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Tuesday 12th of April 2022
 
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Africa

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14-FEB-2022 :: the greatest macro trading opportunity to reset shorts in the US 10 and Ultra Bond. We can look across all G7 Bonds because this is a Super Bubble that is going to burst big.
World Of Finance



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. 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.


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Its a Wizard of Oz moment
World Of Finance


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”’’ 

The Curtain has been lifted and Mr. Powell has now arrived at his Volcker moment 

Deutsche Bank's Jim Reid notes that yesterday's surge in the 2-year US Treasury yield was, by one measure, "the biggest "shock" since October 1979 when Volcker announced his intentions on the world @ReutersJamie
The last time inflation was here, February 1982 - the Fed Funds Rate was 15%. @Convertbond
Dartmouth economist and former Fed adviser Andrew Levin says the Fed needs to get rates to a neutral setting within a year or so, and that the means getting the Fed Funds rates up to 4% or 5%

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End of @ecb Bond Purchases Not Priced In, @GoldmanSachs Strategists Say @markets
World Of Finance


The end of European Central Bank corporate bond purchases is not yet priced in to euro investment grade spreads, which could widen by as much as 20 basis points this year, according to Goldman Sachs Group Inc. strategists.
“The ECB’s end of QE will fuel a material increase in the net supply of fixed income securities that will be available to private investors,” Amanda Lynam, senior credit strategist at the U.S. investment bank, said in an interview. “

Prices will need to adjust in order to attract the marginal buyer.”
Spreads for euro investment grade non-financial corporate bonds were at 138 basis points on April 7, a Goldman note shows. 

According to a Bloomberg Barclays index, euro high-grade non-financial bond spreads are quoted at about 131 basis points.

 A rise of 20 basis points would bring them back to near their peak at the start of Russia’s invasion of Ukraine.
The ECB has been buying corporate bonds since 2015 and in 2020 launched a pandemic emergency purchase programme to support companies across the continent and prevent an expected wave of defaults. 

The central bank will slow bond buying to 30 billion euros ($33 billion) in May then 20 billion euros in June and the program could be halted as soon as the third quarter.
“Purchases of high-quality bonds had incentivized investors to rotate into riskier and higher carry assets,” Lynam said. 

“Going forward, the case for being overweight high carry securities has weakened.”

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A REGIME CHANGE IS UNDERWAY [in the markets]
World Of Finance


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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This is a quantum universe,’ said Spike, neither random nor determined. It is potential at every second. All you can do is intervene. @ArtsOfExistence
Misc.

‘What do you suggest I do ― to intervene?’
Spike leaned forward and kissed me. ‘Bend the light.’
― Jeanette Winterson, The Stone Gods

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Blow-Up and Other Stories | Author: Julio Cortazar
Misc.


There’s too much dust in the air, the slightest breeze and it’s back on the marble console tops and in the diamond patterns of the tooled-leather desk set. 

It’s a lot of work to get it off with a feather duster; the motes rise and hang in the air, and settle again a minute later on the pianos and the furniture

I’ll always have a clear memory of it because it happened so simply and without fuss. Irene was knitting in her bedroom, it was eight at night, and I suddenly decided to put the water up for mate. 

I went down the corridor as far as the oak door, which was ajar, then turned into the hall toward the kitchen, when I heard something in the library or the dining room. 

The sound came through muted and indistinct, a chair being knocked over onto the carpet or the muffled buzzing of a conversation. 

At the same time or a second later, I heard it at the end of the passage which led from those two rooms toward the door. 

I hurled myself against the door before it was too late and shut it, leaned on it with the weight of my body; luckily, the key was on our side; moreover, I ran the great bolt into place, just to be safe.

I went down to the kitchen, heated the kettle, and when I got back with the tray of mate, I told Irene:
“I had to shut the door to the passage. They’ve taken over the back part.”
She let her knitting fall and looked at me with her tired, serious eyes.
“You’re sure?”
I nodded.
“In that case,” she said, picking up her needles again, “we’ll have to live on this side.”

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I generally have no optimistic impression that I can report to you from this conversation with President Putin. The offensive (in eastern Ukraine) is evidently being prepared on a massive scale, Nehammer @PriapusIQ
Law & Politics


"I generally have no optimistic impression that I can report to you from this conversation with President Putin. The offensive (in eastern Ukraine) is evidently being prepared on a massive scale," Nehammer told a news conference, after meeting with Putin.

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The madman theory is a political theory commonly associated with U.S. President Richard Nixon's foreign policy.
Law & Politics


In October 1969, the Nixon administration indicated to the Soviet Union that "the madman was loose" when the United States military was ordered to full global war readiness alert (unbeknownst to the majority of the American population), and bombers armed with thermonuclear weapons flew patterns near the Soviet border for three consecutive days.

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While Biden is working to bleed Russia by trapping it in a military quagmire, Putin is seeking to avoid that trap @Chellaney
Law & Politics

While Biden is working to bleed Russia by trapping it in a military quagmire, Putin is seeking to avoid that trap by narrowing Russia's campaign to consolidate war gains in Ukraine's east and south. The next four weeks will be crucial in shaping his strategic buffer against NATO.

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This morning, I had the pleasure of speaking with Ukrainian troops returning home to Ukraine today. I made clear the U.S. will continue to provide them with the assistance they need. @SecDef
Law & Politics


This morning, I had the pleasure of speaking with Ukrainian troops training in the U.S. who are returning home to Ukraine today. Their bravery and skill are amazing. I made clear the U.S. will continue to provide them with the assistance they need.

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That he and the Ukrainians and all of us are stuck in this low simmer. that just goes on and on and on for years. Bill Browder @bopinion @johnauthers
Law & Politics


I think the words of Bill Browder need to be taken very seriously here. 

He is famous as the founder of Hermitage Capital Management, which pioneered investing in post-Soviet Russia, and was forced out of the country and has become an inveterate opponent of Putin. 

Interviewed by DealBook of the New York Times, he was asked to predict the end game in Ukraine. These are the conclusions of their dialogue:
There is no reasonable way for this thing to end. There’s only an unreasonable way.
It’s either he ends up taking over Ukraine and then moving his way toward the Baltic countries to challenge us at NATO — or for him to be defeated by Ukraine and then having the Russian people overthrow him because he was the weak guy who couldn’t beat Ukraine.
How do you handicap those two options?
I think each of those options has a 15 percent probability.
What’s the remaining 70 percent probability?
That he and the Ukrainians and all of us are stuck in this low simmer. It’s not going to be at the same level of awfulness that it is right now, but at this low simmering conflict that just goes on and on and on for years.

This summation seems reasonable. There are chances of seriously terrible and genuinely positive outcomes. But the likelihood is that this turns into something more like World War I, stuck in a stalemate for years. 

The attitude in markets seems to be that this can then be safely ignored, much as the grinding conflict in Afghanistan came to be known as the “Forgotten War.”
The problem with this is that Ukraine is in Europe, bordering the European Union, and is a major supplier of raw materials to the rest of the world. 

This is not like Afghanistan or the many appalling conflicts in sub-Saharan Africa. 

They might be as bad, or even worse, in human terms. But as far as the investment world is concerned, they have nothing like the same impact.

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By insisting payments are made in Russian Rubles for Russian commodities Vladimir Putin has withdrawn that exorbitant privilege. Aly Khan Satchu @SubstackInc
Law & Politics


Russia essentially gave the $ and the Euro the very same exorbitant privilege that King Abdul Aziz Ibn Saud of Saudi Arabia gave President Franklin D Roosevelt aboard the USS Quincy in Great Bitter Lake in February 14, 1945 when the petro dollar economy was symbolically born.

By insisting payments are made in Russian Rubles for Russian commodities Vladimir Putin has withdrawn that exorbitant privilege.
The Russian Ruble rally is real and has much further to go.

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The collapse of the oil price in late 2014 may or may not have been deliberately engineered to make life difficult for Russia @bopinion @johnauthers
Law & Politics


The collapse of the oil price in late 2014 may or may not have been deliberately engineered to make life difficult for Russia, and the current high oil price may or may not have driven Putin’s strategic decisions.

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The fulcrum of multipolarity is not to be found in the bogs and marshes of Ukraine, but in the China-Europe axis. @bopinion @johnauthers
Law & Politics


If Beijing continues to side with Russia, it risks creating a bipolar world where two warring camps – the Eurasian Axis (Beijing-Moscow) and the West – do become powerful enough to carve up the planet, leading to the type of a geopolitical forecast that many analysts currently believe is likely: a new Cold War that bifurcates the global economy. 

As such, what President Xi will do in the next several weeks will not only determine China’s economic future, but also the global distribution of power governing international relations, trade, and finance over the next decade and quite possibly beyond.

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REGIME CHANGE
Law & Politics


REGIME Change came to Saddam’s Iraq and for a while regime change was de rigeur.
Muammar Gaddafi was decapitated and the domino effect only stopped when Vladimir Putin decided he was going to put a stop to it and intervened on behalf of Bashar Al-Assad in Syria.
Today, the US has exited Afghanistan and the days of a Unipolar World are self evidently behind us. 

We exist in a Tripolar World [US China and Russia] with rapidly emerging Middle Powers. 

I am not discounting Fortress Europe but one senses the Fortress is keener on a more defensive posture unlike the US [notwithstanding its withdrawal from Afghanistan], China and Russia. 

Taiwan and Ukraine are the immediate geopolitical flashpoints.

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The repayment capacity is almost back to where it was back in 2018. Importantly, the cycle has been interrupted too soon this time around. @ajpirzada
World Of Finance

The repayment capacity is almost back to where it was back in 2018. Importantly, the cycle has been interrupted too soon this time around. The improvement in the repayment capacity during much of 2019-20 was interrupted by Covid and then the commodity price shock.

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In many countries, COVID deaths are likely heavily undercounted, with excess deaths being 2, 3, 5, 15, 30 and even 50 to 100 times higher. @ArielKarlinsky
Misc.



So while Mexico reported 235K COVID deaths, excess > 468K. Russia reported 136K, excess > 550K. Nicaragua reported 137. excess > 6900.

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.088280
Dollar Index 99.973
Japan Yen 125.240 
Swiss Franc 0.93062
Pound 1.302895
Aussie 0.742750
India Rupee 75.9793 
South Korea Won 1237.195 
Brazil Real 4.6957000
Egypt Pound 18.440200
South Africa Rand 14.562800

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. $BTC Bitcoin’s Correlation With Big Tech Increases to Record @business @YahooFinance
World Currencies


Since the start of the pandemic, Bitcoin has tended to move in the same direction as the Nasdaq 100 index -- and they’re now in unison more than ever. 

The 40-day correlation between the two reached a record of 0.6945 on Friday, Bloomberg data show. 

The increase further erodes the argument that Bitcoin works well as a diversifier, one that’s been help up by proponents as key to its appeal.

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You can print money, but not oil to heat or wheat to eat wrote @CreditSuisse’s Zoltan Pozsar.
Commodities


Russia essentially gave the $ and the Euro the very same exorbitant privilege that King Abdul Aziz Ibn Saud of Saudi Arabia gave President Franklin D Roosevelt aboard the USS Quincy in Great Bitter Lake in February 14, 1945 when the petro dollar economy was symbolically born.

By insisting payments are made in Russian Rubles for Russian commodities Vladimir Putin has withdrawn that exorbitant privilege.

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According to an index compiled by the Food and Agriculture Organisation, a UN agency, in February global food prices reached a historic high. In March they blew past it @TheEconomist
Food, Climate & Agriculture



“But it is a curve each of them feels, unmistakably. It is the parabola'' 


“It is the parabola. They must have guessed, once or twice -guessed and refused to believe -that everything, always, collectively, had been moving toward that purified shape latent in the sky, that shape of no surprise, no second chance, no return.’’

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Global food markets are but the perturbation of a butterflys's wing away from a serious tipping point. @csmonitor By Aly-Khan Satchu, September 6, 2010
Food, Climate & Agriculture




In chaos theory, the butterfly effect is the sensitive dependence on initial conditions in which a small change in one state of a deterministic nonlinear system can result in large differences in a later state. 



Lorenz wrote:
"At one point I decided to repeat some of the computations in order to examine what was happening in greater detail. I stopped the computer, typed in a line of numbers that it had printed out a while earlier, and set it running again. I went down the hall for a cup of coffee and returned after about an hour, during which time the computer had simulated about two months of weather. The numbers being printed were nothing like the old ones. I immediately suspected a weak vacuum tube or some other computer trouble, which was not uncommon, but before calling for service I decided to see just where the mistake had occurred, knowing that this could speed up the servicing process. Instead of a sudden break, I found that the new values at first repeated the old ones, but soon afterward differed by one and then several units in the last decimal place, and then began to differ in the next to the last place and then in the place before that. In fact, the differences more or less steadily doubled in size every four days or so, until all resemblance with the original output disappeared somewhere in the second month. This was enough to tell me what had happened: the numbers that I had typed in were not the exact original numbers, but were the rounded-off values that had appeared in the original printout. The initial round-off errors were the culprits; they were steadily amplifying until they dominated the solution." (E. N. Lorenz, The Essence of Chaos, U. Washington Press, Seattle (1993), page 134)[7]
Elsewhere he stated:
One meteorologist remarked that if the theory were correct, one flap of a sea gull's wings would be enough to alter the course of the weather forever. The controversy has not yet been settled, but the most recent evidence seems to favor the sea gulls.

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From Russia with Love
Africa


Russia was going to be a different kind of superpower, one that does not engage in “pressure, intimidation and blackmail” to “exploit” sovereign African governments.
“Our African agenda is positive and future-oriented. We do not ally with someone against someone else, and we strongly oppose any geopolitical games involving Africa.”

“Russia regards Africa as an important and active participant in the emerging polycentric architecture of the world order and an ally in protecting international law against attempts to undermine it,” said Russian deputy foreign minister Mikhail Bogdanov back in November 2018.

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West Africa Oil Still Unloved Despite Post-Ukraine Supply Woes @business via @YahooFinance
Africa


Russia’s invasion of Ukraine has caused one of the biggest upheavals to global petroleum markets in living memory. It still isn’t resulting in a clamor for replacement barrels from west Africa.
Many of the region’s April oil cargoes have yet to find a home because the three biggest customers -- China, India and Europe -- are buying less, according to traders specializing in West African barrels.
“The Asian market has softened with the lockdowns and there is not as much West African crude going to China,” said Livia Gallarati, an analyst at Energy Aspects Ltd. 

“There has been some call on West African supply in Europe, but it isn’t as strong as North America or the Middle East.”
Angola depends heavily on China for crude sales, but oil demand there is weaker because tens of millions of people are once again under lockdown, and smaller independent oil refiners known as teapots have cut back purchases.
Last year, China accounted for roughly 84% of the purchases of Angolan barrels and has dominated buying for at least a decade. 

That means there are no ready markets elsewhere that can easily soak up cargoes from the west African country on a comparable scale.
“Teapots’ crude buying interests are going lower and lower due to the recent weak demand and deepening run cuts,” said Mercedes McKay, an analyst at Facts Global Energy.
Nigeria’s sales to Asia are also suffering because its key buyer, India, is looking well-supplied following a spate of Russian oil purchases, McKay said, adding that India imported almost as much Urals from Russia last month as in all of last year
.
The nation’s top refiners such as Indian Oil Corp. have been importing less African oil since the crisis started, tender data compiled by Bloomberg show.
West Africa’s other main market, Europe, is also seeing muted buying because oil refineries there view cargo offer prices as too high, traders said.
Several shipments of Nigerian crude have been offered for sale in Europe multiple times in a pricing window organized by Platts in recent weeks, without securing either buyers or bids.
“The prompt market in Europe is already well-supplied with European refiners being very cautious about run rates,” said Gallarati.
The signs of a relatively slack West African market add to signals that initial concerns about prompt supply tightness caused by Russia’s invasion might be easing. 

In the North Sea, key indicators of market strength have also been cooling.
Still, sales for West African crude are likely to improve in the coming months as refining runs ramp up for the summer and crude flows from Russia start to dwindle in earnest, particularly in northwest Europe, according to Energy Aspects.
Russia was also a key supplier of diesel to Europe before the crisis, and profit margins for producing diesel in the continent have soared during the conflict. 

Refiners in the region have the financial incentive to produce as much diesel as they can. 

A lot of West African oil tends to be rich in gasoline, which has had a less stellar rally.
“In June and July, we expect global crude balances will be very tight because we expect runs to increase,” said Gallarati. 

“There will be less Russian barrels coming into Europe in the coming months, so refiners are going to call on pretty much everywhere, including West Africa.”

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Who remembers these Ghananian pallbearers whose video went viral during the pandemic? Well, they are super rich now. @TechCabal
Africa

Benjamin Aidoo, the leader of the group recently sold their viral coffin dance as an NFT for 372eth ($1.046 million).

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@IFC_org offers conditions for buying Equity Bank stake @BD_Africa
N.S.E Equities - Finance & Investment

The International Finance Corporation (IFC) will require Equity Group   to commit to the global financier’s standards touching on environmental, social, and anti-money laundering practices before the institutional investor buys a 4.3 percent stake in the bank.
IFC usually asks companies it is investing in to adhere to its corporate governance policies. Some of the issues are already covered in national and international laws while others are currently voluntary, including environmental sustainability.
The bank’s commitment to the standards is part of the conditions that will have to be met before IFC and a fund –IFC Financial Institutions Growth Fund— complete the purchase of a combined 6.71 percent stake from Britam Holdings.
The insurer is selling the shares in a private transaction in which the parties negotiated the price and other terms including the issues IFC wants to be prioritised.
Such deals are markedly different from open market transactions where buyers of minority stakes are not entitled to negotiate with companies they are investing in over any issue.
“IFC and IFC FIG Fund having entered into a policy agreement with Equity Group relating to certain sanctionable practices, anti-money laundering, combating the financing of terrorism and environmental and social policies,” reads one of the conditions.

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