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Satchu's Rich Wrap-Up
Wednesday 08th of June 2022

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This period is wild, how many times have equities and bonds gone risk off at the time same time? @noahseidman
World Of Finance

Feb '20 bonds front ran from Dec '19, repo spook? 

Not Oct '18
Not Dec '15
Not Sept '08
Not Apr '00

Nothing like this in the last 22 years of data that I'm reviewing.

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As mentioned last week there are now DeMark Sequential sell Countdown 13's with the US 10 year and 30 year combined with bullish sentiment at 10%. @TommyThornton
World Of Finance

The signals have seen nominal pullbacks or have failed in this strong trend so it will be interesting to watch this develop

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As mentioned last week there are now DeMark Sequential sell Countdown 13s with the US 10 year and 30 year combined with bullish sentiment at 10 percent. @TommyThornton
World Of Finance

The signals have seen nominal pullbacks or have failed in this strong trend so it will be interesting to watch this develop

Deee-Lite - Good Beat 

Depending on you see a thing
The ship is free, or is it sinking?

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These beautiful landscapes hold secrets to the origins of life @NatGeo

“This journey through time, space, and diversity seeks to strengthen our bond with nature and inspires respect for the Earth,” says French photographer Olivier Grunewald. 

For 30 years he and his partner, conservationist and writer Bernadette Gilbertas, have traveled the world, documenting the places that best express the forces that shaped our unique planet, the basis of their Origins project. 

Ours is a rocky planet, born out of chaos. Driven by evolution, it’s home to diverse habitats and millions of species. One of those is our own, Homo sapiens, captivated by Earth’s wonders—and just as capable of razing them.

“It took 4.5 billion years to forge this lush, bountiful, and welcoming planet,” Grunewald says. 

“Now what will we do? Will we continue to spur the ecological crisis, or will we finally decide to prevent the worst?”

These images—a fraction of Grunewald’s collection—are classified according to four stages. 

The first is chaos—photographs that reflect the turbulent origins of the planet. Earth, the second category, centers on landscapes molded by erosive forces. 

Oasis represents the spread of plants—their persistent attempts to emerge in the most unlikely environments. 

Finally, the beasts theme celebrates the biodiversity of the animal kingdom in all its magnificence.
Grunewald and Gilbertas have captured the essence of places that are a testament to Earth’s distant past—the ancestral pulse that kindled life.

It all began about 4.5 billion years ago, many scientists believe, when a supernova explosion caused the solar nebula—a spinning cloud of gas and dust—to collapse, giving rise to our solar system.
Eight planets and many other celestial bodies began to orbit around our massive star, the sun. 

Of these, only three—Venus, Mars, and Earth—were in the habitable zone: the region around the sun where liquid water could exist on a planet’s surface. 

But as far as we know, only on Earth did life triumph—a long, arduous, and haphazard course.
At first our planet was an incandescent mass, its elements at the mercy of gravity’s tug and pull. 

The heavier elements sank to Earth’s center, forming a metallic core. 

Then a long cooling process produced two key ingredients for life: the Earth’s crust, and water vapor that condensed and fell—the first rain. 

Meteorites and asteroids bombarded the planet, and constant earthquakes and eruptions released vast amounts of magma and gas from fissures and volcanoes.
At some point, the planet formed distinct tectonic plates that moved and ground together, forcing some of the rock back into the interior. 

Volcanoes, most of which formed near the edges of tectonic plates, provided an ongoing outlet for the planet’s internal heat. 

Fortunately for us, Earth’s interior continues to generate heat from the radioactive decay of uranium and other elements left over from the formation of the planet. 

Along with the sun, this process keeps the planet at a comfortable temperature for life.
At some point organic molecules began to enrich ancient sediments, which played a key role in the rise of a new and potent force: life.
The first living things appeared on Earth before about 3.5 billion years ago, within hundreds of millions of years of the planet’s birth. 

We still don’t know how this genesis occurred, though some research suggests the necessary organic molecules formed in deep-sea hydrothermal vents. 

However those primordial organisms arose, they would unleash the unbridled force of life across the planet.

For more than a billion years, single-celled organisms were the only life on Earth. 

Complex multicellular organisms, with different types of cells performing different functions, did not become common until the Cambrian explosion around 540 million years ago.

The last universal common ancestor, known by the acronym LUCA, is the hypothetical organism that marks the lineage of all living things. 

We still don’t know when and where LUCA lived, though some scientists think it may have been single-celled bacteria that lived in sulfur-rich hydrothermal vents on the seafloor four billion years ago.

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Life emerged more than 3.5 billion years ago in an environment with water and volcanic activity, perhaps similar to Ethiopia’s Danakil Depression. @NatGeo

Mineral-rich deposits in the Dallol hydrothermal field display their splendor in blue and green basins, yellow sulfur terraces, geysers, briny springs, and salt crystals.

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The glow of sunrise washes over the cliff at Toroweap Point, in the heart of Arizona’s Grand Canyon National Park. @NatGeo

Cross-sections of the canyon, an immense gorge carved by the Colorado River, reveal two billion years of geological history.

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At dawn, a thin cloud lingers over Uluru, a sandstone outcropping in the heart of Australia, formed over 500 million years ago. @NatGeo

At 863 meters high, this rock, sacred to the area’s Aboriginal people, stands out in the vast expanse of the Northern Territory.

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These quiver trees in Namibia are favored by the San people, who hollow out branches to make cases for their arrows. @NatGeo

The trees, under threat by rising temperatures, have broad canopies that provide an ideal communal nesting place for weavers.

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Crime and the City visits Nepal's capital, finding a spiritual homeland, a notorious serial killer, and lots of backpacker noir.

Kathmandu, capital of Nepal with just 846,000 people and, in the old days, before Covid, a Mecca for backpackers and those on their gap year, the city’s population boosted by so many young folk again with rucksacks, walking boots and high hopes for having their minds blown at 4,600 feet – narcotically or spiritually (or both). 

The legendary heyday of Kathmandu was probably the 60s and 70s – the serial killer who targeted backpackers on the “Hippie Trail”, Charles Sobhraj, roamed the city and now remains in prison for life in Kathmandu. 

The recent BBC TV series The Serpent told his story. But Kathmandu has always remained popular, even after the devastating and tragic 2015 earthquake that destroyed so much of the city’s heritage and ancient architecture. 

And, of course, Kathmandu has attracted a good few writers over the years, some of them crime specialists.
The Sobhraj case has spawned a lot of true crime writing set in Kathmandu. 

Raamesh Koirala’s Charles Sobhraj: Inside the Heart of the Bikini Killer (2018, and using an alternative moniker for The Serpent) and Richard Neville’s On the Trail of the Serpent (2020) are just two of the most recent of the many books about Sobhraj.
And then there’s royal mass murder. On June 1, 2001, the heir to the Nepalese throne, Crown Prince Dipendra, donned military fatigues, armed himself with automatic weapons, walked in on a quiet family gathering, and, without a word, mowed his family down before turning a gun on himself.

But Dipendra did not die immediately, and while lying in a coma was declared king. He was now a living god. 

It’s a crime that has obviously fascinated and appalled in equal measure Nepalese society and the outside world. 

Amy Wilessee and Mark Whittaker’s Love and Death in Kathmandu (2004) and Jonathan Gregson’s Murder at the Palace (2002) are perhaps two of the best accounts of this bizarre and violent crime that effectively wiped out the Nepalese royal family in one go.  

Many of the those crime writers have travelled to Kathmandu from other, more familiar, South East Asian locations. John Burdett rose to fame as a bestselling author in Bangkok with the Thai Detective Sonchai Jitpleecheep series (see Crime and the City Bangkok for more). 

The fourth book in the Sonchai Jitpleecheep series is The Godfather of Kathmandu (2010). Sonchai Jitpleecheep is summoned to investigate the most shocking murder of his career so far, but he’s suffered a personal tragedy and feels connected to an exiled Tibetan lama living in Kathmandu.

Like Burdett, Tom Vater is another western author based in South East Asia writing non-fiction as well as crime fiction set in Thailand, Cambodia and India. 

In The Devils Road to Kathmandu (2021) it’s 1976 and four friends – Dan, Fred, Tim, and Thierry – are on a bus along the hippie trail from London to Nepal. 

Of course, not everything will go according to plan. Drug heists go wrong, bad acid trips, psychedelic nightclubs, before they finally reach the then counter-culture capital of the world, Kathmandu. 

Then one of them disappears with a bunch of cash leaving everyone else firmly in the lurch. 

A quarter-century later, mysterious emails arrive inviting the other three to return to Nepal to pick up their share of the stolen money. 

They decide to reunite in Kathmandu for a showdown with their past. But, naturally, it’s not as simple as that. 
Kathmandu (2019) was inveterate traveller, and author, Luke Richardson’s first novel. He has since gone on to set crime novels in many cities from Hong Kong to Berlin. 

Kathmandu is also the first in Richardson’s Leo & Allissa International Thrillers series. 

Leo’s jobless, crippled by anxiety, and obsessed with a girl he hasn’t seen in two years since they broke up on a Thai island. 

Now he’s looking for a politician’s missing daughter in Kathmandu, possibly one of many young backpackers going missing on the trail through Nepal. 

For a small city Kathmandu has seen more than its share of tragedy – natural and unnatural – as well as being a haunt of many murderers, drug dealers and serial killers. 

Yet, once the world opens up fully again, expect the backpackers and spiritual enlightenment seekers to flood back to this magical city in a mountain kingdom.

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@BorisJohnson should look for an honourable exit @thetimes @WilliamJHague
Law & Politics

The nature of this particular revolt makes it qualitatively as well as quantitatively devastating. 

A fairly narrow victory for Boris Johnson is not the defeat of a rival faction, or the squashing of an alternative candidate, but rather the fending-off of a gathering feeling of hopelessness. 

It is less likely to prove a turning point than a way marker on an exhausting road to further crises of confidence. 

That is the worst possible result from the Conservative Party’s point of view. 

Logically, they should either reconcile themselves to Johnson and get behind him, or decisively eject him and move on to a new leader. 

It does not seem they have done either.

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This barky won’t float. You cannot credibly lose the support of 40 per cent of the party – including a chunky portion of the payroll vote – and remain in office. @spectator @alexmassie
Law & Politics

Well, if the Prime Minister wishes to play his colleagues for fools that is his business and if they wish to go along with this rigmarole that is theirs. But the country deserves something a little better than this farce.

So here we are. The government will likely lose in Wakefield and we must hope it loses in Tiverton and then keeps losing wherever and whenever voters are given the opportunity to return a verdict upon it. 

Only then, perhaps, will Conservative MPs appreciate the deep folly of their previous choices

Despite what he may claim, Johnson is finished. The public know this and their sense of justice demands action. 

The precise moment of Johnson’s demise may not yet be fixed but the gathering sense of inevitability means last night’s vote was a shattering prime ministerial defeat in all but name. 

Tick tock. Tick tock. Time’s up.

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@BorisJohnson is now electoral asbestos It would be a bigger gamble for the Conservatives to keep Johnson as their leader than to remove him. @NewStatesman @BNHWalker
Law & Politics

There is no one quite like Boris Johnson. Rewind to 2019. It’s December, the Brexit wars are over (or are they?) and the Conservatives have just won an 80-seat parliamentary majority. Labour is in disarray. 
Johnson was integral to turning the Red Wall blue. As an unconventional Conservative leader, he helped to dampen enthusiasm among Labour Leavers and attract voters to the Tories who would otherwise have stayed home or voted elsewhere. 

Johnson, who forged the Leave coalition that won the EU referendum in 2016, sustained it through to the 2019 election. On that count there is no doubt Johnson was an electoral asset to the Conservatives.
That’s no longer the case. In the marginal seats that matter, confidence in the Tories has collapsed more than in the country at large. 

A recent JL Partners poll in Wakefield putting the Conservatives 20 points behind Labour illustrated as much, as did my modelling of the Red Wall. 
For the Tories, Johnson’s continued leadership is poisonous. 

He has played a leading role in dampening voter enthusiasm for the party and the longer this lasts, the more time Conservative supporters will spend acquainting themselves with Labour as the probable next government (as they did in the 1990s). 

One of the key factors behind Labour’s landslide victory in 1997 was that Tory voters disproportionately stayed home. 

They had little enthusiasm for John Major and little fear of Tony Blair. And though we are not on course for a 1997-style result, Johnson is doing the Conservatives’ election prospects no favours. 

Less than half of those who voted Tory in 2019 now regard Johnson as an electoral asset, according to a Savanta ComRes poll in January.

There is no guarantee that a successor to Johnson would rescue the Conservatives from defeat but there’s perhaps even less of a guarantee that Johnson can revive their fortunes. 

It’s far from clear how he would try, let alone succeed. 

Tory briefings are dominated by talk of cutting red tape, bonfires of quangos and angry noises over trans rights. 

Half are lines copied from 2010 and half are lines copied from Twitter keyboard warriors. 

There is seemingly zero strategy to recover the country Johnson has lost. Right now, this man is electoral asbestos.

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Taiwan: preparing for a potential Chinese invasion @FT
Law & Politics

When Joe Biden pledged last month to intervene militarily if China were ever to attack Taiwan, his comment was met with a harsh response from Beijing.
“If the US continues to go down the wrong path,” a foreign ministry spokesperson said, “the US will have to pay an unbearable price.”
The phrase was widely read as a warning about war. The same day, China and Russia flew a joint nuclear bomber exercise near Japan.

The exchange was the latest in a spiral of martial messaging between the US and China. 

It was also a reflection of the mounting fears in Washington, Taipei and among US allies that Beijing could try to annex Taiwan in the next few years.
“This is the decade of concern, particularly the period between now and 2027,” says Phil Davidson, a retired admiral who commanded US forces in the Indo-Pacific until last year. 

“I make that assessment because of the staggering improvements in Chinese military capabilities and capacities, the political timeline for Xi Jinping and the long-range economic challenges in China’s future.”
Although China’s threat to seize Taiwan by force has been in place ever since the Chinese Nationalist government and army fled to Taiwan in 1949 after losing the civil war on the mainland, Beijing had long focused on pulling the island into its fold with economic lure and political pressure.
But many Taiwanese policymakers now believe that as the Chinese Communist party loses hope these measures will ever work and with its armed forces modernising rapidly, Xi might opt for war soon.
Taiwan came into renewed focus as an increasingly dangerous flashpoint just days after Biden’s inauguration last year when Chinese warplanes simulated missile attacks on a US aircraft carrier sailing in the vicinity of the country. 

Over the following months, China then boosted the tempo and size of fighter jet and bomber sorties near Taiwan.
Davidson sounded the alarm in March last year, telling the Senate armed services committee that be believed the threat of a Chinese attack on Taiwan would “manifest . . . in the next six years”.

Shortly thereafter, a senior US official told the Financial Times that Xi was flirting with the idea of seizing control.
Since then such warnings have become more widespread — the background to Biden’s comments about responding to a Chinese invasion. 

It has also accelerated a shift in the conversation between Taiwan and the US over how to defend the island.
Although Washington has been urging Taipei for years to take that risk more seriously, the Taiwanese government and military were slow to respond. 

But the war in Ukraine has served as a wake-up call. Senior Taiwanese officials say Russia’s assault on its neighbour has highlighted the threat they face.
“The danger comes from Xi Jinping and the fact that he will begin a third term later this year,” says one official. 

“Under China’s previous process where they would have a new leader every 10 years, their ‘historic mission’ of unifying Taiwan could be passed on to the next leader. But when a national mission becomes one man’s mission, the danger rises.”
“Putin would not have made a decision like this to invade Ukraine if he wasn’t deciding everything by himself. So Xi Jinping could well make this kind of misjudgement as well,” the official adds.
A shift from ambiguity
While the Russian invasion of Ukraine has focused attention on the potential threat to Taiwan, there is one big difference between the two situations: a Chinese war on Taiwan could be a war with the US.
When Washington switched diplomatic recognition from Taipei to Beijing in 1979, it replaced its mutual defence treaty with Taiwan with the Taiwan Relations Act. 

The law requires the US to give the country the weapons needed to defend itself, and to maintain the US’s own capacity to resist force or coercion that would jeopardise Taiwan’s security.
In the past, the US kept it ambiguous how far that commitment went. In an attempt to both deter Beijing from considering military force and discourage Taipei from formalising its independence, Washington declined to spell out whether it would enter a war between the two.
Biden appears to have drastically reduced that ambiguity

Asked by a reporter during his recent trip to Japan if he was willing to use force to defend Taiwan, he said: “Yes. That is the commitment we made.” 

The White House hurried to stress — as it did after Biden’s previous similar statements which some analysts viewed as gaffes — that US policy towards Taiwan has not changed.
But senior officials in Taiwan and countries allied with the US believe Biden is trying to deter Beijing by signalling more clearly it might have to fight the US, too. 

“We think Biden has made a political decision to demonstrate that this option cannot be excluded,” says a senior Taiwanese official.
“In the Ukraine case, he said beforehand that the US would not enter the war. But when China feels that their military capability has reached the level ready for taking Taiwan, just using financial or economic sanctions will not create an effective deterrence,” he says. 

“So you must absolutely not let China believe that you will not take military action.”
Although there is growing concern about a possible invasion, the timeframe of any military action — and China’s real intentions — are still the subject of intense debate.
The year Davidson sees as the potential time horizon for a Chinese attack, 2027, is the centenary of the People’s Liberation Army. 

In November 2020, the Chinese Communist party said it wanted to “ensure that the 100-year military building goal is achieved by 2027”, called for faster military modernisation and reiterated the goal of making the Chinese military fit for networked, “intelligentised” warfare.
Although those are stock phrases China has used before, the Pentagon calls 2027 a “new milestone”. 

“If realised, the PLA’s 2027 modernisation goals could provide Beijing with more credible military options in a Taiwan contingency,” it said in its annual report on the Chinese military last year.
Some analysts doubt Davidson’s date. But one year on from his testimony, government and military officials in both Taipei and Washington say the window from now to 2027 is a genuine threat.
Last October, Taiwan’s defence minister Chiu Kuo-cheng said the PLA would have the “complete capability” to attack Taiwan by 2025. 

“The current situation is really the most dangerous I have seen in my more than 40 years in the military,” he told lawmakers.
Avril Haines, the US director of national intelligence, recently told Congress that the threat to Taiwan was “acute” between now and 2030 — lending credence to Davidson’s sense of urgency. 

John Aquilino, the current head of Indo-Pacific command, recently told the FT that the invasion of Ukraine underscored that the Chinese threat to Taiwan was not abstract.
Taiwanese experts see 2024 and 2025 as a particularly dangerous period. They believe Xi might be tempted to use force if the ruling Democratic Progressive party, which insists on preserving Taiwan’s de facto independence, wins again in the next presidential election in early 2024, or if he senses a political vacuum in the US after its next presidential election in late 2024.
Mackenzie Eaglen, a defence expert at the American Enterprise Institute, a Washington think-tank, says there are two camps when it comes to the timing of a possible Chinese attack on Taiwan.
“This is about those who believe in the Davidson window — the time of maximum danger — versus those [ . . . ] who believe we have time to acquire the capabilities that will deter and defeat China at some future date,” says Eaglen. 

She adds that the Pentagon leadership is “trying to thread the needle of agreeing that there is some concern now while putting the emphasis on the medium term”.
One person familiar with the administration’s assessment of the threat to Taiwan says there is general agreement that China is aiming to have developed the necessary capabilities to attack by 2027, but argues that is very distinct from the question of intent or action.
“I don’t think a decision has been taken [by China] to do anything on any timeline other than to have certain capabilities. I think that gets lost in the debate about a date or timeline,” she says.
Preparing for the worst
The growing anxiety about a potential Chinese invasion is reshaping the way Washington and Taipei think about defending the country.
Washington has been trying for more than a decade to convince Taiwan to “harden” itself against a Chinese invasion. 

But the country’s military kept planning under the assumption that it had more time to prepare or might not have to deal with a full-scale invasion.
Many Taiwanese defence experts see that as a worst-case scenario but they worry that Chinese military moves short of war, such as Beijing’s frequent air and sea exercises close to Taiwan, information warfare or maybe even a sea blockade, could undermine the country’s determination to resist. 

Taipei therefore wants to also retain military capabilities needed to counter those moves, such as surface ships, modern fighters and early warning aircraft.
But now that the US is increasingly focused on a near-term threat of invasion, it is forcing Taipei’s hand: the administration has begun to deny Taiwanese requests for large weapons such as anti-submarine warfare helicopters, which it believes could be quickly destroyed in a Chinese assault and use up too many valuable resources.
Instead, the US is pushing for an increased focus on small, relatively cheap and survivable weapons such as mobile missiles, which would be of use only in fighting back a Chinese attempt at invasion and occupation.
The Taiwanese government has also been jolted into action by the additional perspective provided by the Ukraine war.

Senior officials say the government of president Tsai Ing-wen is now laser-focused on making the country more resilient to resist a Chinese attack. 

Premier Su Tseng-chang has pledged support for extending basic military service from the current four months to a year, as well as raising the military budget, so far at an average of only 2 per cent of gross domestic product.
“We are indeed in the midst of very large-scale and thorough discussions both among ourselves and with the Americans right now about the things we need to do,” says one person familiar with the situation. 

“We are exploring a range of radically different ideas for making our country resilient, to build the features we need in wartime.” 
The policies under consideration include faster and more decisive reform of Taiwan’s undertrained reserve force; building distributed power and communications systems, which Chinese cyber and missile attacks could not knock out; hardening command and control systems; planning for basic goods supplies in wartime; and assigning administrative responsibilities for civil defence. 

The senior official says: “Our goal is to be ready between 2025 and 2027.”
Chinese modernisation
There is plenty of evidence from publicly available sources that the PLA is single-mindedly pursuing the capabilities needed to launch an invasion.
One is finding and targeting submarines that could attack Chinese naval vessels transporting invasion troops across the Strait. 

Of the 1,543 aircraft the PLA has flown into Taiwan’s air defence identification zone since September 2020, 262, the second-largest group, were anti-submarine warfare aircraft. 

The ADIZ is a buffer zone in international airspace watched for early-warning purposes.
In April 2021, the PLA Navy’s first Type 075 landing helicopter dock, a large amphibious assault ship that can carry helicopters and troops, went into service. Two more have already started sea trials.
That leaves the force still far short of its required transport capacity, but it plans on using civilian ferries, barges and floating ramps to bring troops to shore even without access to a port, according to writings by researchers at the PLA’s Military Transportation University.
Using reports on the military channel of China’s state television and satellite photos, Michael Dahm, a retired US Navy intelligence officer and researcher at the Johns Hopkins University Applied Physics Laboratory, analysed two related exercises in the summer of 2020 and 2021. 

He believes the PLA is developing plans to mobilise maritime shipping “on a massive scale”.
“Such a mobilisation of civilian shipping to support cross-strait operations may be very high risk and could involve extremely high losses,” he wrote in a paper last year. 

“[But] there are few challenges related to efficiency and attrition that the Chinese military could not simply address with overwhelming mass and a tolerance for loss.”

Some analysts believe that a Taiwan invasion will still remain a considerable challenge for the PLA for years to come — a fact they believe has been highlighted by Russia’s struggles in a war operation in much less complex circumstances.
“What [the PLA] wants to do in their high-end scenario is far more complicated than what Russia is trying to do in Ukraine. What Russia is trying to do is the easiest, and what China would be trying to do is the hardest in terms of conquest scenarios in general,” says Taylor Fravel, director of the Security Studies Program at MIT and an expert in Chinese military strategy. 

“Thus, observing Russia’s difficulties conducting relatively simple operations, China’s leaders may wonder about the PLA’s ability to carry out much more complex operations, which may make them more cautious about launching such an attack for the time being.”
Su Tzu-yun, an associate research fellow at the Institute for National Defence and Security Research, a think-tank backed by Taiwan’s defence ministry, argues that no matter what steps the PLA takes, it still needs to send ships across the Strait. 

“In Ukraine, we have seen Russian vehicles trapped on the highway. In the Taiwan scenario, the sea is your highway,” Su says. “So that is the time and place to destroy them.”
Yet while China’s ability to actually conduct an invasion remains unclear, the Chinese armed forces’ rapid modernisation has put its potential adversaries on the back foot.
“China is on a trajectory of investment. If the US continues the status quo in its approach to defence investments, the gap between the two is going to be such that the timeline will accelerate in that window,” Davidson says.
That imbalance could make the situation even more dangerous. A Taiwanese military official says the US plans to strengthen its posture in the Indo-Pacific, such as building a more mobile force of Marines and putting Chinese ships at risk with missiles on allied-controlled islands, will require several years.

 “We have concerns that the Chinese Communists could think that striking earlier is better — before we and the US are ready,” he says.
Some analysts argue that watching Russia struggle in Ukraine may also demonstrate to Beijing the importance of moving fast. 

“Politically, if China’s leaders believe that the United States has or will extend an unconditional security commitment to Taiwan, then the value for China of taking some kind of military action to demonstrate China’s resolve and willingness to resist the United States is much greater than before,” Fravel says.
Some Taiwan politicians think that the US’s increasingly bitter competition with China is adding to the risk. 

Eric Chu, chair of the Kuomintang opposition party, told a think-tank audience in Washington on Monday that he hoped US attention would not cause “trouble” in Asia. 

“I do appreciate any kind of help from the US,” Chu said. “But hopefully the tension can [ease in] the coming years.”

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Law & Politics

1-4-2-1. The first 1 refers to defending what has since come to be called the homeland. 
The 4 refers to deterring hostilities in four key regions of the world. 
The 2 means the U.S. armed forces must have the strength to win swiftly in two near-simultaneous conflicts in those regions. 
The final 1 means that we must win one of those conflicts “decisively,” toppling the enemy’s regime.

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Political decision-making is now driven by often weaponized babble.
Law & Politics

At a time when what is required is agile multi disciplinary thinking we have ''weaponized babble''

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The @POTUS Official Who Pierced Putin’s “Sanction-Proof” Economy @NewYorker
Law & Politics

Singh said, “We’ve made him stare into an economic abyss. But he could choose to pull back.”
The markets are where these two systems touch—the supply of buckwheat, the joint energy ventures, the price of the ruble—and within this arena the sanctions were a demonstration that Washington still had levers to pull. 

“You know, we can play chess, too,” Singh said. “It was important for us to show that the fortress could come crumbling down.”

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Global growth is expected to slump from 5.7 percent in 2021 to 2.9 percent in 2022— significantly lower than 4.1 percent that was anticipated in January. @WorldBank #WBGEP2022
World Of Finance

 As a result of the damage from the pandemic and the war, the level of per capita income in developing economies this year will be nearly 5 percent below its pre-pandemic trend.

“The war in Ukraine, lockdowns in China, supply-chain disruptions, and the risk of stagflation are hammering growth. For many countries, recession will be hard to avoid,” said World Bank President David Malpass

Among emerging market and developing economies, growth is also projected to fall from 6.6 percent in 2021 to 3.4 percent in 2022—well below the annual average of 4.8 percent over 2011-2019.

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.06787
Dollar Index 102.622
Japan Yen 133.2485
Swiss Franc 0.97524
Pound 1.256000 
Aussie 0.719595
India Rupee 77.6952 
South Korea Won 1256.830
Brazil Real 4.8709 
Egypt Pound 18.687301 
South Africa Rand 15.44200 

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@Trafigura warns oil prices could reach ‘parabolic state’ in threat to economy @FT

The head of Trafigura has warned that the oil market could reach a “parabolic state” this year with prices surging to record highs and triggering a slowdown in economic growth.

Jeremy Weir, chief executive of the commodity trader, said that energy markets were in a “critical” state as sanctions on Russia’s oil exports following its invasion of Ukraine had exacerbated already tight supplies created by years of under-investment.
“We have got a critical situation,” Weir told the FT Global Boardroom conference on Tuesday. “I really think we have a problem for the next six months . . . once it gets to these parabolic states, markets can move and they can spike quite a lot.”
A parabolic move in markets is generally defined as when a price that has been rising suddenly surges to hitherto unseen levels, mimicking the right side of a parabolic curve.
Weir added it was highly probable that oil prices could rise to $150 a barrel or higher in the coming months, with supply chains strained as Russia tries to redirect its oil exports away from Europe.
Brent crude, the international oil benchmark, which is trading near $120 a barrel, hit an all-time peak of $147 on the eve of the financial crisis in 2008.
The Trafigura executive was the latest to warn that the economy has not yet seen the worst of the energy crisis, with little way of lowering prices as already-squeezed global supplies are likely to get scarcer if Russian production falls further.
Jamie Dimon, JPMorgan’s chief executive, warned last week that prices could reach $150 or $175 a barrel this year. 

Analysts at Goldman Sachs are forecasting oil could average more than $140 a barrel in the third quarter, when the US summer driving season is at its peak.
Weir said the rising price of other commodities, including metals such as copper and lithium, was also likely to weigh on global economic growth and could ultimately trigger a slowdown to curb demand.
“If we see very high energy prices for a period of time we will eventually see demand destruction,” he said. 

“It will be problematic to sustain these levels and continue global growth.”
Russian oil production had already declined by as much as 1.3mn barrels a day — or more than 1 per cent of global demand — with the country’s output of refined products of diesel and gasoline also falling by a similar amount, Weir said.
There are risks Russia’s production will fall further after Europe agreed last month to bar seaborne imports of Russian oil and a looming ban on vessels carrying Russian oil from accessing EU and UK insurance markets.

Saudi Arabia led the Opec+ alliance in agreeing to accelerate oil production increases slightly last week, but prices have continued to rise.

Trafigura was the biggest exporter of seaborne crude cargoes from Russia’s state-backed oil champion Rosneft before the invasion of Ukraine.
Russia previously represented 6 per cent of Trafigura’s global business, Weir said, adding that the company had largely wound up its dealings in the country.
Trafigura was only lifting a “limited” amount of permitted refined products from Russia, having ceased all trading in Russian crude. Its investment in Rosneft’s vast Vostok oil project in the Russian Arctic remained “frozen”.
Weir said there was little sign of a slowdown in oil demand despite diesel and gasoline prices already reaching record levels due to tight refining capacity globally, as the economy is still growing strongly while consumers have savings after coronavirus lockdowns.
The decommissioning of old refineries and a lack of investment in new capacity meant refined products had to be shipped much further to reach customers. 

The loss of supplies from Russia, a large refiner that used to sell a large volume of diesel to Europe, was making the situation particularly acute.
“The barrels have to move a lot greater distances, it’s far less efficient than it was before and it’s problematic,” he said.

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“But it is a curve each of them feels, unmistakably. It is the parabola'' Gravity’s Rainbow is a 1973 novel by Thomas Pynchon

“But it is a curve each of them feels, unmistakably. 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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Sub-Saharan Africa: Growth is forecast to moderate to 3.7% in 2022 and rise to 3.8% in 2023. @WorldBank #WBGEP2022

Recent developments: 

Following a rebound of 4.2 percent in 2021, growth in SSA has weakened this year as domestic price pressures, partly induced by supply disruptions owing to the war in Ukraine, are reducing food affordability and real incomes, especially in low-income countries (LICs).

Limited direct trade and financial linkages with Europe and Central Asia have helped contain some of the negative effects of the war in Ukraine on SSA. 

However, the sharp deceleration of global growth and war- related shortages of food and fuel are creating substantial headwinds for the region, even more so in countries reliant on wheat imports from Russia and Ukraine (Democratic Republic of Congo, Ethiopia, Madagascar, Tanzania). 

In many SSA countries, increasing living costs have also tempered gains from looser social restrictions and higher commodity export prices.
Growth in the three largest SSA economies—Angola, Nigeria, and South Africa—was an estimated 3.8 percent in 2021 supported by the 4.9 percent rebound in South Africa. 

Growth momentum carried on in Angola and Nigeria, where high oil prices, the stabilization of oil production, and recovery in non-resource sectors supported activity in the first half of this year. 

Nevertheless, persistently high domestic inflation, power cuts, and shortages of food and fuel have been weighing on recoveries. 

In South Africa, growth has moderated substantially amid policy tightening, high and rising unemployment, and recurring power shortages. 

Infrastructure damage to the country’s main port following severe floods has also exacerbated supply chain disruptions related to the war in Ukraine and lockdowns in China. 

Elsewhere in the region, the boost from a waning of the pandemic and a gradual rebound in tourism is being muted by rapidly rising living costs and weakening domestic demand. 

In some countries, debt distress, policy uncertainty, social unrest, and violence still hamper recoveries, especially in fragile and conflict-affected LICs.

Outlook: Growth in SSA
The growth slowdown in SSA could also intensify pandemic-induced losses in per capita incomes. 

The region is now expected to remain the only Emerging Market and Developing Economy (EMDE) region where per capita incomes will not return to their 2019 levels even in 2023. 

In about 45 percent of the region’s economies and in half of its fragile and conflict-affected countries, per capita incomes are forecast to remain below pre-pandemic levels next year. 

Surging food and fuel import bills could also reverse recent progress in poverty alleviation across the region, especially in countries where vulnerable populations are sizable (Democratic Republic of Congo, Nigeria), and dependence on imported food is high (Benin, Comoros, The Gambia, Mozambique).
Risks: Risks to the outlook are predominantly to the downside.
SSA Growth is expected at 3.7 percent in 2022 and 3.8 percent in 2023 – on par with January projections. 

Yet, excluding the three largest economies, growth was downgraded by 0.4 percentage point both in 2022 and 2023. 

Although, elevated commodity prices would underpin recoveries in extractive sectors, in many countries rising inflation would erode real incomes, depress demand, and deepen poverty.

Growth in LICs was revised down by almost a full percentage point this year as food price inflation and food shortages are expected to take a particularly severe toll on vulnerable populations, further worsening food insecurity in those countries

A prolonged disruption to global trade in cereals and fertilizer due to the war in Ukraine would significantly worsen affordability and availability of in LICs, while rapid increases in living costs risk escalating social unrest.
A faster-than-expected slowdown of the global economy, which could be triggered by the accelerated policy tightening in advanced economies and the global resurgence of the COVID-19, would hurt many SSA commodity exporters. 

Much tighter financial conditions in EMDEs would raise borrowing costs and the risk of debt distress.
Fiscal space, already constrained by high levels of public debt, could narrow further if spending pressures to curb the impact of rising food and fuel prices continue to build up. 

Finally, persistent domestic inflation could speed up monetary policy tightening, escalating stagflation risks across the region.

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Africa, the Collateral Victim of a Distant Conflict @Consortiumnews @vijayprashad

On May 25, Africa Day, Moussa Faki Mahamat – the chairperson of the African Union (AU) – commemorated the establishment of the Organisation for African Unity (OAU) in 1963, which was later reshaped as the AU in 2002, with a foreboding speech.

Africa, he said, has become “the collateral victim of a distant conflict, that between Russia and Ukraine.”
That conflict has upset “the fragile global geopolitical and geostrategic balance,” casting “a harsh light on the structural fragility of our economies.”
Two new key fragilities have been exposed: a food crisis amplified by climate change and a health crisis accelerated by Covid-19.
A third long-running fragility is that most African states have little freedom to manage their budgets as debt burdens rise and repayment costs increase.

“Public debt ratios are at their highest level in over two decades and many low-income countries are either in, or close to, debt distress,” said Abebe Aemro Selassie, the director of the African Department at the International Monetary Fund (IMF). 

The IMF’s Regional Economic Outlook report, released in April, makes for grizzly reading, its headline clear: “A New Shock and Little Room to Manoeuvre.”
Debt hangs over the African continent like a wake of vultures. 

Most African countries have interest bills that are much higher than their national revenues, with budgets managed through austerity and driven by deep cuts in government employment as well as the education and health care sectors.
Since just under two-thirds of the debt owed by these countries is denominated in foreign currencies, debt repayment is near impossible without further borrowing, resulting in a cycle of indebtedness with no permanent relief in sight.
None of the schemes on the table, such as the G20’s Debt Service Suspension Initiative (DSSI) or its Common Framework for Debt Treatments, will provide the kind of debt forgiveness that is needed to breathe life into these economies.
In October 2020, the Jubilee Debt Campaign proposed two common sense measures to remove the debt overhang. 

The IMF owns significant quantities of gold amounting to 90.5 million ounces, worth $168.6 billion in total; by selling 6.7 percent of their gold holdings, they could raise more than enough to pay the $8.2 billion that makes up DSSI countries’ debt.
The campaign also suggested that rich countries could draw billions of dollars towards this cancellation by issuing less than 9 percent of their IMF Special Drawing Rights allocation.

Other ways to reduce the debt burden include cancelling debt payments to the World Bank and IMF, two multilateral institutions with a mandate to ensure the advancement of social development and not their own financial largess.

However, the World Bank has not moved on this agenda – despite dramatic words from its president in August 2020 – and the IMF’s modest debt suspension from May 2020 to December 2021 will hardly make a difference.
Along with these reasonable suggestions, bringing the nearly $40 trillion held in illicit tax havens into productive use could help African countries escape the spiraling debt trap.
The Burden of Military Spending
“We live in one of the poorest places on earth,” Mali’s former President Amadou Toumani Touré told me just before the pandemic. Mali is part of the Sahel region of Africa, where 80 percent of the population lives on less than $2 a day.
Poverty will only intensify as war, climate change, national debt and population growth increase.

At the 7th Summit of the leaders of the G5 Sahel (Group of Five for the Sahel) in February 2021, the heads of state called for a “deep restructuring of debt,” but the silence they received from the IMF was deafening.
The G5 Sahel was initiated by France in 2014 as a political formation of the five Sahel countries – Burkina Faso, Chad, Mali, Mauritania and Niger.
Its real purpose was clarified in 2017 with the formation of its military alliance (the G5 Sahel Joint Force or FC-G5S), which provided cover for the French military presence in the Sahel. 

It could now be claimed that France did not really invade these countries, who maintain their formal sovereignty, but that it entered the Sahel to merely assist these countries in their fight against instability.
Part of the problem is the demands made on these states to increase their military spending against any increase in spending for human relief and development.
The G5 Sahel countries spend between 17 percent and 30 percent of their entire budgets on their militaries. 

Three of the five Sahel countries have expanded their military spending astronomically over the past decade: Burkina Faso by 238 percent, Mali by 339 percent and Niger by 288 percent. The arms trade is suffocating them.
Western countries – led by France but egged on by the North Atlantic Treaty Organization (NATO) – have pressured these states to treat every crisis as a security crisis. 

The entire discourse is about security as conversations about social development are relegated to the margins. 

Even for the United Nations, questions of development have become an afterthought to the focus on war.
Mali Moves
In the first two weeks of May, the Malian military government ejected the French military and withdrew from G5 Sahel in the wake of deep resentment across Mali spurred by civilian casualties from French military attacks and the French government’s arrogant attitude towards the Malian government.
Colonel Assimi Goïta, who leads the military junta, said that the agreement with the French “brought neither peace, nor security, nor reconciliation” and that the junta aspires “to stop the flow of Malian blood.”
France moved its military force from Mali next door to Niger.
No one denies that the chaos in the Sahel region was deepened by the 2011 NATO war against Libya. 

Mali’s earlier challenges, including a decades-long Tuareg insurgency and conflicts between Fulani herders and Dogon farmers, were convulsed by the entry of arms and men from Libya and Algeria.
Three jihadi groups, including Al-Qaeda, appeared as if from nowhere and used older regional tensions to seize northern Mali in 2012 and declare the state of Azawad. French military intervention followed in January 2013.

Moving Europe’s Border

Travel through this region makes it clear that French – and U.S. – interests in the Sahel are not merely about terrorism and violence. 

Two domestic concerns have led both foreign powers to build a massive military presence there, including the world’s largest drone base, which is operated by the U.S., in Agadez, Niger.
The first concern is that this region is home to considerable natural resources, including yellowcake uranium in Niger. 

Two mines in Arlit (Niger) produce enough uranium to power 1-in-3 light bulbs in France, which is why French mining firms (such as Areva) operate in this garrison-like town.

Secondly, these military operations are designed to deter the steady stream of migrants leaving areas such as West Africa and West Asia, going through the Sahel and Libya and making their way across the Mediterranean Sea to Europe.
Along the Sahel, from Mauritania to Chad, Europe and the U.S. have begun to build what amounts to a highly militarized border. 

Europe has moved its border from the northern edge of the Mediterranean Sea to the southern edge of the Sahara Desert, thereby compromising the sovereignty of North Africa.

Military coups in Burkina Faso and Mali are a result of the failure of democratic governments to rein in French intervention. 

It was left to the military in Mali to both eject the French military and depart from its G5 Sahel political project.

Conflicts in Mali, as former President Alpha Omar Konaré told me over a decade ago, are inflamed due to the suffocation of the country’s economy. 

The country is regularly left out of infrastructure support and debt relief initiatives by international development organizations.
This landlocked state imports over 70 percent of its food, prices for which have skyrocketed in the past month. 

Mali faces harsh sanctions from the Economic Community of West African States (ECOWAS), which will only deepen the crisis and provoke greater conflict north of Mali’s capital, Bamako.
The conflict in Mali’s north affects the lives of the country’s Tuareg population, which is rich with many great poets and musicians. 

One of them, Souéloum Diagho, writes that “a person without memory is like a desert without water” (“un homme sans mémoire est comme un desert sans eau”).
Memories of older forms of colonialism sharpen the way that many Africans view their treatment as “collateral victims”’ (as the AU’s Mahamat described it) and their conviction that it is unacceptable.

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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.

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24 OCT 11 :: Gaddafi's Body in a Freezer - What's the Message?

The image of a bloodied Gaddafi, then of a dead Gaddafi in a meat locker have flashed around the world via the mobile, YouTube and Twitter.

Marshall McLuhan’s prediction in The Gutenberg Galaxy (1962) that ‘The new electronic interdependence recreates the world in the image of a global village’ has come to pass. 

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Kenya’s @RailaOdinga to Restructure Debt, Fund Poor If He Wins Election @bpolitics @herbling
Kenyan Economy

Kenyan opposition leader Raila Odinga vowed to restructure public debt, increase social spending and deliver double-digit economic growth if he wins the Aug. 9 general election.
Odinga, 77, who is making his fifth bid to lead East Africa’s biggest economy, said his administration will seek to aggressively pursue debt-relief negotiations and disclose the terms of public borrowing as part of plans to better manage the nation’s finances.

The plan is to “restructure and re-profile Kenya’s debt portfolio to achieve debt sustainability and reduce the debt burden of future generations,” he said Monday in the capital, Nairobi. 

Promoting public-private partnership models in funding projects will also be a priority, he said. 

Odinga will contest the vote against Deputy President William Ruto, who has also pledged to rein in government borrowing. 

Whoever wins the race to succeed President Uhuru Kenyatta will have to contend with a growing debt burden -- the IMF has warned of a high risk of debt distress -- limiting fiscal space to spend on infrastructure, health care and education.
Odinga leads Ruto 39% to 35% among likely voters, Nairobi-based pollster Tifa Research said in May, the first time the opposition leader has edged ahead of the deputy president.
Poor households will receive 6,000 shillings monthly, universal health care and free education from early childhood to tertiary level, Odinga said. 

On taxation, he promised tax reforms such as a seven-year holiday for startups, a three-year break for SMEs, and to review taxes on petroleum products to make gasoline affordable.
Kenya spent 840.8 billion shillings ($7.2 billion) or 57.7% of tax income in the 10 months through April to service public debt, which stood at 8.4 trillion shillings as at March 2022.
The new leader may also have to deal with the aftermath of a potentially divisive election, with previous votes being marred by violence that tainted Kenya’s stature as a stable nation.

Other Highlights:

To more than double budgetary allocation to county governments
To set up a Kenyan Diaspora Investment Bank to focus on the diaspora’s investment needs and provide reliable services to them
Eliminate chronic current account and balance of payments deficits by growing exports
Automation of agriculture, livestock, blue economy, mining and processing
Improve access to affordable inputs such as seeds, fertilizer and chemicals
Build new paved roads, develop railway infrastructure to facilitate national and regional integration
Establish strategic petroleum and gas reserves
Clean and safe water supply for all Kenyan households, invest in public sanitation and low-cost sewerage options countrywide

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.@WorldBank Sees Kenya Economy Slowing as Fuel Costs Hit Recovery @bpolitics @herbling
Kenyan Economy

East Africa’s largest economy will probably expand by 5.5%, compared with 7.5% last year, the World Bank said in it’s Kenya Economic Update published on Tuesday. 

Growth may further slow in the following period, according to the lender.
The new forecast, an upgrade from 4.9% previously, takes into account a stronger-than-expected recovery from the coronavirus pandemic last year, according to the report. 

The outlook would have been better but has been weighed on by increases in the prices of fuel, fertilizer and wheat because of Russia’s invasion of Ukraine.
“Offsetting the strong economic momentum generated by the pandemic recovery is the impact of the war in Ukraine,” according to the World Bank report. It has “clouded the outlook for the global economic recovery.” 
The government is spending about $66 million monthly on fuel subsidies, which is exerting fiscal pressure and curbing a revenue recovery that had gathered momentum following a rebound in economic activities last year.
“A strong recovery in revenues has supported fiscal performance but this is now being countered by the cost of subsidizing fuel,” according to the report. 

“The limited passthrough of higher international oil prices to consumers is generating fiscal costs.”
Kenya is vulnerable to the impact of Russia’s war on commodities. 

That’s despite moderate exposure to Russia and Ukraine, given trade with both countries was around 2.1% in the five years through 2020.
Kenya’s deteriorating outlook is exacerbated by a prolonged drought and a slowdown in investment because of general elections set for Aug. 9.
The “worsening” drought is having a “devastating effect on food security and livelihoods in affected parts of the country and is necessitating increased social spending on food assistance,” according to the report.
Public debt is projected to decline to 64.9% of gross domestic product in 2023-24, compared with an estimate of 68% of GDP in the year through June, according to the lender. 

That will be if the economy expands at a favorable rate and borrowing costs reduce.

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

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