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Monday 02nd of September 2019
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The @federalreserve Shouldn't Enable @realDonaldTrump @economics Africa |
U.S. President Donald Trump’s trade war with China keeps undermining
the confidence of businesses and consumers, worsening the economic
outlook.
This manufactured disaster-in-the-making presents the Federal Reserve
with a dilemma: Should it mitigate the damage by providing offsetting
stimulus, or refuse to play along?
If the ultimate goal is a healthy economy, the Fed should seriously
consider the latter approach.
The Fed’s monetary policy makers typically take what happens outside
their realm as a given, and then make the adjustments needed to pursue
their goals of stable prices and maximum employment.
They place little weight on how their actions will affect decisions in
other areas, such as government spending or trade policy.
The Fed, for example, wouldn’t hold back on interest-rate cuts to
compel Congress to provide fiscal stimulus instead. Staying above the
political fray helps the central bank maintain its independence.
So, according to conventional wisdom, if Trump’s trade war with China
hurts the U.S. economic outlook, the Fed should respond by adjusting
monetary policy accordingly — in this case by cutting interest rates.
But what if the Fed’s accommodation encourages the president to
escalate the trade war further, increasing the risk of a recession?
The central bank’s efforts to cushion the blow might not be merely
ineffectual. They might actually make things worse.
Fed Chairman Jerome Powell has hinted that he is aware of the problem.
At the central bank’s annual conference in Jackson Hole last week, he
noted that monetary policy cannot “provide a settled rulebook for
international trade.”
I see this as a veiled reference to the trade war, and a warning that
the Fed’s tools are not well suited to mitigate the damage.
Yet the Fed could go much further. Officials could state explicitly
that the central bank won’t bail out an administration that keeps
making bad choices on trade policy, making it abundantly clear that
Trump will own the consequences of his actions.
Such a harder line could benefit the Fed and the economy in three ways.
First, it would discourage further escalation of the trade war, by
increasing the costs to the Trump administration.
Second, it would reassert the Fed’s independence by distancing it from
the administration’s policies.
Third, it would conserve much-needed ammunition, allowing the Fed to
avoid further interest-rate cuts at a time when rates are already very
low by historical standards.
I understand and support Fed officials’ desire to remain apolitical.
But Trump’s ongoing attacks on Powell and on the institution have made
that untenable.
Central bank officials face a choice: enable the Trump administration
to continue down a disastrous path of trade war escalation, or send a
clear signal that if the administration does so, the president, not
the Fed, will bear the risks — including the risk of losing the next
election.
There’s even an argument that the election itself falls within the
Fed’s purview. After all, Trump’s reelection arguably presents a
threat to the U.S. and global economy, to the Fed’s independence and
its ability to achieve its employment and inflation objectives.
If the goal of monetary policy is to achieve the best long-term
economic outcome, then Fed officials should consider how their
decisions will affect the political outcome in 2020.
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The specialist is monitoring data on his mission console when a voice breaks in Africa |
The specialist is monitoring data on his mission console when a voice
breaks in, “a voice that carried with it a strange and unspecifiable
poignancy”.
He checks in with his flight-dynamics and conceptual- paradigm
officers at Colorado Command:
“We have a deviate, Tomahawk.”
“We copy. There’s a voice.”
“We have gross oscillation here.”
“There’s some interference. I have gone redundant but I’m not sure
it’s helping.”
“We are clearing an outframe to locate source.”
“Thank you, Colorado.”
“It is probably just selective noise. You are negative red on the
step-function quad.”
“It was a voice,” I told them.
“We have just received an affirm on selective noise... We will
correct, Tomahawk. In the meantime, advise you to stay redundant.”
The voice, in contrast to Colorado’s metallic pidgin, is a melange of
repartee, laughter, and song, with a “quality of purest, sweetest
sadness”.
“Somehow we are picking up signals from radio programmes of 40, 50, 60
years ago.”
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"Water is fluid, soft, and yielding. But water will wear away rock, which is rigid and cannot yield" Africa |
“Water is fluid, soft, and yielding. But water will wear away rock,
which is rigid and cannot yield. As a rule, whatever is fluid, soft,
and yielding will overcome whatever is rigid and hard. This is another
paradox: What is soft is strong,” Lao Tzu
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"Ours is the most cryptic of Centuries, it's true Nature a Dark Secret" P 206 Imaginary Homelands @SalmanRushdie Africa |
“Meaning is a shaky edifice we build out of scraps, dogmas, childhood
injuries, newspaper articles, chance remarks, old fillms, small
victories, people hated, people loved; perhaps it is because our sense
of what is the case is constructed from such inadequate materials that
we defend it so fiercely, even to death.”
― Salman Rushdie, Imaginary Homelands: Essays and Criticism 1981-1991
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So here's where we are: @MatthewdAncona Law & Politics |
1. So here’s where we are: Johnson’s authority is made of balsa. He
depends upon the taxpayer-purchased votes of the DUP and the support
of his own parliamentary party, many of whom want much more than the
backstop excised from May’s deal....
2. He is only in office at all because of the decision taken by the
tiny selectorate of Tory members. His mandate is constitutionally
sound but politically frangible. BUT...
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Americans' View of the Current Economy Is the Highest in 19 Years @markets International Trade |
U.S. consumer confidence declined in August by less than forecast as
Americans’ assessment of current conditions climbed to the highest
level in almost 19 years, helped by a job market that remains robust.
The Conference Board’s index eased to 135.1 this month from a revised
135.8, according to data from the New York-based group Tuesday that
exceeded all estimates in a Bloomberg survey of economists.
The gauge of views on the present situation jumped to 177.2, the
highest since November 2000, the expectations index decreased.
“While other parts of the economy may show some weakening, consumers
have remained confident and willing to spend,” Lynn Franco, senior
director of economic indicators at the Conference Board, said in a
statement.
“However, if the recent escalation in trade and tariff tensions
persists, it could potentially dampen consumers’ optimism regarding
the short-term economic outlook.”
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@KenyaAirways reports H1 2019 Earnings here Kenyan Economy |
Par Value: 5/-
Closing Price: 2.65
Total Shares Issued: 5681616931.00
Market Capitalization: 15,056,284,867
EPS: -1.01
PE: -2.624
Kenya Airways PLC H1 2019 results through 30th June 2019 vs. 30th June 2018
H1 Total income 58.550b vs. 52.193b +12.180%
H1 Total operating costs [61.454b] vs. [53.218b] -15.476%
H1 Operating Loss [2.904b] vs. [1.025b] -183.317%
H1 Other costs [5.684b] vs. [2.990b] -90.100%
H1 Loss before income tax [8.562b] vs. [3.992b] -114.479%
H1 Income tax [expenses]/ credit [1m] vs. [43m] -97.674%
H1 Loss for the period [8.563b] vs. [4.035b] -112.218%
Basic loss per share [1.47] vs. [0.69] -113.043%
Diluted loss per share [1.14] vs. [0.54] -111.111%
Total Equity [16.184b]
Cash and cash equivalents at the end of the period 4.229b vs. 5.964b -29.091%
COMMENTARY
On behalf of the board of Directors, I hereby present the Kenya
Airways PLC financial results for the six months period ended 30 June
2019.
I would like to point out that in turning around Kenya Airways, a
deliberate decision was taken not to shrink the business but instead
improve financial performance through strategic investments on growth
opportunities.
Some of these investments may deny KQ and its shareholders an
immediate return but are expected to yield positive results in the
future.
In cognisance of these long-term investments, the Group has recorded a
loss before tax of Kshs 8,562 million compared to Kshs 3,992 million
reported in the same period in 2018. Some of these losses can be
attributed to the return in to KQ service of two Boeing 787's that
were on sub-lease to Oman Air, investment in new routes and adoption
of the new International Financial Reporting Standard (IFRS 16).
IFRS 16 which came into effect in January 2019, replacing IAS 17,
recognises operating leases as assets in financial statements and
enables comparability between companies that lease assets and those
that outrightly purchase assets.
Revenues
The Group's total revenues increased by 12% to Kshs. 58,550 million.
The growth was due to improved passenger, cargo and other revenue
streams that were mainly driven by the positive performance of
recently introduced routes
These results include revenues from routes such as New York,
Libreville, Mogadishu which were opened in the second half on 2018. As
a result, the Airline recorded a 6.6% increase in passenger numbers to
hit 2.4 million. Passenger revenue grew 5.8% to Kshs. 42,597 million.
Despite the increase in revenues, we continue to register lower yields
attributed increased competitive environment, major currency
fluctuations as well as a tough local macro-economic environment.
Costs:
The Group saw a 15.9 % rise in operating costs. The increase was
mainly attributed to the return of two Boeing 787s that had been
sub-leased to Oman Air and fuel costs which marginally increased by 5%
due to increased flying. The airline, however benefitted from its fuel
hedging program.
Based on the above revenue and cost dynamics, the Group recorded an
Operating loss Margin of 5.6%.
Other operating highlights:
During the first half, KQ continued its network expansion drive,
opening the key strategic routes - Rome, Geneva and Malindi and
increasing frequencies to other key destinations. The New York City
Route which was launched in October 2013 has shown a positive
passenger uptake. The growth in passenger numbers is highly attributed
to codeshare agreements that enable passengers to connect to other
destinations in the US.
Outlook
The global economic and geopolitical context remains uncertain, while
Kenya Airways continues to operate in a highly competitive
environment. The Group continues to invest in improvement of
operations, efficient network growth and improvement of service
quality and delivery.
In the next half year, the Board and Management are working on a fleet
refinancing program, which once completed will improve the Group's
cashflow. The impact of this program on the Group's financials will be
announced to the public once the program is approved for
implementation.
On behalf of the Board of Directors, I take this opportunity to
express my sincere appreciation to our customers, the Government of
Kenya, shareholders, management, staff, suppliers and other
stakeholders for their continued support.
Michael Joseph
Chairman
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