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Satchu's Rich Wrap-Up
Thursday 16th of September 2021

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China's debt bomb is ticking faster and Evergrande is just part of a much bigger problem. @TaviCosta
World Of Finance

In my opinion, the PBOC will be forced to act and a currency devaluation is the next macro development to unfold.

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Roberto Bolaño, The Savage Detectives

’m not really sure what visceral realism is I registered for Julio César Álamo’s poetry workshop in the literature department, and that was how I met the visceral realists, or viscerealists or even vicerealists, as they sometimes like to call themselves.

When I came out of the toilets, the light of the bar hurt my eyes. Everybody was talking at the top of their lungs. Some people were singing along to the blind man’s song, a bolero, or what sounded to me like a bolero, about a desperate love, a love that time could never heal, although with the passage of the years it became more humiliating, more pathetic, more terrible. 

Lima and Belano were carrying three books apiece, and they looked like students, like me. 

Before we left, we went up to the bar, shoulder to shoulder, and ordered three tequilas which we downed in a single gulp, and then we went out into the street, laughing. 

“But I thought you were part of the group. The movement, I mean.”

“Are you kidding? Maybe if they’d chosen a less disgusting name…I’m a vegetarian. Anything to do with viscera makes me sick.”

Her mother talked about vague things that I can hardly remember: I think she mentioned a séance in Coyoacán that she’d been to recently, and the restless spirit of a 1940s rancheras singer. I couldn’t tell whether she was joking or not.

So I slipped toward the door, silently thanking Jorgito for giving me a place to sleep. So long, cuñado! I thought (from the Latin cognatus, cognati: brother-in-law), and steeling myself with the word, I slid catlike out of the room down a hallway as dark as the blackest night, or like a movie theater full of staring eyes, where everything had gone pop, and felt my way along the wall until, after an ordeal too long and nerve-racking to describe in detail (plus I hate details), 

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"The Strategy of Denial" by @ElbridgeColby AMERICAN DEFENSE IN AN AGE OF GREAT POWER CONFLICT @diplocourier @Joshuachuminski
Law & Politics

As the War on Terror draws to a close, or at least reduces in prominence, the Pentagon is rightly continuing its pivot toward the next, and some would argue, already present, threat—Beijing. 

Yet, much of the discussion in Washington and further afield on China’s rise have fixated on either-or propositions—China is a threat or it is not. China will act out militarily, or it will not. Accommodation with China is possible, or it is not.
This binary discussion is, however, insufficient to base a defense strategy upon

What does limited war look like? How should we prepare for potential conflict with China? 

It is not a book about navel gazing as to whether something would happen, but rather about the necessity to prepare for the possibility that something could happen.
Colby’s aim then is not to define the kit and tactics necessary to defeat China’s hegemonic ambitions, but to create a framework for thinking about confronting Beijing, denying its hegemonic ambitions, and building a coalition of anti-hegemonic states in Asia and to a lesser degree further afield. 

In this, Colby is supremely successful. He presents a well-argued, well-thought out case for why the United States should care about Beijing’s aggression in the Indo-Pacific region, why the United States needs to be the external cornerstone of the anti-hegemonic alliance, 

and how a limited war with China could play out in the event China’s ambitions go kinetic e.g. seizing Taiwan or the Philippines. 

“The Strategy of Denial” is a return to real raw power calculus and that too is refreshing, and one suspects that this will be as welcome in Taipei, Tokyo, or Canberra.
In Colby’s view, China seeks to become the hegemonic power in Asia, a development that would be destabilizing to both the region and the world. 

To counter this, an anti-hegemonic alliance is necessary, but the countries in the region have insufficient power to withstand China’s weight alone. 

This then demands an external cornerstone force that is invested in the region and its stability, but not interested in dominating—this is the United States. 

Washington must play the lead role, maintain its credibility, and assemble and lead the coalition.
The alliance—however informal—must weigh the addition of individual members to ensure that they are defensible and add value to the alliance, thus maintaining a sufficiently strong defense perimeter: extending it too far or to indefensible positions risks America’s credibility. 

The anti-hegemonic alliance must then prepare to counter China’s best strategy. 

In Colby’s view, this is a limited war in which Beijing seeks to secure a fait accompli conquest of Taiwan or perhaps Luzon in the Philippines. 

In preparing to defend against this—the strategy of denial—the alliance will be well placed to counter other contingencies that could arise. 

It is worth noting that this strategy is fundamentally defensive in nature—it seeks neither to permanently seize Chinese territory nor unseat the Chinese Communist Party in Colby’s telling.
One imagines that this book, properly distilled, could be turned into a straight-forward (if much maligned) PowerPoint presentation or in the hands of the Marine Corps’ Krulak Center, a comic book that lays out the argument. 

Yet, as Clausewitz wrote, “Everything is very simple in war, but the simplest thing is difficult. These difficulties accumulate and produce a friction, which no man can imagine exactly who has not seen war.” 

True, Colby does present the “best strategy” for Beijing in seeking to secure a fait accompli in its conquest of Taiwan, should it choose to do so, but it risks mirror-imaging—we think this is the best strategy, but is it the best strategy from Beijing’s view point? 

That is unclear and perhaps unknowable. Here, Colby’s book is best paired with Rush Doshi’s “The Long Game” which explores China’s grand strategy and dives into the execution of this strategy in the military, political, and economic spheres.
Yet, war is by definition a very human, and often illogical, enterprise from the leadership in both Washington and Beijing and the grunt on-the-ground from the Marines and Army, and the People’s Liberation Army and Navy. 

We can assume that Beijing will avoid horizontal or vertical escalation because of the reasons Colby outlines, but it is by no means guaranteed that with honor, prestige, or national interest on the line that General Secretary Xi Jinping will act in a logical way, or for that matter will President Joseph Biden. 

Does the administration have the fortitude (or the right team in place) necessary to assemble and guide a coalition in the event that China does indeed invade Taiwan? 

Will General Secretary Xi see counter-invasion denial operations on mainland China as an existential threat? 

Will President Biden be able to convince the American people of the importance of intervening in Asia in a post-Afghanistan world? 

These answers require deep insights into ever-changing human psychology during a crisis. 

Admiral James Stavridis and Elliot Ackerman capture this critically important human dimension brilliantly in their fictional account of a war between the United States and Beijing in “2034”.
Here, then, taken together the risk of miscalculation in any war with China, limited or otherwise, is significant. 

In a briefing on China’s space doctrine, a noted expert recalled how in a Track II discussion, the Chinese representative remarked how the PLA may consider a blinding attack against an early warning satellite as a warning signal to the United States. 

The American representative said that would not be seen as a warning, but an act of war as that satellite network is for nuclear command, control, and early warning. 

Clearly a miscommunication that could lead to significant escalation and defining the parameters of any engagement is of the utmost importance, something Colby does explore.
In an era where snark and pith reigns supreme, too often defense issues are watered down to “bomb them to the stone age” or “when I was in the [insert service]…” or some other simplistic nonsense. 

Colby and “The Strategy of Denial” are the antithesis of this trend and that is most welcome. 

Defense policy and military strategy are the highest and most consequential of the policy arts—it is literally life and death. 

To reduce them down to 240 characters, or to present it in meme format (amusing though those can be) is a disservice to the gravity of the subject at hand and those who serve in uniform. 

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19-JUL-2021 :: COVID-19

The Virus remains unresolved.

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With nearly 4 million new cases reported globally in past week (6-12 September), this represents first substantial decline in weekly cases in more than two months Weekly epidemiological update on COVID-19 - 14 September 2021 @WHO

All regions reported declines in new cases as compared to the previous week. 

The number of deaths reported globally in the past week also decreased as compared to the previous week, with just over 62 000 new deaths. 

The African Region reported an increase in the number of weekly deaths (7%), while the South-East Asia Region reported the largest decrease (20%). 

The American and Eastern Mediterranean Regions reported slightly smaller decreases, 9% and 6% respectively, while the numbers of deaths reported in the European and the Western Pacific Regions were similar to last week. 

The cumulative number of cases reported globally is now over 224 million and the cumulative number of deaths is just over 4.6 million.

The regions reporting the highest weekly incidence rates per 100 000 population of cases and of deaths remain the same as in the previous week: 

the Region of the Americas (143 new cases per 100 000 population; 2.3 deaths per 100 000 population) 

European Region (119.4 new cases per 100 000 population; 1.5 deaths per 100 000 population).
The highest numbers of new cases were reported from 

United States of America (1 034 836 new cases; 20% decrease)

United Kingdom (256 051 new cases; 5% increase)

India (248 248 new cases; 15% decrease), 

Islamic Republic of Iran (172 030 new cases; 17% decrease)

Turkey (158 236 new cases; 6% increase).

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23-AUG-2021 :: But Holmes was startled. “This virus has gone up three notches in effectively a year and that, I think, was the biggest surprise to me”

But Holmes was startled. “This virus has gone up three notches in effectively a year and that, I think, was the biggest surprise to me”
The 1918–19 influenza pandemic also appears to have caused more serious illness as time went on, says Lone Simonsen, an epidemiologist at Roskilde University who studies past pandemics.

 “Our data from Denmark suggests it was six times deadlier in the second wave.”

“Many still see Alpha and Delta as being as bad as things are ever going to get,” he says. 

“It would be wise to consider them as steps on a possible trajectory that may challenge our public health response further.”
Some dangerous variants may only be possible if the virus hits on a very rare, winning combination of mutations, Eugene Koonin told me. 

“But with all these millions of infected people, it may very well find that combination.” @kakape 

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Rapid and parallel adaptive mutations in spike S1 drive clade success in SARS-CoV-2

We find that spike S1 is a focal point of adaptive evolution, but also identify positively-selected mutations in other genes that are sculpting the evolutionary trajectory of SARS-CoV-2. 

Protein-coding mutations in S1 are temporally-clustered and, in 2021, the ratio of nonsynonymous to synonymous divergence in S1 is more than 4 times greater than in the equivalent influenza HA1 subunit.

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Figure 1. Accumulation of nonsynonymous S1 mutations is correlated with clade success.

A) For every clade in the phylogeny, mutations relative to the root of the phylogeny are tallied and plotted against the date of the base of that clade. 

Nonsynonymous S1, synonymous S1, and nonsynonymous RdRp mutations are plotted separately. 

Nonsynonymous mutations include nonsynonymous SNPs and deletions. 

The primary axis (left, black ticks) displays mutations per codon, and the secondary axis (right, gray ticks) shows the absolute number of mutations accumulated in each clade. 

Each point is colored according to the lineage it belongs to. 

Points are fit by linear regression. B) For every clade, mutation accumulation (as in A) is plotted against logistic growth rate and the points are fit by linear regression. C) The correlation coefficient r between mutation accumulation and logistic growth rate is compared to an expected distribution to yield a p-value. 

Expected values of r are determined from randomizing mutations across the phylogeny using a multinomial draw with mutation likelihood proportional to relative branch length. The results of 1000 iterations are shown.

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Figure 2. Ratio of nonsynonymous to synonymous divergence is highest S1.

The ratio of nonsynonymous to synonymous divergence within various coding regions is plotted over time. 

Each point shows the mean and 95% confidence interval of this ratio for all isolates present in a 0.2 year window (ending at the date indicated on the x-axis). 

Nonsynonymous divergence is calculated as the nonsynonymous Hamming distance between the sequence of an isolate and the root, normalized by the total possible number of nonsynonymous sites. 

The same is done for synonymous divergence. 

Divergence is calculated for various loci within the genome.

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01-MAR-2020 :: The Origin of the #CoronaVirus #COVID19

“If they can get you asking the wrong questions, they don't have to worry about answers.”
“There's always more to it. This is what history consists of. It is the sum total of the things they aren't telling us.”

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09-MAY-2021 The Markets The Lotos-eaters
World Of Finance

Ten- year yields initially plunged to a more than two-month low of 1.46%, then reversed to end the day at 1.58%. However, I am resetting my target Yield to 1.25% now.

Given the volume of money Printing and the extraordinary stimulus I have to say that the US Recovery is actually really weak and I believe it will be very short lived and the Penny will drop soon with the Bond Market and the Shorts will be forced to cover.

The Consensus View appears to be that the Global economy is going to accelerate big time and that its going to BOOM!  I beg to differ

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.1804
Dollar Index 92.558
Japan Yen 109.30
Swiss Franc 0.9211
Pound 1.3822
Aussie 0.7319
India Rupee 73.4325
South Korea Won 1171.77
Brazil Real 5.2235
Egypt Pound 15.7097
South Africa Rand 14.50

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“The argument of this book is that we are indeed living through a time of unusually fast change.” @giovfranchi

“The argument of this book is that we are indeed living through a time of unusually fast change - and this change is being brought about by sudden technological advances… they are developing at an exponential pace, getting faster and faster with each passing month.”

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“Today, the gap between the two cultures is wider than ever before…the world of humanities inhabited by most policymakers cannot keep track of what is happening” @giovfranchi

“Many people outside the world of technology make no effort to understand it, nor to develop the right response to it…Today, the gap between the two cultures is wider than ever before…the world of humanities inhabited by most policymakers cannot keep track of what is happening”

“The result is what I call the ‘exponential gap’. The chasm between new forms of technology - along with the fresh approaches to business, work, politics and civil society they bring about - and the corporations, employees, politics and wider social norms that get left behind.”

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The ‘Exponential Age’. @giovfranchi

“It’s a story that starts with computing - but also encompasses energy, biology and manufacturing. The breath of this change means that we have entered a wholly new era of human society and economic organization - what I call the ‘Exponential Age’.”

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“I define an exponential technology as one that can, for a roughly fixed cost, improve at a rate of more than 10 per cent per year for several decades.” @giovfranchi

“I define an exponential technology as one that can, for a roughly fixed cost, improve at a rate of more than 10 per cent per year for several decades… For a technology to be exponential, this change should hold true for decades - and not just be a short-lived trend.”

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“When you’re dealing with exponential technologies, however, the speed of their acceleration up the ‘S’ can be astonishing. The process of market saturation has been getting faster for decades” @giovfranchi

“In general, the S-curve remains accurate. When you’re dealing with exponential technologies, however, the speed of their acceleration up the ‘S’ can be astonishing. The process of market saturation has been getting faster for decades”

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“As one S-curve reaches its steepest gradient, another curve begins… The result is that, across a society, there is a quickening in the pace of technological progression” @giovfranchi
World Of Finance

“As one S-curve reaches its steepest gradient, another curve begins… The result is that, across a society, there is a quickening in the pace of technological progression - even if the development of individual technologies is consistently slowing off.”

“Between 2012 and 2018, the amount of computer power used to train the largest AI models increased about six time faster that the rate of Moore’s Law… The result has been the continued exponential growth of computing power, except free from the shackles of Moore’s Law.”
“And should our new forms of chip eventually prove unsuited to society’s growing demands of computing power, waiting in the wings is a completely novel approach - ‘quantum computing’…This primordial quantum computer was more than 1 billion times faster than its classical rival.”
“The cost of solar power has been declining at exponential rates - about 40 per cent per annum for large commercial contracts… In the decade up to 2019, the price of electricity generated by solar power had declined by 89 per cent.”
“Exponentiality has become widespread in four key domains of technology, which between them form the bedrock of the global economy. Computing, of course, is one. But so too are the domains of energy, biology and manufacturing.”

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“Consider the process of reading the human genome, It puts Moore’s Law to shame… In fact, genome sequencing has fallen 1,000 times further than Moore’s Law would have forecasted.” @giovfranchi

“Consider the process of reading the human genome, the genetic code that underpins each one of us… It puts Moore’s Law to shame… In fact, genome sequencing has fallen 1,000 times further than Moore’s Law would have forecasted.”

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Priciest Food Since 1970s Is a Big Challenge for Governments @bpolitics @AggieDeSousa @_jsdiamond

Whether for bread, rice or tortillas, governments across the world know that rising food costs can come with a political price. The dilemma is whether they can do enough to prevent having to pay it.
Global food prices were up 33% in August from a year earlier with vegetable oil, grains and meat on the rise, data from the United Nations Food and Agriculture Organization show. 

And it’s not likely to get better as extreme weather, soaring freight and fertilizer costs, shipping bottlenecks and labor shortages compound the problem. 

Dwindling foreign currency reserves are also hampering the ability of some nations to import food.

From Europe to Turkey and India, politicians are now handing out more aid, ordering sellers to cut prices and tinkering with trade rules to mitigate the impact on consumers.

The issue is more acute in emerging markets where the cost of food accounts for a greater chunk of household spending, and in crisis-hit nations. 

In Lebanon, militant group Hezbollah has tightened its grip on the country by distributing food. 

But even the U.S. is taking action to address affordability made more urgent during the coronavirus pandemic.

“Governments can intervene and commit to supporting lower consumer prices for a while,” said Cullen Hendrix, non-resident senior fellow at the Peterson Institute for International Economics, a Washington-based think tank. “But they can’t do it indefinitely.”

Food inflation spurred more than two dozen riots across Asia, the Middle East and Africa, contributing to the Arab Spring uprisings 10 years ago

Pockets of discontentment are growing again. Unrest in South Africa triggered by the arrest of former President Jacob Zuma in July turned to food as people looted grocery stores and restaurants. 

Shortages in Cuba led to the biggest protests in decades.

Adjusted for inflation and annualized, costs are already higher now than for almost anytime in the past six decades, according FAO data. 

Indeed, it’s now harder to afford food than it was during the 2011 protests in the Middle East that led to the overthrow of leaders in Tunisia, Libya and Egypt, said Alastair Smith, senior teaching fellow in global sustainable development at Warwick University in the U.K.
“Food is more expensive today than it has been for the vast majority of modern recorded history,” he said.

The ground zero for the Arab Spring protests, Tunisia has raw memories when it comes to food and politics. 

Just a few days after dismissing the government and suspending parliament in July, President Kais Saied urged producers and retailers to slash prices of selected produce.

Red meat prices fell by about 10% almost instantly, with the nation’s main business lobby group Utica announcing unspecified cuts in prices for staples ranging from wheat flour, meat, to dairy, coffee and soft drinks. 

Fruit prices fell by as much as 20%, Tunisian media reported. Still, consumer prices overall rose at an annual rate of 6.2% in August.

Then there’s the prospect of subsidy cuts. A debate is raging about a long-planned shift to focus spending on the neediest citizens as Tunisia tries to secure a new financing program from the International Monetary Fund. 

That will likely lead to reduced support for items likes flour and sugar as well as electricity for a substantial number of households.

North African neighbors are also looking at subsidy cuts to help fix public finances. 

In Egypt, President Abdel-Fattah El-Sisi called for a rise in bread prices. 

Algerian bakers have already hiked prices of subsidized bread in an act of defiance amid a shortage of wheat or shrunk the size of loaves. 

In Morocco, authorities announced in July a plan that will see cuts to subsidies on sugar and low-cost wheat flour starting next year, subject to the approval of parliament.

The cost of bread is not just political for grain-importing countries in North Africa and the Middle East. 

Romania is Europe’s top exporter this season, and yet prices have soared at a double-digit pace. 

Overall inflation is set to be the fastest in eight years in 2021.

The former eastern bloc country also has a dark history when it comes to feeding its population. 

Severe shortages were a hallmark of communist dictator Nicolae Ceausescu before he was overthrown and executed in 1989.

Prime Minister Florin Citu’s government wants to cut dependence on imported processed food products as a way to reduce costs and narrow the trade deficit. 

He is already under pressure after the collapse of his coalition and faced a backlash over his answer to a question about the cost of a loaf of bread. “I don’t eat bread,” he answered.
Romania earmarked 760 million euros ($896 million) for investment in farm storage and processing, Agriculture Minister Adrian Oros said. 

“We’re one of the biggest exporters of cereals and yet we import frozen bread products,” he said. 

As of this month, the government is waiting for farmers to submit eligible projects to tap the money over the next two years. 

However, while Romania’s agricultural potential is one of the biggest in Europe, it so far failed to use EU money to improve its local production.
Rich countries are having their headaches too as the pandemic hits incomes. 

In the U.S., the world’s biggest economy, 8.6% of people said they sometimes or often didn’t have enough to eat during the prior week in a survey completed on Aug. 30.

In a reversal from the Donald Trump administration, President Joe Biden is increasing government assistance to low- and middle-income Americans with the biggest long-term rise in food stamp benefits in the program’s history.

The increased dispersal of stamps to buy groceries adds to temporary pandemic measures such as child tax credits and broadened access to school meal programs. 

Critics have said the government subsidy is inadequate though.
The government in Washington has been showing concern about rising consumer prices as the economy rebounds from Covid-19. 

It’s taking aim at major meatpackers, charging that “pandemic profiteering” is squeezing consumers and farmers alike.
With one of the largest malnourished populations, India is also dispersing more aid. 

Prime Minister Narendra Modi’s government is distributing 20.4 million tons of free rice and wheat, spending 672.7 billion rupees ($9.1 billion) on extra grains subsidies to reach potentially more than 800 million people.

The country has also implemented trade measures to shield consumers from spikes in global prices. 

The government has cut duties on palm, soybean and sunflower oils as well as lentils.

India isn’t the only nation to use trade to intervene in the food market. 

War-torn Syria has tightened imports of items ranging from cheese to cashew nuts to safeguard its dwindling foreign currency reserves for wheat purchases. 

Argentina and Bolivia have curbed exports of beef to keep prices at home in check, as has drought-hit Kazakhstan, which forbade exports of oat, rye and forage and added quotas for forage wheat.

In Turkey, President Recep Tayyip Erdogan’s popularity has slumped because of the economy and cost of living. Food inflation accelerated for a fourth month in August, to 29%.

The government is making another attempt to control prices through threats of fines for businesses selling at elevated prices to an investigation into higher costs. 

Trade ministry officials are ordered to inspect allegations of excessive price increases in food products at wholesale markets in major Turkish cities, including Istanbul, Ankara and Izmir.

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Mozambique bread riots may be warning sign on African food security Africa Monitor @csmonitor By Aly-Khan Satchu, September 6, 2010

Global food markets are but the perturbation of a butterflys's wing away from a serious tipping point.
Given the fragility of the food markets, Maputo might well be a shot across the bows of many regimes, who have yet to secure access to sufficient food at sufficiently low prices for their people.
Failure to execute on this front, surely imperils many.

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WHO regional overviews – Epidemiological week 6 – 12 September 2021 African Region

The African Region reported over 94 000 new cases and over 3000 new deaths, a 15% decrease and a 7% increase respectively as compared to the previous week. 

Although the regional case incidence has continued to decline for over two months, weekly incidence increased in 18 of 49 (37%) countries in the past week, including in Ethiopia and Nigeria. 

The highest numbers of new cases were reported from 

South Africa (40 220 new cases; 67.8 new cases per 100 000 population; a 29% decrease), 

Ethiopia (9269 new cases; 8.1 new cases per 100 000; a 10% increase)

Nigeria (5061 new cases; 2.5 new cases per 100 000; a 90% increase).
The highest numbers of new deaths were reported from 

South Africa (1590 new deaths; 2.7 new deaths per 100 000 population; a 6% decrease)

Namibia (187 new deaths; 7.4 new deaths per 100 000)

Algeria (185 new deaths; 0.4 new deaths per 100 000; a 5% decrease).

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No leader has visited Africa as often as Erdogan. 38 trips to 28 countries. Turkey's embassies have jumped 12 → 43. @NikkeiAsia @kenmoriyasu

On Aug. 14, Turkish President Recep Tayyip Erdogan hosted Guinean President Alpha Conde at the hilltop Vahdettin Mansion in Istanbul.
One of the former residences of the last Ottoman sultan is currently used as Erdogan's main office for the Asia side of Turkey's largest city.
Overlooking the blue waters of the Bosphorus Strait that divides the Asian and European continents, the two leaders talked of the possibilities that await the two countries.
Twenty-two days after the meeting, Conde was arrested in a military coup.
Speaking on Sept. 7, two days after the takeover, Turkish Foreign Minister Mevlut Cavusoglu condemned the coup and indirectly accused former colonial powers for being behind the event.

"In the past, the old colonial view had been to exploit African countries. Now they resort to different ways to bring governments they like to power, or to change governments they do not want."

"Get your hands off Africa," Cavusoglu said, before calling on the people of Guinea: "Know the ones who try to support you are those who want to use you."
It was symbolic of Turkey's inroads into Africa -- an effort that has seen the country expand the number of embassies in Africa to 43 from just 12 in 2002.
During his time in power since 2003 -- both as prime minister and president -- Erdogan has visited 28 different African countries for a total of 38 times, making him the most frequent-visiting global leader to the continent.
Calling Turkey "an Afro-Eurasia state," Erdogan has used every tool in his kit to engage with African states. 

In Muslim African countries, Turkey has built mosques. In Northern Africa, Erdogan has used the Ottoman card, talking about the historic ties. 

In countries unhappy with old colonial powers exploiting oil and minerals, Erdogan uses his favorite move: serving as the "voice of the oppressed people."
Turkey's web of relations are not well understood in the West. 

Richard Outzen, a geopolitical consultant and former member of the U.S. State Department's Policy Planning Staff, says that of all the misconceptions in Washington about Turkey, the notion that Ankara is diplomatically isolated is "perhaps the most distorted of all the lenses."
"Turkey actually has a very sophisticated diplomatic approach, and they've worked well in Africa, they've worked well in Asia, they have balanced relations with many countries throughout Central Asia and East Asia. Turkish-Japanese relations are pretty good. They also have a very strong historical relationship with South Korea," he said.
A relatively untapped frontier, Africa provides new markets for Turkish exporters with less rivalry. 

The same goes for Turkey's construction businesses, as Western companies often stay away due to business risks.
Erdogan has spearheaded a coordinated strategy of opening embassies, connecting direct flights and deploying commercial counselors so that businesspeople can make a smooth entry into the new market.
But when it comes to the scale and span of projects in Africa, Turkey is no match for China.
According to Engineering News Record's Top 250 international contractors ranking, based on revenues generated overseas, Turkish contractors ranked third with 40 companies in 2020, after the 41 contractors from the U.S.
The top, by far, is China with 78 companies.

Erdal Eren, chairman of Turkey's Contractors Association, recounted his dealings in Africa and how he has seen, firsthand, China's massive clout.

He recalled a conservation with a leader of a country in the Horn of Africa. When Eren complained that Turkey cannot compete with Chinese prices, 

if it were to maintain the quality standards of the projects, the leader said sternly, "You cannot negatively talk about China in my presence. China is our ally which is giving all kinds of assistance to my country to stand up on its feet."
Eren recalled another example of how China maintains rock-bottom prices.
Several years ago, Eren visited a port in Libya. Two ships that served a Chinese company constructing a road were moored at the port. 

One served as accommodations for Chinese workers -- under tough living conditions -- and the other held vast supplies, including even imported rice from China. The team needed to buy nothing from the local community.
"We cannot compete against such cost advantages," Eren said. "With Chinese state support, they bid very low prices with almost interest-free financing attached to the projects."
For Turkey, the new target is penetration into sub-Saharan Africa, utilizing the newly established embassies, commercial counselors and direct flights.
As of June, Turkish contractors have undertaken 1,666 projects in 43 African countries worth $76 billion since 1972, according to the Ministry of Trade

Sub-Saharan Africa constitutes only 305 projects worth $18.3 billion, with the rest being in North Africa, where Turkey has traditionally had strong ties.
But while sub-Saharan Africa offers potential for Turkey to expand, it is where China has an even greater advantage.
"In sub-Sahara, most countries do not have the oil or gas wealth like North African states and they are short of financial power," Eren said. 

"In that region, we try to push Turkish Eximbank resources but we hit the Great Wall of China."
Turk Eximbank is Turkey's official export credit agency, which helps facilitate trade credit, guarantee and insurance programs. 

However, it is dwarfed by the massive financial capabilities of the Chinese state, which provides support to African countries to build infrastructure without seeking any collaboration from any third country.
But Turkey sees some avenues it can explore to gain ground on Beijing. In July, some 250 Turkish and Angolan businesspeople met for a forum in the Turkish capital of Ankara.
On the sidelines, participants from both countries sounded optimistic. 

"Now that direct flights have started, together with skyrocketing shipping costs from China, we have a chance to compete with Beijing, due to our proximity to Angola," said Abdullah Anil Altunkaya, manager of Turkish machinery producer Samsun Makina.
Meanwhile, a representative of an Angolan law firm that advises foreign investors, said: "Chinese footprint is everywhere in Angola but a lot of the infrastructure that they built, like roads, quickly wore out. Turkish companies with higher quality have a business chance."
A major obstacle for Turkey's ambitious drive is its dwindling financial muscle, which has been hit by a meltdown in local currency lira as well as the pandemic.
Turkey's answer to China may be to team up with partners. "Where we competed and won projects against China, such as in Rwanda, Tanzania and Senegal, Turkish contractors managed to utilize funds from international institutions like the World Bank and the African Investment Bank," Eren said.
Selim Bora, chairman of Turkish construction company Summa, which has completed 20 major projects in Africa ranging from airports to sports centers, noted that Chinese companies recently are showing less appetite for build-operate-transfer (BOT) and public-private-partnership model projects.
African companies prefer these schemes more than state-guaranteed borrowing models, "which brings an advantage for Turkish companies in competition with the Chinese," he said.
Bora said Summa will soon start construction for a new international airport in Khartoum, Sudan, which will be build under a BOT model.

Japan is watching Turkey's advance into Africa closely, hoping to find ways for the two countries to combine their strengths and gain leverage. 

Japan Bank for International Cooperation (JBIC) opened a regional office in Istanbul last year, with a not-so discreet mandate to seek Turkish cooperation in Africa, countering Chinese influence.

"We will show more effort to further develop cooperation between Turkish and Japanese companies in Africa where Turkish companies already have a strong presence," said Suzuki Ryuta, the bank's Istanbul chief representative.
Steelmaker Tosyali Holding, which has a $650 million joint venture with Japanese steel giant Toyo Kohan in Turkey, is the largest Turkish investor in Africa.
In Angola, Tosyali signed an agreement with the government to redevelop the Cassinga mine in the country's south. 

Iron ore extracted from Cassinga will be exported via a terminal being developed by Toyota Tsusho and financed by JBIC and Nippon Export and Investment Insurance.
Turkey's Calik Energy, in which Japanese trading house Mitsubishi Corporation has a stake, has recently completed expanding a small hydropower plant in Malawi with financing from Japan International Cooperation Agency.
Speaking exclusively to Nikkei Asia, Turkey's Foreign Minister Mevlut Cavusoglu last month said, 

"Africa has the youngest population, the most rapid urbanization rate and the most dynamic economies in the world. The continent has big challenges but also great opportunities."
"When we look at Africa, we do not see gold mines or oil fields. We are not competing with anybody. We can work with any country, including China." Cavusgolu told Nikkei.
An embassy is usually followed by a direct flight, and a commercial counselor. 

It all feeds in to a game plan of expanding influence.

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The falcon cannot hear the falconer;

Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere The ceremony of innocence is drowned;
The best lack all conviction, while the worst Are full of passionate intensity.

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November 8, 2020 .@PMEthiopia has launched an unwinnable War on Tigray Province.

Ethiopia which was once the Poster child of the African Renaissance now has a Nobel Prize Winner whom I am reliably informed

PM Abiy His inner war cabinet includes Evangelicals who are counseling him he is "doing Christ's work"; that his faith is being "tested". @RAbdiAnalyst

@PMEthiopia has launched an unwinnable War on Tigray Province.

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February 1st 2021 ‘The genie out of the bottle’ @AfricanBizMag

It’s impossible for the state to manage a guerrilla war up there and at the same time manage to control the rest of the country.

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What is clear is that Abiy’s campaign to centralize power in the capital is in tatters.

With many regions seeking more devolution, the conflict threatens the integrity of the state, according to a key Western diplomat, who asked not to be identified citing the sensitivity of the matter.

Abiy’s authority is at serious risk unless he can find a way to force the Tigrayans back. The Nobel peace prize winner has awakened more enemies than just the TPLF.
“We have one thing in common and that is we are fighting the same enemy,” said Kumsa Diriba, the commander-in-chief of the Oromo Liberation Army.

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Defaulter Zimbabwe Courts Investors With $200 Million Bond Sale @bpolitics

Zimbabwe will seek to raise $200 million in a debut domestic U.S. dollar bond sale on its stock exchange in Victoria Falls that trades exclusively in foreign currency, according to Finance Minister Mthuli Ncube.
“We may have it in small tranches, rather than a single big issuance,” Ncube said in an interview from New York, where he is on a roadshow to attract investment into the southern African nation. “We might put it in $30 million tranches of about six issuances.”
Zimbabwe is targeting a yield of 6% to 9% on the bonds, he said Wednesday on Bloomberg Television. 

Yield-hungry investors in frontier markets are interested in the offering, the minister said.
Earlier this month, Bloomberg reported that the bond sale would be for $100 million. 

In August, Ncube said a debt offering could help meet the cost of a $3.5 billion compensation bill the country is facing after it reached an agreement with White farmers evicted from their land two decades ago.
The so-called “Zimbabwe Global Investor Roadshow” has seen Ncube travel to South Africa and Dubai to court foreign investment. 

In New York, Ncube will also meet with officials from the International Monetary Fund and the World Bank, ahead of an IMF visit to Zimbabwe that’s expected next month.
The government has been building up a track record of repaying its foreign debt by making token payments to creditors including the Paris Club, Ncube said. 

The country defaulted on payments to the World Bank, the IMF and other multilateral lenders two decades ago.
The IMF is expected to make a decision on a new staff-monitored program for Zimbabwe later this year, according to Ncube. 

The IMF in February 2020 abruptly ended the program saying it had “gone off track.”
The Victoria Falls Stock Exchange also known as “VFEX” was launched a year ago and last week signed a pact with the United Arab Emirates to possibly establish a gold exchange. 

Ncube sees the exchange helping “deal with gold smuggling and arbitrage,” as well as advertising Zimbabwe’s mineral resources.
A cryptocurrency listing on the VFEX in future is also a possibility.
“We are trying to figure out how to invest in it as an asset class,” he said. 

The government has no plans to use crypto as a transaction currency, Ncube added.

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The Naira has dropped to 562 Naira to the dollar in the parallel market @MoghaluKingsley

The Naira has dropped to 562 Naira to the dollar in the parallel market, as our public debt hits N34 trillion and President @MBuhari goes a borrowing again via @nassnigeria
Until we make fundamental changes in economic policy, it’s a one way ticket downwards for our economy.

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Central Bank of Kenya governor @njorogep "The total debt service as a proportion of revenue had shot-up to more than 50% in 2019/20, meaning that half of our revenues were going to debt service. Now it has come down to almost 40%" @MwangoCapital
Kenyan Economy

Central Bank of Kenya governor @njorogep "The total debt service as a proportion of revenue had shot-up to more than 50% in 2019/20, meaning that half of our revenues were going to debt service. Now it has come down to almost 40%, but this is something that is quite worrying"

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

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