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Monday 27th of November 2017 |
Morning, Africa |
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If you are tracking the NSE Do it via RICHLIVE and use Mozilla Firefox as your Browser. 0930-1500 KENYA TIME Normal Board - The Whole shebang Prompt Board Next day settlement Expert Board All you need re an Individual stock.
The Latest Daily PodCast can be found here on the Front Page of the site http://www.rich.co.ke
Macro Thoughts |
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Bitcoin "Wow! What a Ride!" Africa |
On the 30th of December 2016, I wrote that My Conviction Trades for 2017 [see http://bit.ly/2vQTv9T] were as follows
1. Long BITCOIN. 2. Long BITCOIN short Gold
Bitcoin started the year just above $1,000, and the overall growth now is approaching 900 percent. The cryptocurrency’s market capitalization has reached $145 billion [the total crypto currency market cap has soared to almost $275 billion]. Bitcoin is more valuable than major corporations like Siemens, Mastercard, British American Tobacco or McDonald’s. BITCOIN has been the top-performing currency every year since 2010, except 2014 and this Year at +900% the return has been parabolic [off the charts]. The Parabola was described thus 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.’’
If you spend Your life deeply immersed in the markets, then it is necessary to sniff out these parabolic moves. And its Better to do Right than Say right as Edwin Lefevre noted nearly a century ago.
Or as T.S Eliot said in The Hollow Men
Between the idea And the reality Between the motion And the act Falls the Shadow For Thine is the Kingdom
Lets return to the subject at hand. On the 3rd of March this year, the Price of #Bitcoin crossed the Gold price for the first time ever [refer my Trade 2. for the year]. Bitcoin hit $1,900 on 22nd May and $2900 on 7th June. In September Jamie Dimon of JP Morgan briefly stemmed its rise when he said 'you can't have a business where people can invent a currency out of thin air'. By 1st November, Bitcoin was surging again after the Chicago Mercantile Exchange announced the launch of Bitcoin Futures contracts. On November 8th, 'Buy Bitcoin' Overtook 'Buy Gold' as an Online Search Phrase. As I file this report on Sunday morning [and the grass is a luscious green after the short rains, outside my window], Bitcoin is all set to burst through $9,000,00. The value of the second largest cryptocurrency Ethereum also smashed an all-time high of $485 on Saturday. Ethereum’s market capitalization is approaching $46 billion, and its gains this year have reached 5,000 percent. At the start of 2017, you could buy one token for $8.27, about 58 times less than the current price. This, you will agree, is mind-boggling inflation. In my experience, when I have found myself riding a Tiger by its Tail, the key issue is the getting off and not trying to run the Trade for every penny. I got off this Tiger. Interestingly, Bitcoin traded as high as $13,499.00 in Zimbabwe last week, but that speaks to the complete dislocation of that economy.
Mr. Novogratz who has raised $500m for a Crypto currency Fund said, "Bitcoin has value because people say it has value." and "Bitcoin you can look at as digital gold." Mr. Gartman said on bitcoin: "this is a market for criminals and millennials" Th mining of bitcoins now uses more electricity than Ireland or Nigeria. Our Central Bank Dr. Njoroge said he thinks bitcoin a pyramid scheme JP Morgan's Jamie Dimon called bitcoin a "fraud" in September and said it "won't end well." The Guardian spoke about the 8 fold price inflation and pronounced
''Since it is only widely used as a currency in drug deals or for ransom payments, there is either a huge boom in criminal activities outside the world of cryptocurrencies, or one within unregulated exchanges where these tokens are traded''
''One of the few men to get out in time before the Wall Street crash of 1929 did so – legend has it – because he was offered a stock tip by the boy who shined his shoes. He immediately sold all his holdings. If the mania for gambling on the stock market had reached down to the children on the streets, the bubble must have been due to pop at any moment. The corresponding moment for the cryptocurrency bubble will only be discernible in retrospect, but we have some pretty strong candidates already. The endorsement of one project by the reality TV star Paris Hilton has already happened''
There are many cryptocurrency schemes which are sold on the same grounds as the greatest South Sea Bubble prospectus: “For carrying on an undertaking of great advantage, but nobody to know what it is.”
My Investment Thesis at the start of the year was that Bitcoin was going to get main-streamed in 2017. It has main-streamed beyond my wildest dreams, therefore, I am now sidelined.
Let me leave you with Hunter S. Thompson '' “Life should not be a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in broadside in a cloud of smoke, thoroughly used up, totally worn out, and loudly proclaiming “Wow! What a Ride!”
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12-SEP-2016 :: Mirrors on the ceiling, The pink champagne on ice Africa |
A lot of risk calculations are based on Value at Risk (VAR). Essentially, you overlay a volatility measure over the portfolio, and you calculate how much money is on the line. Central banks have suppressed volatility therefore in real terms; investors are now holding bigger positions at these current artificially suppressed levels. If volatility spikes, positions are going to be reduced en masse. Or to put it another way and to borrow the lyrics from the Eagles Hotel California:
Mirrors on the ceiling, The pink champagne on ice And she said “We are all just prisoners here, of our own device” Last thing I remember, I was Running for the door I had to find the passage back To the place I was before “Relax,” said the night man, “We are programmed to receive. You can check-out any time you like, But you can never leave! “
What is clear is that we are at the fag-end of this party.
Home Thoughts
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Lake Elementaita is derived from the Masaai word muteita, meaning "dust place" Africa |
Elmenteita is derived from the Masaai word muteita, meaning "dust place", a reference to the dry and dusty quality of the area, especially between January and March. The town of Gilgil is located near the lake. In the south-to-north sequence of Rift Valley lakes, Elmenteita is located between Lake Naivasha and Lake Nakuru. The major Nairobi-Nakuru highway runs along the nearby escarpment affording motorists a spectacular vista towards the lake.
At the southern end of the lake lie the "Kekopey" hot springs, in which the Tilapia grahami breed. Very popular for bathing, the local Maasai claim that it can cure AIDS. The reed beds nearby are fishing grounds for night herons and pelicans.
The Lake Elmenteita area saw its first white settlement when Lord Delamere (1879-1931) established Soysambu, a 48,000-acre (190 km2) ranch, on the western side of the lake. Delamere gifted the land on the other side of the lake to his brother-in-law, the Honorable Galbraith Lowry Egerton Cole (1881-1929), part of whose "Kekopey Ranch", where he is buried, is preserved today as the Lake Elementaita Lodge.
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Bernie Ecclestone on mischief-making and why Putin should run Europe @FT Africa |
Ecclestone is used to calling the shots. Until the start of this year, he was the chief executive of Formula One — ringmaster of the global car-racing series he transformed into one of the world’s most-watched sports. His four decades at the helm ended dramatically in January when the US group Liberty Media, controlled by billionaire John Malone, completed a $8bn takeover of F1’s parent company. Ecclestone was shunted into the role of “chairman emeritus”. What does that involve?
“I’m an adviser to the board,” he says. And what has his advice been?
“They have never asked,” he says with a thin smile. It’s an honorary title designed to match his exalted status.
“I’ve got the highest position there is,” he jokes. “So high that when I look down, I can’t see anything.”
It has been quite a ride for the son of a Suffolk fisherman and housewife who became a used-car salesman as a teenager. The wheeler-dealing provided the capital in 1971 to buy Brabham, an F1 team, at a time when the sport was merely a pastime for motoring enthusiasts. Through the 1970s, he negotiated deals with circuits and television companies on behalf of teams, selling F1 as a package, rather than race by race. Attracted to the glamour, sponsors opened their cheque books.
In the 1990s, Ecclestone was nominated for a knighthood, with character references from Nelson Mandela and Silvio Berlusconi. His stewardship of F1 has helped to create “motorsport valley” in the south of England where many F1 teams are based, employing thousands. Other British businesspeople have been recognised for less, but civil servants balked at ennobling him. A man who still shocks his country’s political establishment — he voted Leave in last year’s Brexit referendum and believes that US president Donald Trump has “done a lot of good things for the world” — has been rejected by it.
“Honestly, I think the guy who should be running Europe, impressed me more than anything, is Mr Putin because he’s a guy that says he’s going to do something and does it . . . [He’s] a first-class person.”
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US foreign policy in the Middle East doesn't exist anymore Law & Politics |
Time was when a mere statement from a secretary of state – let alone a US president – would have the phones jangling across the Middle East. The Reagans, Clintons, Bushes or Obamas of this world actually did have an effect on the region, albeit often malign, US leaders being poorly briefed and always in awe of Israel (not to mention its power to destroy political lives in Washington). But today, who is calling the shots across the old Ottoman Empire?
Well, just take a look at Putin and Assad and Erdogan and Sissi and Macron and Rouhani. These are the men who are currently holding the headlines, either declaring Isis dead or beaten or Syria “saved” or the Kurds “terrorists” or rescuing Prime Minister Saad Hariri from his hostage home in Saudi Arabia – although now we’ve all got to believe that he wasn’t detained and didn’t really intend to resign or did resign but doesn’t want to resign any more. And rather oddly, Mohamed bin Salman looks less and less influential, a Gulf Crown Prince whose attempts to destroy Yemen, Assad’s Syria, Qatar and Al Jazeera and even poor Lebanon look more and more like a child in a tantrum, throwing his toys around in an attempt to frighten the neighbours – including the one neighbour he will not fight, the Islamic Republic of Iran.
Truly, the US has turned into the Cheshire Cat, sometimes quite disappearing from our vision with the exception of various bits and bobs of American special forces who pop up to help Kurds and weirdly named militias – all of which appear to have three-letter acronyms – who will be abandoned, betrayed or forgotten in the months to come. Perhaps only the Cheshire Cat’s grin will remain. The Hezbollah, I suspect, is the only armed force in the Middle East which has only one name. And they’re on the “terrorist” list – though not of course in Moscow, where Putin supports the Hezbollah’s ally Bashar.
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Vladimir Putin crowns himself as the king of OPEC @business Law & Politics |
For more than half a century, Saudi Arabia’s oil minister could move markets with a few choice words about what OPEC may decide at its next meeting, generating millions if not billions of dollars of profit for insiders.
Not anymore. While OPEC’s gatherings still influence prices, it’s not Saudi Arabia’s voice that matters most, but the voice of a non-member: Russia, specifically Vladimir Putin.
Since engineering Russia’s pact with the Organization for Petroleum Exporting Countries to curb supplies a year ago, Putin has emerged as the group’s most influential player. As one senior OPEC official put it on condition of anonymity, the Russian leader is now “calling all the shots.”
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Special Report: 'Treacherous shenanigans' - The inside story of Mugabe's downfall Africa |
Inside State House in Harare, Robert Mugabe was in the tightest spot of his 37-year rule. Tanks were on the streets and troops had occupied the state broadcaster, from where the army had announced it had taken control of Zimbabwe.
Mugabe, 93 years old but still alert, remained defiant. The only leader the country had known since independence was refusing to quit.
At a tense meeting with his military top brass on Nov. 16, the world’s oldest head of state put his foot down: “Bring me the constitution and tell me what it says,” he ordered military chief Constantino Chiwenga, according to two sources present.
An aide brought a copy of the constitution, which lays out that the president is commander-in-chief of the armed forces.
Chiwenga, dressed in camouflage fatigues, hesitated before replying that Zimbabwe was facing a national crisis that demanded military intervention.
Mugabe retorted that the army was the problem, according to the sources present. Then the beleaguered president indicated that perhaps they could find a solution together.
The meeting marked the start of an extraordinary five-day standoff between Mugabe and Zimbabwe’s supreme law on one side, and the military, his party and Zimbabwe’s people on the other.
The generals wanted Mugabe to go, but they also wanted a peaceful “coup,” one that would not irreparably tarnish the administration aiming to take over, according to multiple military and political sources.
In late October, Mugabe summoned Chiwenga to a showdown, according to another of the documents, dated Oct. 30. It said Mugabe confronted the army chief about his ties to Mnangagwa and told him that going against Grace would cost him his life.
“Chiwenga was warned by Mugabe that it is high time for him to start following. He mentioned to Chiwenga that those fighting his wife are bound to die a painful death,” the intelligence report said.
At the same meeting, Mugabe also ordered Chiwenga to pledge allegiance to Grace. He refused.
“Chiwengwa refused to be intimidated. He stood his ground over his loyalty to Mnangagwa,” the report said.
After another tense meeting with Mugabe on Nov. 5, Chiwenga left Harare on a pre-arranged official trip and traveled to China, which wields significant influence as a major investor in Zimbabwe.
A day later, Mugabe sacked Mnangagwa as vice president and purged him from ZANU-PF, the liberation movement that Mnangagwa had served since his youth and for which, as a young militant caught bombing a train, he had nearly been executed.
For the generals, Mugabe had gone too far. The military immediately activated a “Code Red” alert, its highest level of preparedness, a military source said.
“China and Russia are after change,” the report said. “They are after change within ZANU-PF as they are sick and tired of Mugabe’s leadership.”
“The two countries are even ready to clandestinely supply arms of war to Mnangagwa to fight Mugabe.”
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Diamonds and the Crocodile: China's Role in the Zimbabwe Coup @Diplomat_APAC Africa |
President Robert Mugabe’s resignation on November 21, 2017 came after a military coup that ended his 37 years of unbroken control over Zimbabwe. Yet the weakness within the Mugabe regime was apparent in the last few years, as two factions within Zimbabwe’s ruling party, the Zimbabwe African National Union, Patriotic Front (ZANU-PF), had been jockeying for the right to succeed the 93-year-old Mugabe. One group, called “Generation 40” or G40, is headed by First Lady Grace Mugabe and backed by younger political leaders Jonathan Nathaniel Moyo and Saviour Kasukuwere. Their competitors, the Lacoste Group, primarily consists of senior independence era leaders; the group is named after former Vice President Emmerson Mnangagwa, who is known by his nom de guerre “crocodile,” acquired during the Rhodesian Bush War against the white minority government. The Lacoste group has been historically close to the Zimbabwean Defense Forces, currently headed by General Constantino Chingewa. While Grace Mugabe’s expensive lifestyle and desire to become her husband’s successor is well known, Mnangagwa is known for his brutality in crushing the Ndebele opposition in the 1980s Gukurahundi and his unswerving loyalty to Mugabe.
The events that started on November 14, when General Chinegwa led a coup to wrest power from President Mugabe, arrest members of the G40, and assure the return of ousted Vice President Mnangagwa (possibly to become president) has been extensively covered by the international press. However, little is known about the international aspects of the coup, specifically the role of China. Despite issuing official denials of such reports, it seems that China supported the coup, at least tacitly. It appears that China was initially closer to the G40 faction, but shifted support to the Lacoste faction because of its ties to the Zimbabwean army and Mnangagwa himself.
Although China has officially denied involvement in the recent coup, it has cultivated deep ties with Zimbabwe’s political leadership since the 1960s-70s Rhodesian Bush War. Mugabe’s ZANU, primarily led and soldiered by the Shona ethnic group, acquired weapons and funding from China. From the 1990s, China continued to increase economic ties with Zimbabwe; it has investments in mining, agriculture, energy, and construction. In 2015, China became Zimbabwe’s top export market and accounted for by far the largest share of foreign direct investment into Zimbabwe (74 percent). The same year, China also promised a $4 billion aid and investment package in 2016, and has pledged $46 million for the building of Zimbabwe’s new parliament building.
China’s ties with the Zimbabwean Army, from which the Lacoste faction draws its strength, are particularly deep. It has sold weapons ranging from small arms to fighter jets and, in an almost symbolic culmination of these ties, China financed the building of Zimbabwe’s new National Defense College, which trains both defense and internal security forces. A parallel aspect of these arms sales, however, has been the alleged diverting of revenues from Zimbabwe’s Marange diamond fields, in which the primary investor is China’s Anjin Investments.
The diamond mines were, in fact, the source of China’s increasing concerns about the Mugabe regime’s indigenization policy, which required 51 percent local ownership of foreign businesses. Although the two Chinese companies, Anjin and Jinan, began operations in 2012 with 51 percent of shares owned by Zimbabweans, the Zimbabwean government integrated them into the state owned Zimbabwe Consolidated Diamond Company (ZCDC) in 2015, which led to vehement public opposition by the Chinese government. The crisis also led to the overall deterioration of China-Zimbabwe relations, and China refused to support Mugabe in his 2016 crackdown on the opposition.
However, the threat to Chinese investments in the diamond mines also hurt the Zimbabwean military, which has reportedly collaborated with these companies under the leadership of General Chiwenga. A 30 percent stake of the aforementioned Anjin Investments, for example, is allegedly controlled by the Zimbabwean Defense Forces through a subsidiary. The Zimbabwean security forces’ broad involvement in the diamond business has especially enriched senior officers associated with the Mugabe regime. Also, during Zimbabwe’s 1998-2002 intervention in Congo’s civil war, Mnangagwa was accused by the UN of using the Zimbabwean Defense Forces to profit from illegally mined diamonds.
After being ousted from his vice presidency by Mugabe in November 2017, Mnangagwa reportedly fled to China. He had cultivated relations with senior members of the Chinese Communist Party, which allegedly go back to the Rhodesian Bush War when China offered the guerrillas both training and weapons. General Chiwenga also visited China from November 8 to 10, on an official trip organized prior to the recent events. During the visit, he met with Li Zuocheng of China’s Central Military Commission, the organization within the Communist Party that controls defense and security policymaking, as well as China’s Defense Minister General Chang Wanquan. Despite China’s denial of any involvement in the recent coup, and announcement of a “wait and watch” approach, Mnangagwa’s presidency with Chiwenga’s backing from the Armed Forces will assure it a firm grip on Zimbabwean politics and economy, assuring China’s interest in regional stability in met.
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In SADC, the interests of ruling parties come first @issafrica Africa |
For the past 10 days, since events in Zimbabwe began to unfold, the Democratic Republic of the Congo’s (DRC) state broadcaster – the Radio-Télévision nationale congolaise (RTNC) – has refused to report on or show images of the situation. It seems the ruling Congolese elite fears that the‘non-coup’, which culminated in Robert Mugabe’s resignation as president on 21 November, might be contagious.
There are indeed many similarities between the two countries. Both are led by presidents who have overstayed their welcome. Congolese President Joseph Kabila has extended his time in office one year beyond the expiration of his mandate, while Robert Mugabe was the only president Zimbabwe had ever known. He was voted out in 2008 only to be saved by his army. Both men are unpopular with their own populations.
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S&P Cuts South Africa Debt Rating, Moody's Issues Warning Africa |
S&P Global Ratings cut South Africa’s local-currency debt score to junk on Friday, while Moody’s Investors Service also threatened to slash its ranking to the same level, raising the risk of a selloff from global indexes.
S&P lowered the country’s local-currency rating one step to BB+, one level below investment grade, and placed it on a stable outlook. Its assessment on South Africa’s foreign-currency debt, which it already considered speculative, was taken down one notch to BB. Moody’s opted to keep both readings on Baa3, its lowest investment grade, but put them on review for possible downgrade.
The reduction by S&P “reflects our opinion of further deterioration of South Africa’s economic outlook and its public finances,” the company said in a statement. “Economic decisions in recent years have largely focused on the distribution -- rather than the growth of -- national income. As a consequence, South Africa’s economy has stagnated and external competitiveness has eroded.”
Should Moody’s also downgrade the local-currency rating, rand debt would fall out of gauges including Citigroup Inc.’s World Government Bond Index, and this could spark outflows of as much as 100 billion rand ($7 billion), Citigroup economist Gina Schoeman said ahead of the rating company announcements. A selloff of rand bonds -- which comprise about 90 percent of South Africa’s outstanding liabilities -- would raise borrowing costs for the nation as it sells more debt to plug a widening budget gap.
The rand fell as much as 2 percent to 14.1585 per dollar Friday, and has lost 7.5 percent of its value since the middle of the year.
It will be “very difficult” for the South African Treasury to come up with the kind of “magic tools” needed to stop a downgrade by Moody’s, said Thabi Leoka, an economist at Argon Asset Management in Johannesburg. “It’s 90 days or bust and they can actually make a move before the 90 days.”
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Kenya's opposition plans further protests against the president @business Africa |
Kenya’s main opposition alliance is pressing its campaign against Uhuru Kenyatta, saying it will hold an event to commemorate victims of political violence on Tuesday, the day he is scheduled to be sworn in for a second term as president.
The National Super Alliance will also convene a so-called people’s assembly next month to chart the country’s “political destiny,” Musalia Mudavadi, one of the principals in the four-party coalition, said in a statement emailed Saturday from the capital, Nairobi.
The government has warned county legislators that it considers such gatherings illegal. Twelve of 19 pro-opposition counties have already endorsed the formation of people’s assemblies and back the opposition’s repudiation of Kenyatta’s victory, the Nairobi-based Star newspaper reported on Saturday, citing people it didn’t identify.
“The sovereignty of the people enshrined in our constitution means that the people are the architects of the state,” Mudavadi said. “If leaders consistently abuse power, if checks and balances do not work as they should, then the people are compelled to go back to the drawing board. The people’s assembly is that drawing board.”
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