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Macro Thoughts

Home Thoughts

Etymology[edit]
From Latin Alcyone, daughter of Aeolus and wife of Ceyx. When her
husband died in a shipwreck, Alcyone threw herself into the sea
whereupon the gods transformed them both into halcyon birds
(kingfishers). When Alcyone made her nest on the beach, waves
threatened to destroy it. Aeolus restrained his winds and kept them
calm during seven days in each year, so she could lay her eggs. These
became known as the "halcyon days," when storms do not occur. Today,
the term is used to denote a ​past period that is being remembered for
being happy and/or ​successful.

Noun[edit]
halcyon days pl (plural only)

Period of calm during the winter, when storms do not occur.
(idiomatic) A period of calm, often nostalgic: “halcyon days of yore”,
“halcyon days of youth”.
c.1591 – William Shakespeare, Henry VI, Part 1
Expect Saint Martin's summer, halcyon days, / Since I have entered
into these wars.

c.1880 – Ambrose Bierce, On a Mountain
And, by the way, during those halcyon days (the halcyon was there,
too, chattering above every creek, as he is all over the world) we
fought another battle.

1891 – Walt Whitman, Leaves of Grass, Book XXXIV
Then for the teeming quietest, happiest days of all!
The brooding and blissful halcyon days!

I have been at home on my own the last few nights. The Ladies are all
still in London. I moved some of my Parents furniture from Mombasa
including their 4 poster bed and because of one thing and another i
ended up sleeping in their bed. I had made up the room for my Father.
My Mother as never felt so close to me as she has these last few
nights.

This is the New Normal.

NORTH KOREA can be as confusing as it is alarming. It is a hereditary
Marxist monarchy. It has the world’s youngest supreme leader and also
its oldest. The reigning tyrant, Kim Jong Un, is in his 30s; and his
grandfather, Kim Il Sung, is the “eternal president” despite having
died in 1994. To celebrate grandpa Kim’s birthday on April 15th, his
grandson ordered warplanes to fly past in a formation spelling out his
age: 105. He also ordered a gigantic parade, with goose-stepping
soldiers and missiles on trucks. A male-voice choir belted out “Peace
is guaranteed by our arms”, even as the regime threatens to rain
nuclear destruction on its enemies and is building a missile designed
to reach the continental United States.

Dealing with the bellicose junior god-king will be one of Donald
Trump’s trickiest tasks. It will also be the first big test of how he
handles relations with China, which are shifting as the rising
superpower challenges the Pax Americana in Asia (see our special
report). There are no good options, but arriving at the least-bad ones
will require understanding both the regime and the Asian geopolitical
jigsaw into which it fits. It will also require patience. Ominously,
Mr Trump says he has little when it comes to North Korea, and his
vice-president, Mike Pence, says that “all options” are on the table.

a pre-emptive strike on North Korea would be reckless beyond belief
(see article). Its nuclear devices are hidden, possibly deep
underground. Its missiles are dispersed on mobile launchers. Tokyo is
just across the Sea of Japan. Seoul, the capital of peaceful,
capitalist South Korea, is only a few miles from the border. Northern
artillery and conventional missiles could devastate it; a conflict
could rapidly turn nuclear and kill millions.

If Mr Kim were to believe that an American attack is imminent, he
might order his own pre-emptive nuclear attack, with disastrous
consequences. So Mr Trump should cool his rhetoric immediately.

For all his eccentricities, Mr Kim is behaving rationally. He watched
Muammar Qadaffi of Libya give up his nuclear programme in return for
better relations with the West—and end up dead. He sees his nuclear
arsenal as a guarantee that his regime, and he, will survive. (Though
it would be suicidal for him to use it.) Mr Trump can do little to
change his mind. Economic sanctions that harm his people will not
spoil his lunch. Cyber-attacks, which may account for the failure of
some recent missile launches, can slow but not stop him. America can
solve the Korean conundrum only with China’s help.

China has leverage over Mr Kim. It accounts for 85% of North Korea’s
foreign trade and could shut off its oil supply. But its interests are
not the same as America’s. North Korea is its ally. China’s leaders do
not like the Kim regime, but they do not wish to see it collapse and
North Korea reunite, German-style, with the democratic South. That,
China fears, would mean the loss of a valuable buffer. There are
28,500 American troops stationed in the South; China does not want
them on its border.

The crucial message for Mr Kim as for his predecessors is that, if the
North were to use its nukes, the regime would be obliterated. In the
long run, reunification is inevitable and desirable. Meanwhile, the
junior god-king can be deterred.

The piece de resistance in a geopolitical context last week was the
news that the US’ policy of ‘’strategic patience’’ with North Korea
was over and an Armada [“We are sending an armada, very powerful. We
have submarines, very powerful, far more powerful than the aircraft
carrier.” President Trump] is now parked off the Korean Peninsula.

Machiavelli argued that sometimes it is “a very wise thing to simulate
madness” (Discourses on Livy). The madman theory was a feature of
Richard Nixon’s foreign policy. Other than both having tiny little
hands and both possessing nuclear weapons, we are dealing with two
principals whose very raison d’être appears to be escalation.

“If the U.S. provokes recklessly, the revolutionary forces will take
an annihilating strike,” Choe Ryong Hae, a senior regime official,
said. North Korea is ready for a nuclear or full-scale war if the U.S.
wants it, he added. Saddam Hussein who was prone to a similar
hyperbole did not possess a nuclear weapon. This is the difference.
Furthermore, it is impossible to model how ‘’Little’’ Kim is going to
react to what he must perceive as an existential threat to him and his
Regime.

FAR away in distant lands lies the Hermit Kingdom. This land is ruled
by The House of Kim and its capital is Pyongyang. The first and
‘Eternal’ President was Kim Il-sung and his successor Kim Jong-il
whose designated successor is Kim Jung-un. They all have had tiny
little hands like the Elves in the Elves and the Shoemaker.And this
country has nuclear weapons and on its border with its neighbour South
Korea sit 25,000 American soldiers. Last week the North shelled the
South and issued all kinds of threats. “The DPRK (North Korea) will
deal a merciless military counter-attack at any provocative act of
intruding into its territorial waters in the future.’’ President Obama
sent the USS George Washington to the Yellow Sea and now here we sit
watching developments and trying to model what is happening and what
might happen? In reality, we are actually navigating in uncharted
waters. The media keeps chanting like a mantra, China will rein North
Korea in. It is not in their Interests to have a mad dog like North
Korea as an ally. And whether its the BBC, The New York Times or Radio
France. I venture this is an embedded narrative fallacy and that most
Western commentators are apparently popping Qaaludes. Let me tell you
why. China is taking a much more forward position and particularly in
Asia, its near abroad. I believe North Korea is the perfect instrument
[the Attack Dog] for China to show those who choose to operate outside
their sphere of influence [and by extension, in the US’] that there
will be a very heavy price to pay.I venture that the Chinese are quite
happy to see those 25,000 US soldiers run right into the sea and we
need to grow up [as does the media] and see it for what it is. North
Korea and China see a weak and tottering President Obama and this
flashpoint represents the beginning of a roll back of US Power. And
you know the battlefield is not just the military one. Its a financial
one as well. Did you know the South Korean President has a military
war room and an economic war room and they say he spends more time in
the economic war room. Think about that for a moment. By this time,
you know I consider one of the finest books about trading and
economics one written by Edwin Lefevre called Reminiscences of a Stock
Market Operator and in that book he says ‘The Tape is your Telescope’
and it is. And I follow all kinds of tapes and one of the tapes is the
South Korean Stock Market called the KOSPI. About 5 working days
before this blew, someone sold more than $1b worth of South Korean
equities seconds before the close. Who was that? Not one commentator
has connected those dots. Just because China does not flex its ability
does not mean it cannot. If you have the power to do something and
have not that does not make you less powerful.

The arrest of WikiLeaks founder Julian Assange is now a “priority” for
the US, attorney general Jeff Sessions has said.

Conclusions

He could turn ''rogue''

A tide of anti-establishment sentiment is surging in the advanced
industrial countries, and Corbyn and his associates need to use this
to the advantage of Labour.

Conclusions

Jeremy Corbyn is as electable as Neil Pinnock.

Analysis of a genuine Boeing 777 wing flap has reaffirmed experts'
opinion that a missing Malaysian airliner most likely crashed north of
an abandoned search area in the Indian Ocean, officials said Friday.

The $160 million search for Malaysia Airlines Flight 370 ended in
January after a deep-sea sonar scan of 120,000 square kilometers
(46,000 square miles) of ocean floor southwest of Australia failed to
find any trace of the Boeing 777 that vanished with 239 people aboard
on March 8, 2014. But research has continued in an effort to refine a
possible new search.

Australian government oceanographers had obtained a wing flap of the
same model as the original and studied how that part drifted in the
ocean, the Australian Transport safety Bureau said in a statement.
Previous drift modeling used inexact replicas.

The new analysis confirmed findings released in December that the
airliner had likely crashed north of the searched area.

The December findings were based in part on drift analysis of six
replicas of a piece of Flight 370 known as a flaperon which was found
on Reunion Island in the west Indian Ocean in July 2015.

Conclusions

Picking up the signal through the noise of our world in 2014 is no
easy thing. In fact, my view is the new normal is a very arrhythmic
world. When I plugged ‘’arrhythmia’’ into my computer, it threw up
this;

‘’For years he’d been studying the phenomenon of chaos, of which an
arrhythmic heartbeat was a perfect example’’

His excellency Johan Borgstam told me the signal announcing this new
arrhythmic normal was the disappearance of the MH370. Since then
planes have been falling out of the sky like flies. And the
uncertainty around MH370 and MH17 which is sharpened by the way the
story is seemingly turned on and off took me back to Don Delillo

‘’”We are not witnessing the flow of information so much as pure
spectacle, or information made sacred, ritually unreadable. The small
monitors of the office, home and car become a kind of idolatry here,
where crowds might gather in astonishment.’’

Euro 1.0725
Dollar Index 99.82
Japan Yen 109.30
Swiss Franc 0.9988
Pound 1.2813
Aussie 0.7536
India Rupee 64.575
South Korea Won 1133.50
Brazil Real 3.1484
Egypt Pound 18.0990
South Africa Rand 13.1486 [stunning rebound - don't expect it too last]

The purest geopolitical proxy in the markets is Gold. As Ben Bernanke
once said People hold gold “As protection against what we call tail
risks: really, really bad outcomes.” Gold closed the week at a six
month high of $1,285.00 and has the potential to go ‘’nuclear’’

Brent, the benchmark for more than half the world’s oil, was trading 5
cents higher at $53.04 a barrel on the London-based ICE Futures Europe
exchange at 9:56 a.m. Singapore time. West Texas Intermediate, the
U.S. marker, was at $50.77 a barrel on the New York Mercantile
Exchange.

Prices dropped on Wednesday after Energy Information Administration
data showed U.S. gasoline supplies increased for the first time since
February and crude production rose for a ninth straight week.
Inventories fell for a second week, after surging to a record last
month.

“The sell-off occurred an hour after the release of this U.S. data and
accelerated as prices traded through their 50 and 100 day moving
averages, a repeat of the March 7 and October 29 sharp decline in
prices,” the analysts wrote. The “decline also featured an increase in
open interest, suggesting that like in these previous instances, new
shorts were the drivers of the move lower.”

New York cocoa futures slumped to a 9-1/2-year low on Wednesday, and
the London market dropped to its lowest since 2013.

Chocolate addicts, it’s probably a good time to start stocking up. The
treats may not be this cheap much longer.

Cocoa’s 42 percent slump over the last 12 months makes it the worst
performer among 34 commodities tracked by Bloomberg. Prices tumbled as
output increased in Ivory Coast, the world’s top grower, and the
decline has pushed down retail prices for chocolates.

Emerging Markets

Frontier Markets

Two political accords and three prime ministers later, and four months
after Congolese President Joseph Kabila was due to leave office at the
end of his second mandate, credible elections and political stability
in the Democratic Republic of Congo (DRC) appear more elusive than
ever.

The 31 December political accord, brokered in good faith by the
Catholic Conférence Episcopale Nationale du Congo (Cenco), remains the
only viable blueprint for political stability in the DRC. It calls for
elections by the end of 2017, no third mandate for Kabila and the
formation of a new government, led by a prime minister issued from the
ranks of the Rassemblement de l’opposition (Rassop), the country’s
largest political opposition alliance – led until his death on 1
February by Etienne Tshisekedi.

The 31 December political accords were based on the principles of
consensus, inclusivity and transparency; the government that would
emerge would draw its legitimacy from these principles, and the
credibility of the elections it would organise would be based upon
them.

But getting the disparate parties to implement the 31 December accord,
in letter and in spirit, was always going to be difficult, mainly
because it involved concrete concessions from the ruling presidential
alliance, the Majorité Présidentielle (MP), which has been the
architect of the glissage – or delaying strategy that has allowed
Kabila to remain in office past December 2016.

Kabila and his elite have over the past six months been able to cobble
together a semblance of co-operation and compliance, and have avoided
looking like the only spoiler in the room. From their perspective,
there is no good reason to submit to another round of talks which
could involve additional painful concessions.

Despite this, pressure from the international community, the AU and
regional bodies like the Southern Africa Development Community and the
International Conference on the Great Lakes Region to abide by the 31
December accord must be maintained if the DRC is not to slide into
full-scale political chaos.

Conclusions

The cryptic and oftentimes enigmatic President Kabila is the Puppet
Master par excellence.

Zambia’s president said he may declare a state of emergency in
Africa’s second-biggest copper producer because of turmoil following
the arrest of the nation’s main opposition leader on treason charges.

“Why are they burning markets? Why are they burning court houses? Why
are they burning government buildings?” Edgar Lungu said in a speech
in Livingstone, southern Zambia, that was broadcast on his Facebook
page. “If you force us to call a state of emergency we will go that
way.”

Political tensions have been high since Zambia’s general elections
last year, the outcome of which was disputed by the opposition. They
escalated further with opposition leader Hakainde Hichilema’s April 12
arrest, which took place after a convoy he was traveling in failed to
pull off the road for Lungu’s motorcade.

Fires have been reported at two courthouses, a university and two
markets in the days since. Lungu said Thursday that a state of
emergency could be applied only to areas where there is “trouble.”

Hichilema first appeared in court on April 18, with proceedings
adjourned three times and his next appearance set for April 26.
Treason suspects aren’t allowed bail, and the maximum penalty is
death.

Conclusions

Lungu is very adversarial

Tens of thousands of Chinese have left Angola because of the oil slump
that’s hurt business and halted construction projects, according to
the head of a commerce group.

The number of Chinese workers and business owners has fallen to about
50,000, a quarter of what it was four years ago, Xu Ning, the chairman
of the Angola-China Industrial and Commerce Association, said in an
interview in the capital, Luanda. Those who stayed are recovering from
a “disastrous” 2016, with most Chinese-led construction projects still
halted, he said.

“Last year was very bad, we lost a lot of money,” Xu said. “Many
closed down their businesses and went back to China, crying.”

Tens of thousands of Chinese have left Angola because of the oil slump
that’s hurt business and halted construction projects, according to
the head of a commerce group.

The number of Chinese workers and business owners has fallen to about
50,000, a quarter of what it was four years ago, Xu Ning, the chairman
of the Angola-China Industrial and Commerce Association, said in an
interview in the capital, Luanda. Those who stayed are recovering from
a “disastrous” 2016, with most Chinese-led construction projects still
halted, he said.

“Last year was very bad, we lost a lot of money,” Xu said. “Many
closed down their businesses and went back to China, crying.”

South Africa All Share Bloomberg +3.64% 2017
http://www.bloomberg.com/quote/JALSH:IND

Dollar versus Rand 1 Month Chart INO 13.1507 [what a rebound
@SAPresident probably having a chuckle]
http://quotes.ino.com/charting/index.html?s=FOREX_USDZAR&v=d1&t=c&a=50&w=1

Nigeria All Share Bloomberg -5.90% 2017
http://www.bloomberg.com/quote/NGSEINDX:IND

Ghana Stock Exchange Composite Index Bloomberg +10.7% 2017
http://www.bloomberg.com/quote/GGSECI:IND

Malawi cracks down on food smugglers seeking more profit
http://af.reuters.com/article/topNews/idAFKBN17M0TM-OZATP

Malawi has tightened its border controls to stop profiteers smuggling
much-needed maize out of the country in search of higher prices.

Zimbabwe's tax agency said on Thursday it had collected $862 million
in the first quarter of 2017, exceeding its target by 6 percent
http://af.reuters.com/article/commoditiesNews/idAFL8N1HS30D

"As a party, we will not tolerate violence. As president, I will also
not tolerate violence and anybody who engages in acts of violence will
be dealt with in accordance with the law, irrespective of who they
are," Kenyatta told a press conference in Nairobi.

National governments remain the single largest source of revenue for
news organizations in Africa. In Rwanda, for example, a staggering
85-90% of advertising revenue comes from the public sector.

In Kenya, it’s estimated that 30% of newspaper revenue comes from
government advertising. In 2013, the government spent Ksh40 million
($386,922) in two weeks just to publish congratulatory messages for
the new President Uhuru Kenyatta.

But with a general election coming up this year in August, the Kenyan
government has decided to stop advertising in local commercial media.

In a memo, reportedly sent to all government accounting officers, the
directive was given that state departments and agencies would only
advertise in My.Gov— a government newspaper and online portal.
Electronic advertising would only be aired on the state broadcaster,
the Kenya Broadcasting Corporation.

It’s difficult not to characterize the withdrawal of state advertising
from commercial media as punitive. Without this revenue stream
newspapers are likely to fold. Worse still, efforts to withdraw
government advertising from commercial media can be interpreted as a
worrying way to undermine the freedom of expression.

Starving news media of revenue is a means of indirect state control.
This has been the case in countries such as Serbia, Hungary, Namibia,
Lesotho and Swaziland.

STANDING on a muddy patch of grass in Mathare, a district in the
eastern part of Nairobi, Kevin surveys his handiwork. From an
electricity pylon, a thick bundle of crudely twisted wire hangs down
into a tin-roofed shack. From there it spreads to a dozen more. Single
wires run perilously at eye level over open sewers, powering bare
light-bulbs, kettles and blaring speakers. In exchange for a
connection, Kevin and six of his friends collect 200 shillings per
month each (about $2) from about a hundred shacks in his corner of the
slum. To protect the business, the gang pays off police officers and
intimidates the competition. The connections, Kevin insists, are
cheaper than official ones, and safer too. The rotting body of a fried
rat near one of the lines suggests otherwise.

So goes the provision of public services in Nairobi’s poorest
districts. These warrens of shacks and crudely built apartment blocks
are home to 40% of the city’s population, according to one recent
World Bank survey (others put the figure even higher). As the city’s
population has exploded—from a third of a million at independence in
1963 to over 4m now—so too have the slums. Across Africa, they are the
primary way by which hundreds of thousands of people have escaped even
greater poverty in the countryside. By 2030, half of Africa’s
population will live in cities, up from a third in 2010. According to
the UN, two-thirds of that growth will take place in slums. Between
1990 and 2014, the continent’s slum population more than doubled, to
some 200m people. Finding ways to improve slums will be one of the
most pressing problems of the 21st century for African governments.

Slums grow because they provide something poor people need: affordable
housing near to work, schools and public transport. Perversely, for
such a poor continent, African cities tend to be sprawling and
car-dependent. From Lusaka to Lagos, suburban housing estates and
shopping malls, seemingly transplanted from Houston or Atlanta, are
springing up at the edge of cities. But the vast majority of Africans
cannot afford cars. In Nairobi slums are among the very few places
close to jobs where it is possible to go shopping, watch a film and
get a street-side meal, all without having to get into a vehicle.

The need to be near jobs helps explain why slums often sit next to
staggering wealth. In Nairobi Mathare is wedged between Eastleigh, a
bustling Somali commercial hub, and Muthaiga, a luxurious country club
popular with white Kenyans. Alexandra in Johannesburg, a township of
tin shacks, is at the edge of Sandton, the city’s poshest office
district. In Lagos, a megacity where two-thirds of people live in
slums, Makoko, a collection of shacks built on stilts in the lagoon,
sits under the city’s Third Mainland Bridge, across from which new
office buildings rent for vast sums.

Africa’s slums are full of enterprising people. But they are also
deeply dysfunctional places, where much of the population lives in a
Hobbesian world of exploitation. It is not just electricity that is
provided by violent cartels; so is water, rubbish collection and
security. The state scarcely enters: in most slums, health care and
education are provided privately or by charities, if at all. Diseases
such as cholera and HIV are rife. There is often little in the way of
a legal system to protect property rights. Instead, well-connected
landlords make fortunes renting tiny patches of land to people who
have nowhere else to go.

And slums are violent. In Nairobi the cartels fight vicious turf wars
with each other. Some, like the Mungiki, a Kikuyu mafia, are organised
on ethnic lines. In Lagos slums like Makoko are run by local chiefs
called “baales”, who dress like mob bosses and expect tributes from
residents. Cops are unwilling to go in, except occasionally to extract
bribes or to shoot a suspect. Politicians do enter: an abundance of
unemployed young men are easy recruits to gangs raised to intimidate
opponents.

Perversely, slums are also expensive. In Mathare options range from a
shared space in a wooden shack on top of an open sewer with no water
or electricity for 700 shillings per month ($7) to a relatively clean
room in a compound with a light bulb and a shared outside toilet, for
3,000. That may seem cheap, but slum landlords are doing much the same
as Western consumer businesses do in Africa: packaging their product
up in tiny enough bites for the poor to afford it. And just as a
hundred tiny sachets of washing powder cost more than a single large
box, so too with land. According to Jacqueline Klopp, a researcher at
Columbia University, per square foot of land rented, Nairobi’s slum
residents could well pay higher rents than some of the city’s wealthy
expatriate workers.

If government treated slums as real city districts they might improve.
In Mathare there is some reason to be hopeful. Though shacks still
predominate, some taller buildings have been going up, with more
space. In his shack, Crispin Adero, a 20-year-old construction worker,
has plastered the walls with posters of Manchester City football
players. Music plays from a television connection to a satellite
tuner. A ladder leads to an upstairs room, which Mr Adero shares with
his wife. He built it himself, having made a deal with his landlord to
share the costs. Life, says Mr Adero, “is OK.” But not everyone has
such luck. And outside, sewage still runs in the street.

Nairobi All Share Bloomberg +0.33% 2017
http://www.BLOOMBERG.COM/quote/NSEASI:IND

With a market value of Sh10 billion, the Equity shares represent about
12 per cent of Britam’s total assets of Sh83.6 billion as of December
2016.

3,149.33 +19.55 +0.62%

Every Listed Share can be interrogated here
http://www.rich.co.ke/rcdata/nsestocks.php

@Safaricomltd is unchanged Year to Date are price data here
http://www.rich.co.ke/rcdata/company.php?i=NTU%3D

@KCBGroup is +18.26% in 2017 share price data
http://www.rich.co.ke/rcdata/company.php?i=MjE%3D

.@KenyaAirways are price data +6.83% 2017
http://www.rich.co.ke/rcdata/company.php?i=OA%3D%3D

Sasini Tea and Coffee is +45.83% in 2017
http://www.rich.co.ke/rcdata/company.php?i=NA%3D%3D