any, from SAFE. 

When these guys go broke you don’t want to be their creditor. 

So, despite Jack Ma’s considerable abilities and success, he can only be as successful and free as the CCP allows him to be.

I can hear it now…”Newsham you’re all wrong!”  Perhaps.  But here’s a test:  Have Jack Ma announce that he’s changed his mind and is going to retake Alibaba’s helm – running it as he sees fit and spending the earnings as he wishes.  

Will he be invited to a celebratory dinner in Zhongnanhai?  Maybe.  But if so, he’ll do well not to pose for photos afterwards on the rooftop.

This CCP sword of Damocles also hangs over foreign companies in China.  But there’s no shortage of Western executives who think it will be different for them. 

They’ve got well-connected Chinese friends who love them, and anyway, they are smarter than everyone else.

But this only ends one way.   Just wait a while and watch what happens to Elon Musk and Tesla after going all-in on China.

Musk should be glad he’s not Chinese.  He’ll only lose his company.

'You're nothing but a cloud’ Xi's message to Jack Ma. @adam_tooze

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CoViD19-ΛFЯICΛ: Confirmed: 2 830 401 (+ 21876) Actives: 417 467 (+ 9550) @NCoVAfrica

Confirmed: 2 830 401 (+ 21876)

Actives: 417 467 (+ 9550)

Deaths: 67 250 (+ 607)

Recoveries: 2 343 929 (+ 11719)

According to @NCoVAfrica PreviousPeak Daily Infections was 24th July 2020 and 20,873

Drinking the Kool-Aid We are not there yet. The exponential moment is still in front of us. #COVID19

Africa is currently reporting a million new infections about every 59 days @ReutersGraphics

a slow burning Fuse and we all know by now ''viruses exhibit non-linear and exponential characteristics'

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Africa 593 avg #COVID19 deaths/day up 55% past 2wks. @jmlukens

North America 3,580 avg deaths/day flat.  South America, Europe, Asia, and Middle East daily deaths on decline.

COVID-19 daily deaths, total deaths, and daily mortality rate vs time.

Africa The share of daily COVID-19 tests that are positive @OurWorldInData

Turning to Africa The Spinning Top

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"Kenya Nairobi-Naivasha Standard Gauge Railway Project -2015023. Loan of $1.482 billion to be repaid in 30 instalments from January 21, 2021 to July 21, 2035," the Treasury said. @BD_Africa

Loan repayments to China’s Exim Bank will jump from the Sh31 billion paid in the year to June 2019 to Sh71.4 billion in the current fiscal period, reflecting a 130 percent increase, and Sh111.47 billion next year.

Revenue collection underperformed by Sh100 billion in the first five months of the financial year to July amid the coronavirus-related disruptions.

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by Aly Khan Satchu (www.rich.co.ke)
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January 2021

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