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Macro Thoughts

Home Thoughts

The truth is we never stop being children, terrible children covered
in sores and knotty veins and tumors and age spots, but ultimately
children, in other words we never stop clinging to life because we are
life. Roberto Bolaño

In some lost fold of the past, we wanted to be lions and we’re no more
than castrated cats. Roberto Bolaño

“Truth is to be handled gingerly. That's an egg with a very thin
shell.” —Wallace Stegner

Enjoyed catching up with Mr. and Mrs. Chalhoub yesterday and with Mr.
Herve Gogo. All asked ''Where is Hannah?''

I said Hannah is back at school getting an education.

And I told her this morning and I think she was pleased and would have
been very disappointed otherwise.

The arbitration tribunal of five impartial experts that has been
considering the Philippines suit against China under the UN Convention
on the Law of the Sea (UNCLOS) will soon hand down its final decision.

What will Beijing do in response to the tribunal’s impending final
award? Ignoring it in silence does not appear to be a feasible option.
Some have speculated that a largely adverse decision might lead China
to dramatize its protest by withdrawing from the UNCLOS system, as
permitted upon one year’s notice. Yet denunciation of the treaty could
not occur in time to relieve China of its obligation to comply with
the arbitration award, and such an extreme reaction to a judgment of
the world community would cause China even more long-lasting damage to
its reputation than failure to comply. China would also be
surrendering its future opportunities to influence the development of
UNCLOS as it relates to many other issues important to Beijing.

1-      Susan Rice, US National Security Advisor
2-      Ashton Carter, US Secretary of Defense
3-      Joseph Westphal, US Ambassador to Saudi Arabia
4-      Lisa Monaco, Assistant to the President for Homeland Security and
Counter-terrorism
5-      Benjamin Rhodes, Deputy National Security Advisor for Strategic
Communications and Speech-writing
6-      Josh Earnest, White House Press secretary
7-      John Brennan, Director of the Central Intelligence Agency
8-      Robert Malley, Senior Advisor to the President for Counter-ISIS &
White House Coordinator for Middle East, North Africa, and the Gulf
Region
9-      Jeff Prescott, Senior Director for Iran, Iraq, Syria, and Gulf States
10-     Sean Misko, Director for Gulf States

Conclusions

Security, Security, Security.

U.S. President Barack Obama arrives in Saudi Arabia but is greeted by
a lower-level delegation as King Salman opts to welcome Gulf leaders
instead for a regional summit on security.

"Islam's borders are bloody," Samuel Huntington once wrote, "and so
are its innards." Since the 9/11 attacks, that conventional wisdom has
fueled a bizarre search for the Islamic roots of modern terrorism.

"Islamic" fanaticism appeared to trump every likely explanation --
historical, sociological and psychological -- for the attacks and
others that followed. Islam seemed in dire need of "moderates" if not
a "Reformation" -- and many a quixotic government program was launched
to encourage both.

After nearly a decade and a half of escalating wars, massacres and
rising anti-Muslim prejudice, it may be time to admit that the whole
obsession with Islam has been catastrophically counter-productive. The
roots of terrorism have always lain much closer -- planted deeper in
the modern world that we inhabit than in a diversely-practiced faith
that originated in 7th century Arabia.

Despite their DIY interpretations of jihad, men like Osama bin Laden
and his deputy Ayman al-Zawahiri at least demonstrated some elementary
knowledge of Islamic tradition and history. Many of the terrorists
involved in recent attacks on Paris and Brussels seem rarely to have
stepped inside a mosque.

These outcasts and delinquents were better known for their cocaine
consumption and drunken carousing than for their knowledge of the
hadith. Indeed, their recruiting sergeant, Khalid Zerkani, assured
them that "past criminal convictions were not an obstacle to the
Islamic cause, but a vital foundation."

This is the danger of what the Moroccan-Belgian writer Hind Fraihi,
who authored a book about the Brussels district of Molenbeek, calls "a
little Islam" -- some patently bogus religious claim that's then mixed
with a profound "knowledge of guns, safe houses and the underground
scene.”

For exponents of Gangsta Islam, mass murder represents an act of
self-empowerment -- not all that different from what Oscar Wilde
called an "intensified assertion of individualism." Wilde hailed "sin"
as release from stagnation; he was writing during the late 19th
century when most of Europe’s bourgeois elites, unable to accommodate
mass aspirations for prosperity and stability, looked venal and
devious.

Then, a widespread mood of disaffection and perverse defiance
produced, among others, a poet like Rimbaud who openly proclaimed his
desire "to be as scummy as possible" and Baudelaire’s "dandy" who felt
at ease only with criminals. These were not mere literary conceits.
Terrorism first emerged during this period of traumatic social and
economic transformation.

The man often called the first modern terrorist, a Frenchman named
Emile Henry, bombed a mining company in 1892 and two years later, a
much-frequented café near the Gare Saint-Lazare. In court, Henry
claimed to have acted so that the "insolent triumphs" of the
bourgeoisie were shattered, and "its golden calf would shake violently
on its pedestal, until the final blow knocks it into the gutter and
pools of blood."

France in the late 19th century suffered some of the worst excesses of
terrorism by disenfranchised and radicalized young men; it also hosted
proto-Fascist movements that demonized capitalism and moneymaking
Jews. Attacks were directed at institutions that seemed to represent
the deceitful values of the bourgeoisie. There was one on a
disreputable music hall in Lyons in 1882; it may have been directly
provoked by an anarchist newspaper that said, "You can see there,
especially after midnight, the fine flowers of the bourgeoisie and of
commerce."

An anarchist attacked the Paris stock exchange in 1886; another hurled
a bomb at the Chamber of Deputies in Paris in 1893. An Italian
anarchist then stabbed to death the president of France for refusing
to pardon the murderer.

As Richard Bach Jensen relates in his illuminating book, "The Battle
Against Anarchist Terrorism," European states responded to terrorism
with brutal repression: Torture became common again, along with
summary trials, executions and crackdowns. And governments cynically
started to use the threat of terrorism to shore up domestic support.

The period also coincided with the birth of mass journalism. A
sensationalistic press depicted the murderers as a powerful
conspiratorial force spanning the globe. Predictably, important
differences between their aims and character were ignored.

Our own intellectual confusion seems deeper, perhaps because history
since the end of the cold war appeared to be ending in the universal
triumph of democracy and capitalism. Everyone on earth seemed on their
way to being middle-class consumers. By interrupting this conviction
of inevitability, 9/11 and subsequent terrorist attacks appeared to be
the work of people driven entirely by medieval religious fanaticism.

Today we're shocked by demagogues, from France to India to the U.S.,
who scapegoat minorities and stoke vengefulness among angry masses.
But they reflect the same recurring pathologies of the modern world as
the delinquents of Gangsta Islam -- and indeed the social outcasts who
were rioting in the banlieues of Paris long before the pied pipers of
Islamic State arrived on the scene.

It's now clear that a fixation with reforming Islam saved us from much
difficult and necessary reflection on our secular political and
economic institutions. The fact is that they definitely and urgently
need a Reformation.

“The Lisa Affair was a real eye-opener.”

The mobilization in Germany shows a reach by the Kremlin into the
political workings of Europe’s largest economy that goes far beyond
the frequent policy hazings meted out by its English-language media
arms, RT television and the Sputnik news service.

Putin’s longtime foreign minister, Sergei Lavrov, broke with
diplomatic convention in late January to accuse Germany of a cover-up
in the Lisa Affair. That outraged Merkel’s government, prompted
Lavrov’s counterpart to issue a rare personal rebuke and led the
chancellery to order the BND spy agency to probe the Kremlin’s role in
the scandal, the officials in Berlin said.

Germany already has a special unit tasked with countering Russian
disinformation and it works on the assumption that Putin’s goal is to
topple EU-friendly governments and replace them with pro-Russia
parties, regardless of where they fall on the political spectrum,
according to the officials.

Euro 1.1290
Dollar Index 94.53
Japan Yen 109.74
Swiss Franc 0.9712
Pound 1.4345
Aussie 0.7806
India Rupee 66.275
South Korea Won 1133.66
Brazil Real 3.5277
Egypt Pound 8.8799
South Africa Rand 14.2237

USD Index doing the whole bounce, bounce thing aroun 94 level...
where do we go from here? #DancingWithFibonacci #FX H/T David Ingles

Gold 6 month INO 1247.55


Crude Oil 1 Year Chart INO 44.26


The way it plunged after Doha and then rebounded was in fact a bullish
Trading Signal. It feels as if it wants to regain $50.00. However,
this could unravel at any moment and I still see a Fresh 2016 Low
Print.

Erdem Basci’s biggest accomplishment may be that people still talk
about the independence of Turkey’s central bank.

The 49-year-old former academic was one of the world’s most innovative
and unpredictable central bankers during a five-year term that ended
Tuesday and wasn’t renewed. He was also one of the most beleaguered,
criticized by investors for missing inflation targets every year, and
berated by his prime minister-then-president, Recep Tayyip Erdogan, as
a traitor, a failure and the government’s primary obstacle to reaching
ambitious economic goals.

Basci’s departure leaves his replacement, 40-year-old Murat Cetinkaya,
with one of the toughest jobs in central banking. He’ll have to manage
Erdogan’s pressure for rapid cuts in borrowing costs, while also
showing enough independence to maintain the confidence of foreign
investors who own more than $82 billion of Turkey’s stocks and bonds.

Frontier Markets

FORMER UN secretary general Kofi Annan says long serving African
leaders were unnecessarily exposing their regimes to military coups in
their countries if they continued clinging to power.

Speaking to the media at the 5th Tana High-Level Forum on Security in
Africa, Annan urged leaders to leave office when their time was up.

"I think Africa has done well, by and large the coups have more or
less ended, generals are remaining in their barracks, but we are
creating situations which may bring them back," the Nobel laureate
said.

"If a leader doesn't want to leave office, if a leader stays on for
too long, and elections are seen as being gamed to suit a leader and
he stays term after term after term, the tendency may be the only way
to get him out is through a coup or people taking to the streets.

"Neither approach can be seen as an alternative to democracy, to
elections or to parliamentary rule. Constitutions and the rules of the
game have to be respected."

Annan, the keynote speaker at the forum this year urged African
leaders to abandon their winner-take-all systems he said have tended
to fuel conflicts on the continent as the opposition demanded a say in
the running of national affairs.

Conclusions

Kofi is rarely this outspoken.

Police in southeastern Democratic Republic of Congo fired tear gas on
Wednesday to disperse hundreds of anti-government protesters who
accused security forces of vandalizing posters of opposition leaders,
human rights activists said.

Political tension is high in Congo, where opponents of President
Joseph Kabila say he is trying to cling to power beyond the end of his
mandate in 2016. Violent protests over the issue in January 2015
killed more than 40 people.

More than 500 supporters of the opposition UNAFEC party clashed with
police in the Kenya neighborhood of Lubumbashi, Timothee Mbuya, the
president of a local human rights organization called Justicia, told
Reuters.

Lubumbashi is the largest city of copper-rich Katanga, which is
Kabila's home region, but he has faced vigorous opposition there and
several prominent supporters have defected from his ruling coalition
over the last 18 months.

53,789.75 +408.81 +0.77%

Sell at Any Price Order Triggers Share Rout for African Insurer @business


Dollar versus Rand 6 Month Chart INO 14.2273


Egypt EGX30 Bloomberg +11.33% 2016


Nigeria All Share Bloomberg -13.47% 2016


Ghana Stock Exchange Composite Index Bloomberg -6.12% 2016

Yields on the country’s $1.25 billion debt due from 2027 rose by 4
basis points to 11.52 percent by 2:14 p.m. in Lusaka, the capital. The
kwacha declined 0.3 percent to 9.29 per dollar. Moody’s on Tuesday cut
its rating on Zambia’s Eurobonds to B3 from B2.

Kenya’s central bank has declared a “new normal” in what it expects of
lenders and its own supervision and announced that Kenya Commercial
Bank will manage the reopening of Chase Bank, which was put into
receivership a fortnight ago.

Patrick Njoroge, governor of the Central Bank of Kenya, said lenders
in east Africa’s largest economy would no longer be able to hide
behind “fuzzy numbers and creative accounting”. Such practices have
led to Mr Njoroge putting three banks into receivership since he took
office last June while the police are investigating six executives at
a fourth bank.

The tighter supervisory regime has triggered a flight to larger banks
by depositors and prompted Mr Njoroge to urge smaller institutions to
merge or seek strategic investors. More than half a dozen have had to
raise their allocations for non-performing loans significantly as they
come under closer scrutiny by the regulator.

Kenya has 42 banks for a population of 40m, making it one of the most
densely banked countries in Africa. Analysts believe consolidation
will involve up to 10 smaller banks in the medium term. Nigeria, in
contrast, has 22 banks serving its population of 180m.

“The new normal will require following the law, in terms of banking
practices, in the requirement of strong governance, of responsibility,
of [our] supervision, and transparency,” Mr Njoroge said.

Adesoji Solanke, African banking analyst at Renaissance Capital, was
“broadly supportive” of the central bank’s efforts to clean up the
industry. However he said in a note on Wednesday that he would “like
to see more clarity provided upfront on the steps being taken”,
particularly in relation to the results of an “IT audit and … the
remedial steps to be taken at each bank”.

Mr Njoroge said KCB, Kenya’s largest bank by assets, would oversee the
reopening of Chase by next Wednesday and would have the option to take
a majority stake in the lender that specialises in servicing small and
medium-sized enterprises. “They will conduct a detailed due diligence
to determine the details” of any transaction,” the governor said.

The receivership lasts a year but one person familiar with the due
diligence said a decision could be expected “within a few months”.
“There are still a lot of stones to turn over and we have no idea
what’s under them,” the person said.

Patrick Njoroge, governor of Kenya's central bank, pauses during a
Bloomberg Television interview in Cape Town, South Africa, on Friday,
Nov. 27, 2015. Kenya is ready to take action to protect the economy
from potential market turmoil when the U.S. begins raising interest
rates, having built up enough buffers to prepare for the event,
Njoroge said. Photographer: Halden Krog/Bloomberg

Joshua Oigara, KCB’s chief executive, declined to comment on the
central bank’s announcement. KCB said a statement would be released
“in due course”. The central bank said it would help provide liquidity
to manage Chase’s reopening.

Chase, the country’s 11th largest lender with assets of about Ks140bn
($1.3bn), was placed in receivership after a run on its deposits
triggered partly by an announcement that the directors were making
loans to themselves larger than the bank’s working capital. Mr Njoroge
said the central bank received nine “expressions of interest” to
manage Chase, including two from foreign banks.

Mr Solanke said Chase would be a good fit for KCB, which is looking
for new acquisitions, because Chase is strong in SME and micro
lending, areas that are not among KCB’s strengths.

KCB is hoping to win approval at its annual meeting next week to raise
Ks10bn in a rights issue.

Conclusions

From yesterdays Wrap-Up

KCB is sitting in Pole Position, its able to drive a hard bargain in
this whole process of consolidation and most importantly it is also
acting in the National Interest. It marks a coming of Age of the Bank.

Tier 3 Banks are finding themselves at the Bleeding Edge of this move
to a more ''rules-based'' System. Years of resisting increased Capital
requirements, has meant that these Tier 3 Banks are pirouetting their
businesses on ''wafer-thin'' capital. Recent Events [Dubai Bank,
Imperial Bank, National Bank and Chase Bank] now means Investors and
Depositors are placing considerably less credence on the accounts as
presented. Then in a ''Double-Whammy'', Depositors have embarked on a
Deposit Flight to Quality further undercutting them. Without
Shareholders now stumping up bucketloads of Capital, these Banks are
in effect now ''Zombie'' Banks. The Process of Consolidation is now
market-led. I appreciate the Authorities are keen to keep this orderly
and not allow it to turn disorderly. The important Point for the
Authorities is not to provide a blanket ''Put'' Option and to erect a
Firewall in the right place. The Central Bank Governor has a
fiendishly difficult Brief.

Kenya’s forex reserves have shot up $440 million (Sh44.5 billion) from
the beginning of the year to hit $7.51 billion (Sh760 billion) as
favourable macroeconomic conditions led to higher forex inflows and
lower outflows.

Central Bank of Kenya (CBK) dollar reserves are now at a 15 month-high
covering 4.89 months’ worth of imports. At the beginning of this year
the country had 4.5 month cover at $7.07 billion.

“The exchange rate has been stable, while there is the impact of lower
oil prices that have improved balance of payments. We see the current
account deficit this year closing at eight per cent of GDP (gross
domestic product).”

Nairobi All Share Bloomberg +0.80% 2016


146.87 +0.44 +0.30%

This is a chart Break-Out right here. Safaricom is +7.36% in 2016


@KCBGroup share price data here at a 2016 closing High.


Nairobi ^NSE20 Bloomberg -2.51% 2016


3,939.50 +4.92 +0.13%

Every Listed Share can be interrogated here

Members of the disbanded Communications Authority of Kenya (CA) board
used their positions to solicit bribes and falsify mileage allowance
claims, director-general of the regulator Francis Wangusi has said.

Mr Wangusi’s allegations are echoed by Mr Ngene Gituku, the
authority’s chairman, who on Friday at a press briefing said the
regulator has evidence to support the claim that a board member went
to Airtel seeking bribes to quash demands for a controversial Sh2.1
billion licence fee.

Conclusions

This is a Given.