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Satchu's Rich Wrap-Up
Tuesday 15th of March 2022

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14-FEB-2022 :: Its a Wizard of Oz moment
World Of Finance

This is ‘’Voodoo Economics’’ and we have reached the point when the curtain was lifted in the Wizard of Oz and the Wizard revealed to be ‘’an ordinary conman from Omaha who has been using elaborate magic tricks and props to make himself seem “great and powerful”’’ 

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14-FEB-2022 : Friday's action and next immediate sessions might afford us the greatest macro trading opportunity to reset shorts in the US 10 and Ultra Bond.
World Of Finance

We can look across all G7 Bonds because this is a Super Bubble that is going to burst big. There is no way out now.
There is no training – classroom or otherwise.. that can prepare for trading the last third of a move, whether it's the end of a bull market or the end of a bear market. 
There's typically no logic to it; irrationality reigns supreme, and no class can teach what to do during that brief, volatile reign. Paul Tudor-Jones

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Revelation 6:12-13:

When he opened the sixth seal, I looked, and behold, there was a great earth- quake, and the sun became black as sackcloth, the full moon became like blood, and the stars of the sky fell to the earth as the fig tree sheds its winter fruit when shaken by a gale.

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Tiny Galaxies Reveal Secrets of Supermassive Black Holes @QuantaMagazine @walkingthedot

In 2008, Marta Volonteri helped develop a radical proposal: Astronomers should search the smallest of galaxies for colossal black holes — hulking behemoths weighing many thousands of solar masses. If they could find them, she reasoned, the objects could teach us how the universe’s very first black holes formed.

The only problem was that big black holes weren’t supposed to exist in little galaxies. Shrimpy “dwarf” galaxies seemed to lack the gravitational muscle needed to pack enough mass into one black hole. To many researchers, it sounded as if Volonteri and her collaborators were suggesting the astrophysical equivalent of finding a brontosaurus in a bathtub.

“Black holes in dwarf galaxies were not conceivable,” said Volonteri, now at the CNRS Institute of Astrophysics in Paris.

Then astronomers started finding the beasts. In recent years, powerful telescopes and innovative observational strategies have allowed researchers to more closely scrutinize dwarf galaxies. When they do, black holes pop up. The discoveries highlight how little astrophysicists know about what types of black holes inhabit the universe, and the challenges theorists face in explaining where they all came from. An increasingly accurate tally may help to finally explain the universe’s earliest, and biggest, black holes.

“People keep finding more of them,” said Ryan Hickox, an astronomer at Dartmouth College who recently helped locate one himself. “There may be a lot more of these things in these galaxies than we could find using the traditional techniques.”

Dwarf galaxies are relatively uncharted astronomical territory. Ten to 100 times lighter than the Milky Way, they lack the gravitational moxie to pull themselves into the tidy round shapes amenable to theorizing. They’re also patchy, dim and generally hard to study in detail. “They’re a total mess,” Volonteri said.

But the tiny tangles of stars harbor secrets that larger galaxies have forgotten. Researchers believe that galaxies like the Milky Way are the patchwork products of more than 10 billion years of mashups, in which galaxies repeatedly smash into their neighbors, growing larger each time. Dwarf galaxies remain small either because they have dodged encounters with other galaxies, or because they formed relatively recently and haven’t had many chances to collide yet. “They are quieter places in the universe,” said Priyamvada Natarajan, an astrophysicist at Yale University who worked with Volonteri on the research (and who is currently a member of this magazine’s advisory board).

In this way, dwarf galaxies resemble the earliest galaxies. Back in the universe’s first billion years, when galaxies were just getting started, they forged the first stars — and the first black holes. Many of those galaxies collided over time, and their black holes merged. Through some mixture of mergers and gobbling up of matter, the first “seed” black holes grew into the monsters boasting billions of solar masses that seem to sit at the heart of every large galaxy today.

But dwarf galaxies haven’t experienced many mergers and tend to have less matter to feed their black holes. These unique conditions would be more likely to freeze black holes in relatively undeveloped, seedlike states, Volonteri and Natarajan reasoned. If, that is, dwarf galaxies had large black holes at all.

Astronomers typically spot actively feeding black holes at the centers of large galaxies by the blindingly bright jets they emit, which drown out the surrounding stars. But at the time of Volonteri and Natarajan’s proposal, researchers hadn’t seen clear signs of such feeding frenzies in dwarf galaxies. Many astronomers questioned the existence of the objects.

Then in 2013, researchers uncovered the mother lode.

Amy Reines, an astrophysicist now at Montana State University, led an analysis of data from the Sloan Digital Sky Survey looking for energetic patterns of visible light typical of feasting black holes. Of the 25,000 or so dwarf galaxies her algorithm scoured, 151 showed signs of hosting growing black holes of hundreds of thousands of solar masses. They were unconfirmed candidates, but their number left little room for doubt: Dwarf galaxies could sculpt massive black holes.

Suddenly, Volonteri’s proposal seemed less radical. “I said, ‘Thanks, Amy. You make me feel like I am a reasonable person,’” she recalled.

A Novel Glow

Now astronomers have come up with fresh ways to find more of these hidden giants.

Mallory Molina, an astronomer collaborating with Reines at Montana State, stumbled onto a new technique by pure luck. While trying to confirm one of Reines’ candidates from a radio survey, Molina noticed a particular orange glow. The radiation was a tell-tale sign of iron atoms that had been so battered that they lost nine electrons — the so-called “Fe X” (or “Iron 10”) line. The researchers checked another candidate and found the same trait. While neither object had the traditional appearance of a feeding black hole, it was hard to imagine what else could be doing such violence to iron atoms.

Molina wrote code to search through about 46,000 dwarf galaxies observed by the Sloan Digital Sky Survey and found that 81 galaxies glimmered with the faint orange of damaged iron. Molina and their colleagues argue that in these dwarf galaxies, a giant black hole is heating the gas around it enough to blast electrons from their atoms. They published their findings in The Astrophysical Journal in November.

These black holes occupy galaxies beyond the reach of previous surveys, which struggled to pick out the glimmer of active black holes against the dazzling radiance of baby stars. (Molina likens the effort to looking for a flashlight while a spotlight shines into your eyes.) The distinct color of the Fe X line makes large black holes pop out against the background, showing that smaller dwarfs with lots of stellar nurseries can also host giant black holes.

“I’m so glad to see that there are new ways of finding black holes,” said Volonteri, who was not involved in the research. “They’re so faint. That’s why it was so hopeless.”

Space telescopes have also helped reveal hidden black holes. Last year, Hickox and his student Jack Parker reexamined eight relatively nearby edge cases from Reines’ 2013 survey. They aimed NASA’s space-based Chandra X-ray observatory at each dwarf galaxy for about four hours. One of the eight galaxies had a speck at its center that shone brighter with high-energy X-rays than low-energy X-rays, suggesting that the radiation was punching through a dense cloud of gas — just the sort of cloud that could be completely cloaking black holes in more distant galaxies. They described their results at an American Astronomical Society conference in January and are preparing them for publication.

While the results raise the odds that many dwarf galaxies have massive black holes, the fraction that possesses them remains hotly debated. In 2008, astronomers would have said that fraction was near zero. The true number depends on the percentage of black holes that are actively feeding (and therefore shining) and the percentage of bright black holes that are enshrouded by gas and dust. If these percentages are similar to those observed in their supermassive siblings (which is currently a big if), massive black holes could reside in the majority of dwarf galaxies.

“That argument that they’re not that common may be starting to break down,” Hickox said.

The First Black Holes

When Volonteri first urged astronomers to work out how common dwarf-galaxy black holes were in 2008, she did it because the answer might help distinguish between two explanations for a seemingly impossible discovery.

A few years before, the Sloan Digital Sky Survey had seen billion-solar-mass black holes dating back to the universe’s first billion years. Astronomers couldn’t figure out how they had gotten so heavy so quickly. It was like encountering a stand of towering redwoods on a still-smoldering volcanic island. Either they had shot up incredibly fast, or they had come into being already partly grown.

The find stimulated research exploring both possibilities. Some astrophysicists developed theories of extra-gassy environments that would allow small seed black holes — the corpses of the first stars — to experience sustained growth spurts. Others detailed ways in which special circumstances could coax giant balls of gas to skip stardom and collapse directly into a big seed, starting out life as a black hole already weighing thousands of stellar masses.

The big-seed theory gained popularity, in part because dwarf-galaxy black holes seemed so rare, which supported the idea that a special event would be needed to jump-start growth. Now some astronomers are wondering if the spate of new black holes partially revives the notion of small seeds.

“It’s kind of implying that direct collapse may not be the end-all-be-all of how the first generation of black holes formed,” Molina said.

But recent work has complicated the debate. Natarajan has found that the cosmos could make both large and small seeds throughout its history. Nevertheless, she called the new observations “super helpful” for uncovering overlooked groups of black holes that formation theories will need to account for.

“We have an incomplete census of black holes,” she said. “The X-ray stuff is really useful in helping us uncover the obscured population.”

The next big piece of the puzzle will come from the James Webb Space Telescope, which launched in December. The instrument’s keen eyesight should pick out the radiance of black holes from even deeper in the past, giving astronomers a more direct view of what went on in the early universe shortly after the first black hole seeds formed — a perspective some researchers have been anticipating for their entire careers.

In 2003, when Volonteri was finishing her doctorate on theories of black hole formation, her adviser told her that “very soon JWST will fly, and we can prove your theories right or wrong,” Volonteri recalled. “I’ve been very hopeful since then.”

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.@Dimi : The US has told allies that China signalled its willingness to provide military assistance to Russia to support its invasion of Ukraine, according to officials familiar with American diplomatic cables on the exchange.
Law & Politics

The US has told allies that China signalled its willingness to provide military assistance to Russia to support its invasion of Ukraine, according to officials familiar with American diplomatic cables on the exchange.
The cables, which were sent by the US state department to allies in Europe and Asia, did not say whether China had signalled that it would help Russia in the future or if it had already started providing military support. 

Nor did they say at which point in the conflict Beijing appeared open to offering the help.
The Financial Times reported on Sunday that Russia had made the request for assistance at some point after the start of the now three-week invasion.
The Russian offer and Chinese response have sounded alarm bells in the White House. US officials believe China is trying to help Russia while its top officials publicly call for a diplomatic solution to the war.
The Chinese embassy in the US on Sunday said it had no knowledge of any Russian request or positive Chinese response to Moscow. Russia on Monday also denied making any request to China.
A senior US defence official declined to say if China had provided military support after the Russian request, but said the Pentagon was watching the situation “very, very closely”.
“If China does choose to materially support Russia in this war, there will likely be consequences for China,” the defence official said.
The official added: “We have seen China basically give tacit approval to what Russia is doing by refusing to join sanctions, by blaming the west and the United States for assistance that we’re giving Ukraine [and] by claiming they wanted to see a peaceful outcome but essentially doing nothing to achieve it.”
Jake Sullivan, US national security adviser, is expected to raise the issue in Rome today in a meeting with Yang Jiechi, China’s top foreign policy official. 

Before departing Washington on Sunday, Sullivan said he would warn the Chinese not to attempt to “bail out” Russia, including helping it survive the tough sanctions from the west.
“We will ensure that neither China, nor anyone else, can compensate Russia for these losses,” Sullivan told NBC television on Sunday. 

“In terms of the specific means of doing that, again, I’m not going to lay all of that out in public, but we will communicate that privately to China.”
Ahead of the meeting between Sullivan and Yang, the Biden administration last week asked European allies to amplify their message to China that Beijing should not help Russia circumvent sanctions, according to one European official.
China has portrayed itself as a neutral actor despite its increasingly close ties to Moscow. But Chinese media and diplomats have offered support for Russia’s justification for the invasion and blamed the US and Nato for the conflict.
Chinese media have also repeated unsubstantiated Russian claims that the US helped Ukraine build biological weapons labs.
Beijing and Moscow have grown closer in recent years, largely due to their shared distain for the US and western military alliances such as Nato. 

Last month, Chinese president Xi Jinping and Russian president Vladimir Putin signed a joint statement in Beijing that described their increasingly close partnership as having “no limits”.
Evan Medeiros, a China expert at Georgetown University and former top White House Asia advisor, said it would be “deeply worrisome” if China transferred weapons to Russia.
“It would be a game changer for global geopolitics,” Medeiros said. “We risk going back to the days of the Sino-Soviet alliance of the 1950s. Ukraine may become the first proxy conflict in a new Cold War.”

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Only the braindead believe an amateur like Jake Sullivan will tell Yang Jiechi anything he doesn't already know today in Rome. @RealPepeEscobar
Law & Politics

China won't "mediate" between Russia and Ukraine. They know the 404 disaster is a US project.

The ONLY negotiation is between Moscow-Washington.

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Why the West May Have to Offer Putin a Way Out @TheAtlantic @TomMcTague
Law & Politics

Across the west there is a sense that Vladimir Putin not only must be stopped from colonizing Ukraine but should be punished for his barbarism as well. It is a question of natural justice. But Western leaders also face a second imperative. The frightening reality is that we are closer to nuclear war than at any time since the 1962 Cuban missile crisis. And in some ways, the risk of the current crisis spiraling out of control is even greater than that faced by John F. Kennedy and Nikita Khrushchev. Unlike in 1962, a hot war is already raging over territory that one side considers important to its national interest, and the other knows is necessary to its national survival. The war, in other words, has become a zero-sum conflict, even though on no reasonable basis can Putin’s belief in Ukraine as a threat to Russia’s security be seen as valid.

What makes this situation even more dangerous is that Ukraine is (legitimately and sensibly) being armed and supplied by the very military alliance Russia most fears, NATOMeanwhile, Russia is being squeezed by an ever-tightening economic blockade designed to force its defeat. On top of all this are credible claims that if this campaign ends in humiliating defeat for Russia, it will prove terminal for not only the country’s national prestige and power, but Putin’s regime itself.

When a gambler has already lost so much that he will go bankrupt unless he can turn it around, the logical thing for him to do is to continue upping the stakes. This is the desperate opponent the West may now face. Worse: This is the opponent whose bloodstained debts the West may have to to write off.

Britain’s defense secretary has said that Putin “is a spent force in the world.” His French counterpart has declared, “Ukraine will win.” A consensus is building in Western capitals that Russia’s calamitous handling of the conflict means it may already have lost—indeed, that its political goals may never have been realizable in the first place, given the size of Ukraine and the opposition of its people to Russian control.

These statements, however, exhibit a dangerous combination of escalation, wish fulfillment, and, most worrying of all, truth.

In Western capitals, there has been an escalation both in the official response to Russia’s invasion—the scale of the sanctions and military support, for example—and in the rhetorical denouncement of the regime. This is understandable and long overdue. Putin appears to preside over something like a Mafia state: corrupt, kleptocratic, and violent, based on networks of loyalty and territorial claims that have nothing to do with popular will and that must be opposed.

But Western leaders should also recognize the dangers of talking themselves into an even worse situation than already exists, and must be clear about their goals. Do they seek a way to end the conflict, or Russia’s defeat? Perhaps these are now one and the same, but the difference may well become important.

Boris Johnson, for example, has said that Putin’s act of aggression “must fail and be seen to fail.” This is both true and problematic. It is important for Western security that the aspiring Putins of this world understand that if they try something akin to invading Ukraine, they will be crushed and humiliated, as is happening to Russia. The conundrum, however, is that it would also be easier for Putin to retreat if he has a way of claiming he has not failed. Analysts and diplomats that I spoke with said it is possible to defeat Putin while finding a message that Putin can tout as a victory at home. But the fact that the West might need to give him something to sell weakens its ability to sell its own victory.

Another problem is that wars change things. The only realistic diplomatic solution is some kind of reassertion of the status quo that existed before the war, coupled with diplomatic assurances for both sides. But why should Ukraine accept the status quo given what it has been through, and how could Putin do likewise given the price he has already paid? Ukraine has now applied for European Union membership and is even more legitimate in its desire to join NATO. Its population appears to have united in adversity, to have found its voice as a European nation-state. The status quo that Putin found so intolerable before may not be possible to resuscitate—because he killed it.

The second element of the Western response that risks making peace even harder to achieve is wish fulfillment. Western officials are strengthening their rhetoric and support for Ukraine out of moral and geopolitical solidarity, but also because of Ukraine’s early success in resisting the Russian attack. The longer Ukraine holds out, the more the West might believe that something greater than the status quo is possible: that Putin and his regime might not survive the crisis they have brought about. If the West begins to see a future that is better than the status quo, or realizes that public opinion at home will not allow a return to “normal” relations with Russia, it will limit close options for a diplomatic solution.

There is a danger, however, in translating Russian difficulties in the early stages of the war into wider assumptions about the state’s sclerosis—that Moscow’s military is not up to the job, that its struggles in Ukraine reveal a system riddled with corruption, that Putin is a paper tiger, that the regime in Moscow will soon fall. Chinese authoritarianism survived Tiananmen Square, Iranian theocracy survived years of Western sanctions, and, most recently, Bashar al-Assad survived the Syrian civil war.

But what is potentially even more frightening than misplaced wishful thinking is the third element: truth. It is possible that Putin’s regime really is as weak as people suggest. Some long-time Russia analysts not prone to hyperbole believe it might collapse as a result of this crisis. “For the first time in 20 years looking at this regime, I’m really questioning [it],” Michael Kofman, the director of Russia studies at the CNA think tank, told the War on the Rocks podcast. This must be a good thing, right? Not necessarily. Kofman was also worried about what might come next if Putin’s regime does fall. “I’m not saying it’s going to be replaced by something better,” he said. “If you don’t like the authoritarian system now, you may not like the authoritarian system that comes later.”

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The West Needs an Off-Ramp From Sanctions, Too @markets @johnauthers
Law & Politics

Excluding Russia from the global financial infrastructure promises to create stress for the rest of the world, whatever its effects on Moscow. 

The most dramatic effects are on the strategically important metal nickel. 

Sanctions have led to a halt in trading of shares in Norilsk Nickel, Russia’s biggest producer, on the London markets after a dramatic fall. 

Less predictable was that trading in nickel futures on the London Metals Exchange also halted, after the interruption to  supply spurred a price spike for the ages:
None of this should surprise anyone who understands the interaction of supply and demand. 

Russia is a huge producer of nickel; if the West is seriously going to bar trading in its biggest nickel-producing company and choke off imports, naturally that will mean the shares become uninvestable, while the cost of the metal will go up, a lot.
That poses at least two tests for the western infrastructure, one of which already seems to have been failed. Shocks like this will cause dramatic market moves. There will be big losses and gains for different people. 

The more liquid and efficient the market, the better it will be able to set a viable clearing price. But after an epic short squeeze last week, the LME halted trading, and is yet to reopen it. 
There’s been plenty of great commentary on this incident, which is potentially very damaging for London’s status as a financial center — a status that in any case is imperiled by the need to eschew money from the wealthy Russians who have been pouring it into the British capital ever since the fall of communism. My Bloomberg Opinion colleague Javier Blas describes London as the “Wild West of Metals,” and points out that the problem was not so much that the LME stopped trading as that it stopped trading too late, and then canceled trades that had been made overnight. He said:
Things got weird. The more the traders bought, the more they pushed the price higher in a self-feeding frenzy. Nickel prices jumped 90% on Monday, the biggest ever one-day jump. Despite clear signs of stress, the LME decided to re-open in the early hours of Tuesday. But the short-squeeze got worse overnight in London and prices climbed much higher. At one point, they hit an all-time high of $101,365 per metric ton, up from $20,175 a ton in January. At 8:15 a.m. in London, the LME finally closed the nickel market. By then, commodities traders had been busy betting billions of dollars in nickel and other cross-commodity deals. The LME also decided to cancel all the overnight transactions, which made a farce of its principles of free-and-fair trading.
The exchange should have shut down at the end of Monday — and the U.K. regulator, the Financial Conduct Authority, should have insisted on it. 

The LME needs to own that it created a problem with its decision to allow trading to continue. 

Hundreds of millions of dollars in profits – and losses – have now vanished because it has scrapped the overnight trades. Why did it do that? No one seems to know.
For more excellent commentary on this, try pieces by former colleagues James Mackintosh of the Wall Street Journal, and Helen Thomas and Philip Stafford and Robin Wigglesworth of the Financial Times, who found a trader who re-named the LME the “Soviet Metals Exchange.” For an altogether saltier summary of how the LME has behaved, go to the Twitter account of Cliff Asness, founder of the AQR hedge fund group. His most apposite tweet reads as follows:
And the cheaters win. ⁦@LME_news please note, I’m accusing you of reversing trades to save your favored cronies and robbing your non-crony customers. Everyone who trades should know what you did. You got lawyers, I’m ready. Bring it slime balls
It’s not great news for a financial exchange when a billionaire hedge fund manager says things like this about them in public. 
But beyond the stress on western financial infrastructure, and the problem of how to wean away from the huge flows of money emanating from natural resources from places run by unsavory regimes, there is a longer-term problem. 

We could actually use some nickel. Restricting its supply and upping the price is going to be an issue. That is particularly true for companies that rely on batteries, for which nickel is vital. 

Tesla Inc. is the most famous, but there are others. Evasive action includes switching to batteries that don’t need so much nickel, which could lead to other engineering and design issues, or finding another supplier outside Russia. 

That’s a problem, because the most obvious candidate is in China, which presents geopolitical complications of its own. Others are in countries where western companies lack firm relationships, such as Tanzania. 
A further problem is that it will probably be the market that passes judgment, and that will take time. Diverting resources toward a new commodity can easily cause displacement elsewhere. 

For the perfect example, look at the little-remembered bubble in ethanol prices in 2006, when it was thought to be the most exciting renewable fuel. 

That sparked farmers to shift production from soybeans to the corn needed for making ethanol — and pushed up the price of soybeans to intolerable levels:
The market effectively worked out that ethanol was not, after all, the answer to energy problems. But a lot of money was lost and made while that was being worked out. 

We can expect something very similar if it turns out that the West will continue its boycott of Russian resources for a long time.

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#Zoltan Night time sneak attack. via @TheBondFreak [simply outstanding long read]
World Of Finance

We are witnessing the birth of Bretton Woods III – a new world (monetary) order centered around commodity-based currencies in the East that will likely weaken the Eurodollar system and also contribute to inflationary forces in the West.

A crisis is unfolding. A crisis of commodities. Commodities are collateral, and collateral is money, and this crisis is about the rising allure of outside money over inside money. 


Bretton Woods II was built on inside money, and its foundations crumbled a week ago when the G7 seized Russia’s FX reserves...
The beautiful paradox of linear rates (the stuff you trade and I write about) is that you need to think linear to find relative value most of the time, but you have to think non-linear to recognize and survive regime shifts. 
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Currency Markets at a Glance WSJ
World Currencies

Euro 1.097285
Dollar Index 98.88
Japan Yen 118.09
Swiss Franc 0.9400
Pound 1.3037
Aussie 0.7169
India Rupee 76.468
South Korea Won 1124.195
Brazil Real 5.1231
Egypt Pound 15.7151
South Africa Rand 15.14385

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Ukraine’s Lost Harvest The West Needs an Off-Ramp From Sanctions, Too @markets @johnauthers [continued]
World Of Finance

I have read many moving and troubling pieces of prose about Ukraine in the last few days. I’m sure we all have. 

One that I found particularly moving was written for The Guardian by Andrey Kurkov, a Ukrainian from Kyiv who laments the way his beloved local bakery has been destroyed. These lines are the most relevant:

Ukraine is the land of bread and wheat. Even in Egypt, bread and cakes are baked using Ukrainian flour. It’s the time of year to prepare the fields for sowing, but this work is not being done. The soil of the wheat fields is full of metal – fragments of shells, pieces of blown-up tanks and cars, the remains of downed planes and helicopters. And it’s all covered in blood.

Putting aside the poetic and emotive language, the important message is that the Ukrainian conflict is already bound to have long-term consequences, whatever its ultimate resolution. 

There are plenty of different scenarios out there, from Vladimir Putin finding a formula that can justify suing for peace, through to the notion that the Russian army will lose outright and fail to take Kyiv, to the terrifying notion that the Russian president resorts to chemical or even nuclear weapons. From the safety of New York, the most likely option still appears that Russia gains “victory” in the sense of taking Kyiv and deposing President Volodymyr Zelinskiy, but only at massive cost, and then must deal with a persistent insurgency. Disturbingly, if that is the outcome, it’s hard to see how any of the western countries and companies that have imposed sanctions could justify lifting them. It’s a situation that directly implies a drawn-out economic cold war. 

But Ukraine’s most important role in the world economy is as its foremost breadbasket. Whatever the military and political scenarios, it seems certain that that’s going to be compromised, at least for this year. 

There are important implications for food prices, which are already roiling global markets. This is what has happened to wheat futures:

Food prices were already steadily increasing before the shock of the invasion. The United Nations’ food and agriculture world food price index has now topped its previous high from the last commodity bull market in 2011. As it seems quite possible that this spike has a way to go, and could be sustained if there’s a lengthy interruption to supply, that is very disquieting. Meanwhile, for those who are looking for beneficiaries, try The Mosaic Co., the world’s largest fertilizer group, which has surged this year but remains far below its levels from the last food price spike:
This isn’t just about Mosaic. This chart shows how the world’s three largest fertilizer stocks have fared compared to MSCI’s All-World index:
Nobody should ignore the effects of the Ukrainian situation on oil, but the impact of the crisis on fertilizers has so far been at least as dramatic:
What could be the knock-on effects? Food price inflation can break the back of the world’s poorest. It’s a terrifying idea. That led me last week to suggest that food price inflation portended upheaval and civil unrest in the emerging world, citing the well-known example of the 2011 Arab Spring revolts, which started in Tunisia just as food prices peaked. That prompted Charlie Robertson of Renaissance Capital to show me the research he published last year that demonstrated this to be something of an urban myth:
The data do not support the view that food prices lead to political regime change, despite Marie Antoinette and Russia’s 1917 inflation. This was surprising enough to force me to check Tunisia’s inflation rate in January 2011. Food prices were up just 1% YoY. There is a 92.3% chance of a regime remaining stable in any given year, or an identical 92.3% if average inflation rises (or falls) in that year.
This seems surprising at first, but the point is subtle. Inflation obviously signals serious trouble for individual politicians, but it doesn’t generally bring about wholesale regime change. If a country was autocratic before it let food inflation get out of hand, it will tend to be autocratic afterward, albeit perhaps with a different autocrat in charge. As Robertson put it to me in an e-mail: 
Leaders can change – Imran Khan [Pakistan’s prime minister and former national cricket captain] may lose his job because of inflation in the next few weeks. It’s just that political regime types don’t change – with 150% inflation the autocratic Tsar is swiftly replaced by the autocratic Bolsheviks. Or Marie Antoinette is swiftly replaced by the French terror.  Tunisia’s shift from autocracy to democracy was a regime-type change – but not triggered by food prices – fundamentally triggered by its per capita GDP getting to the level at which middle classes say “that’s enough stealing of my taxes, give me a vote.
These findings will be put to a further stress test if the sanctions drag on. Rather than toppling regimes, the pain of food inflation might yet lead to pressure to desist from sanctioning Russia. 

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National Bank of #Ethiopia publishes Q1 2021/22 report with fiscal data for end 2020/21. High #defence expenditure in FY20/21 (double the initial budget, 6% of total expenditure), @PatrickHeinisc1

Turning and turning in the widening gyre

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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Millers are now paying Sh57,000 for a tonne of wheat landed in Mombasa from Sh45,600 in January, representing a 25 percent jump.
Kenyan Economy

“The cost of wheat has now become uncertain as it keeps on rising every day. The cost of replacing the stocks that we have at the moment is way too high,” said Rajan Shah, chief executive officer of Capwell Industries.
A two-kilo packet of Ajab, has shot from Sh157 last week to retail at Sh168 currently. Pembe and Exe for the same quantity are selling at Sh168 and Sh161 respectively.

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@AbsaKenya reports FY 2021 EPS +159.74% Earnings here
N.S.E Equities - Finance & Investment

Par Value:                  2/-
Closing Price:           12.15
Total Shares Issued:          5431536000.00
Market Capitalization:        65,993,162,400
EPS:               2.00
PE:                 6.075

ABSA Kenya Group reports FY 2021 Earnings versus FY 2020

FY Total Assets 428.689603b versus 379.440676b

FY Kenya Government Securities [Held for dealing purposes] 44.195668b versus 36.375211b

FY Kenya Government Securities [FVOCI] 88.380436b versus 89.681995b

FY Loans and Advances to Customers [Net] 234.234076b versus 208.854694b

FY Customer Deposits 268.716653b versus 253.630105b

FY Total Interest Income 32.038310b versus 31.440093b

FY Total Interest Expenses 6.781398b versus 8.058839b

FY Net Interest Income 25.256912b 23.381254b

FY Total Non Interest Income 11.664530b versus 11.140304b

FY Total Operating Income 36.921442b versus 34.521558b

FY Loan Loss Provision 4.709210b versus 9.026772b

FY Staff Costs 9.434639b versus 9.761649b

FY Other Operating Expenses 6.076620b versus 5.215105b

FY Total Operating Expenses 21.372488b versus 25.673338b

FY Profit Before Tax 15.548954b versus 5.646233b

FY Profit After Tax 10.869969b versus 4.162009b

FY EPS 2.00 versus 0.77 +159.74% 

FY Dividend 1.10 a share  


9.05% dividend Yield.

a very shapely Year on Year Acceleration.

The Question for ABSA and other Banks is now how that Trajectory evolves in 2022

read more

by Aly Khan Satchu (www.rich.co.ke)
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March 2022

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