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Friday 20th of September 2019 |
The Spire is a 1964 novel by the English author William Golding. "A dark and powerful portrait of one man's will" Africa |
it deals with the construction of the 404-foot high spire loosely based on Salisbury Cathedral; the vision of the fictional Dean Jocelin. In this novel, William Golding utilises stream of consciousness writing with an omniscient but increasingly fallible narrator. Dean Jocelin is the character through whom the novel is presented. Golding utilises the stream of consciousness technique to show his, Lear-like, descent into madness. The novel charts the destruction of his self-confidence and ambition. As the construction of the spire draws to an end, Jocelin is removed from his position as Dean and his abandonment of his religious duties is denounced by the church Council. Ultimately, he succumbs to his illness which he had personified as his guardian angel. Jocelin may have been named after Josceline de Bohon, Bishop of Salisbury from 1142 to 1184, who is buried in Salisbury Cathedral.
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William Golding's The Spire @guardian Africa |
The Spire was published in 1964. The Dean of a cathedral, Jocelin, wants to add a spire to the building, which has no foundations and is therefore a kind of miracle already. The novel is about the second, highly imperfect miracle, the erection of the spire – and the cost, which is financial, physical and spiritual. And it is about creative realisation, bringing the impossible into being. William Golding wrote the first draft of The Spire in 14 days – itself a kind of miracle. An anchor is "a chrysanthemum of phosphorescence"; a boat has "the clumsy beauty of a double bass"; at war, he sees "a Christmas tree of exploding ammunition". This is a huge spider on his pillow: "the dry tap and scramble." He was afraid of spiders. This is Golding describing dust. The cathedral of stone is being dismantled and added to – creating a cathedral of dust, a phantom, a twin. Here is Golding's creation of not one pillar, but several: "Everywhere, fine dust gave these rods and trunks of light the importance of a dimension. He blinked at them again, seeing, near at hand, how individual grains of dust turned over each other, or bounced all together, like mayfly in a breath of wind. He saw how further away they drifted cloudily, coiled, or hung in a moment of pause, becoming, in the most distant rods and trunks, nothing but colour, honey-colour slashed across the body of the cathedral … He shook his head in rueful wonder at the solid sunlight." So, as temporary as a mayfly and a serious rival and replacement. Solid sunlight. Dust definitively described by a master. Golding can scorch us by the immediate heat of his sentences. But sometimes he chooses the slower narrative burn. The first chapter begins with Jocelin holding the model of the spire and laughing: "He was laughing, chin up, and shaking his head. God the father was exploding in his face with a glory of sunlight through painted glass, a glory that moved with his movements to consume and exalt Abraham and Isaac and then God again. The tears of laughter in his eyes made additional spokes and wheels and rainbows. // Chin up, hands holding the model spire before him, eyes half closed; joy – "I've waited half my life for this day!"' It doesn't quite make sense, or it doesn't make immediate sense. It is like Gerard Manley Hopkins's opening trump, "As kingfishers catch fire …" Kingfishers don't catch fire. Hopkins is using a metaphor to capture the burst of colours given off by the kingfisher. Ted Hughes uses the same idea of combustion for bold colours in "Macaw and Little Miss", a poem from his first book, The Hawk in the Rain: "the macaw bristles in a staring / combustion …" The brilliant extra touch is that adjective "staring" appended to "combustion". All the indignation peculiar to the macaw is there. In Golding's opening sentence we read "God the Father was exploding in his face …" which is initially as enigmatic as it is dramatic – until it is resolved as a metaphorical description of sunlight streaming through a stained glass window. The delay is important. There is a semantic lag, a slight, postponed understanding throughout The Spire. "He was laughing, chin up, and shaking his head." It reads at first like third-person impersonal, authorial prose, but as the paragraph proceeds, we become aware that the narrative isn't impersonal: it is focalised for Jocelin. It emanates from his point of view. It isn't free indirect speech – a clearer indicator that we are privy to a character's thoughts. An example from Jane Austen: "The comfort of such a friend at that moment as Colonel Brandon – of such a companion for her mother – how gratefully was it felt!" You can hear Elinor Dashwood's voice, her emotion. Focalisation gives us not the character's voice, but the timbre of their thought. And this is crucial to The Spire because, for most of the narrative, the reader is trapped in Jocelin's subjectivity, in Jocelin's solipsism. We find it difficult to judge him – his motives, his purity, his corruption, his ambition, his vanity – because the view of him is restricted. As in a theatre, where the seats are cheaper because a pillar interferes with the view of the stage. In this case, not a pillar, exactly, but a nose: "He stood, smiling round his nose, head up …", "so Jocelin felt a smile bend the seams of his own face as he looked round his nose at him." The nose stands for the obstacle of the self. Golding knew exactly what he was doing. Later, he describes Jocelin's fractured memories in terms of narrative: "they were like sentences from a story, which though they left great gaps, still told enough." Clearly self-referential. True, we are afforded glimpses, dispatches, from the outside world. Two young deacons are overheard by Jocelin, denigrating someone unspecified: "Say what you like; he's proud." Second deacon: "And ignorant." First deacon: "Do you know what? He thinks he is a saint! A man like that!" We can't be sure they are referring to Jocelin, except for the word "but" which begins this sentence: "But when the two deacons saw the dean looming over them, they fell to their knees." However, the criticism of Jocelin is obliterated by Jocelin's subjectivity, his joy at having held in his hand the model of the spire that is to be built. "He looked down, loving them in his joy." And he refuses to accept explicitly that they are talking about him. He says: "Who is this poor fellow? You should pray for him rather …" He refuses to accept delivery of the insult he has overheard – and so we cannot be completely sure what he knows and what he doesn't know. The Spire confines us to Jocelin's consciousness – not absolutely, but for most of the novel's length. There is in the opening pages a dumb mason who is sculpting Jocelin's head for a gargoyle to be built into the spire. He carves while Jocelin loses himself in prayer. It is an objective record. Yet Jocelin disputes it: "Oh no, no, no! I'm not as beaky as that! Not half as beaky!" Then he contemplates the gaunt stone portrait head and reinterprets its bony features as the portrait of spirituality. The dumb man makes a gesture that Jocelin interprets to mean bird flight. And from that supposition it is only a step to identifying with angels: "Rushing on with the angels, the infinite speed that is stillness, hair blown, torn back, straightened with the wind of the spirit, mouth open, not for uttering rain-water, but hosannas and hallelujahs." The function of the gargoyle is over-ridden. By Jocelin, primarily, though he is conscious of his hubris. A hubris he attributes to the sculptor. "Don't you think you might strain my humility, by making an angel of me?" And what is the answer to this question? The sculptor shakes his head. "Humming in the throat, headshake, doglike, eager eyes." Is the dumb sculptor denying that Jocelin's humility is vulnerable? Or is he denying that he ever thought of portraying Jocelin as an angel in the first place? Jocelin's extrapolation is, after all, based on a gesture. What is the dumb sculptor doing in the novel? He represents the muted objective narrative voice. Which we hear only as William James's description of consciousness: "one great blooming buzzing confusion". It is Golding's task as a novelist to keep this ambiguity alive for the length of his novel. Let me return to the very beginning of The Spire and ask why Jocelin is laughing? The obvious reason is that he is laughing because he is happy. He has the model of the spire in his hands. But is that all? In the stained glass there are two images. God the father exploding in his face – a phrase that suggests a disaster brought on the self by the self. It blew up in his face. The other image in the stained glass is Abraham and Isaac. In Hebrew, the name "Isaac" means "she laughed". She is Sarah, the wife of Abraham. When Abraham was over 100 and Sarah well beyond child-bearing age, Sarah was promised a son – and she laughed. But the promise comes to pass. Miracles are possible. The spire might also come to pass – and does, at an extraordinary cost. After extraordinary sacrifices. Sacrifices: again we think of Abraham agreeing to sacrifice the boy Isaac and thus demonstrate obedience to a relentless deity. "Consumed and exalted." And those rainbows created by Jocelin's tears of laughter are brilliantly naturalistic, but they also nod to the rainbow of the covenant between God and man after the flood, giving man dominion over the earth and its animals. Power. Like the imperfect power Jocelin wields. And there is another reason why Jocelin is laughing. He is laughing because The Spire is a divine comedy. In Dante, the word commedia doesn't mean the Comedy Store. It means a happy ending – paradiso, after the inferno and purgatory. In Golding's novel, comedy means something dark, and bitterly ironic. Is Jocelin's angel an angel? Or is the angel a hallucination caused by Jocelin's tubercular spine? There are two explanations. It is not until the final pages that we know for a certainty that we can never know. There are two explanations just as there are two cathedrals – one of stone, one of dust – in the first chapter. At the end of The Spire, Golding returns to the idea of dust. The dying Jocelin examines a patch by a mounting block. "But for all the feet that had trodden it, it remained ordinary dust." Not a cathedral of individual motes shot through by the sunlight of genius.
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"Twin Buddhas, twin towers, interesting coincidence, so what." - Thomas Pynchon, Bleeding Edge Africa |
“You remember those twin statues of the Buddha that I told you about? Carved out of a mountain in Afghanistan, that got dynamited by the Taliban back in the spring? Notice anything familiar?" "Twin Buddhas, twin towers, interesting coincidence, so what." "The Trade Center towers were religious too. They stood for what this country worships above everything else, the market, always the holy fucking market." "A religious beef, you're saying?" "It's not a religion? These are people who believe the Invisible Hand of the Market runs everything. They fight holy wars against competing religions like Marxism. Against all evidence that the world is finite, this blind faith that resources will never run out, profits will go on increasing forever, just like the world's populations--more cheap labor, more addicted consumers.”
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Houthi Rebels Overturned the Middle East Geopolitical Chessboard @asiatimesonline @GRTVnews Pepe Escobar Law & Politics |
We are the Houthis and we’re coming to town. With the spectacular attack on Abqaiq, Yemen’s Houthis have overturned the geopolitical chessboard in Southwest Asia – going as far as introducing a whole new dimension: the distinct possibility of investing in a push to drive the House of Saud out of power. Blowback is a bitch. Houthis – Zaidi Shiites from northern Yemen – and Wahhabis have been at each other’s throats for ages. This book is absolutely essential to understand the mind-boggling complexity of Houthi tribes; as a bonus, it places the turmoil in southern Arabian lands way beyond a mere Iran-Saudi proxy war. Still, it’s always important to consider that Arab Shiites in the Eastern province – working in Saudi oil installations – have got to be natural allies of the Houthis fighting against Riyadh. Houthi striking capability – from drone swarms to ballistic missile attacks – has been improving remarkably for the past year or so. It’s not by accident that the UAE saw which way the geopolitical and geoeconomic winds were blowing: Abu Dhabi withdrew from Crown Prince Mohammad bin Salman’s vicious war against Yemen and now is engaged in what it describes as a “peace-first” strategy. Even before Abqaiq, the Houthis had already engineered quite a few attacks against Saudi oil installations as well as Dubai and Abu Dhabi airports. In early July, Yemen’s Operations Command Center staged an exhibition in full regalia in Sana’a featuring their whole range of ballistic and winged missiles and drones. The situation has now reached a point where there’s plenty of chatter across the Persian Gulf about a spectacular scenario: the Houthis investing in a mad dash across the Arabian desert to capture Mecca and Medina in conjunction with a mass Shiite uprising in the Eastern oil belt. That’s not far-fetched anymore. Stranger things have happened in the Middle East. After all, the Saudis can’t even win a bar brawl – that’s why they rely on mercenaries. The US intel refrain that the Houthis are incapable of such a sophisticated attack betrays the worst strands of orientalism and white man’s burden/superiority complex. The only missile parts shown by the Saudis so far come from a Yemeni Quds 1 cruise missile. According to Brigadier General Yahya Saree, spokesman for the Sana’a-based Yemeni Armed Forces, “the Quds system proved its great ability to hit its targets and to bypass enemy interceptor systems.” Houthi armed forces duly claimed responsibility for Abqaiq: “This operation is one of the largest operations carried out by our forces in the depth of Saudi Arabia, and came after an accurate intelligence operation and advance monitoring and cooperation of honorable and free men within the Kingdom.” Notice the key concept: “cooperation” from inside Saudi Arabia – which could include the whole spectrum from Yemenis to that Eastern province Shiites. Even more relevant is the fact that massive American hardware deployed in Saudi Arabia inside out and outside in – satellites, AWACS, Patriot missiles, drones, battleships, jet fighters – didn’t see a thing, or certainly not in time. The sighting of three “loitering” drones by a Kuwaiti bird hunter arguably heading towards Saudi Arabia is being invoked as “evidence”. Cue to the embarrassing picture of a drone swarm – wherever it came from – flying undisturbed for hours over Saudi territory. UN officials openly admit that now everything that matters is within the 1,500 km range of the Houthis’ new UAV-X drone: oil fields in Saudi Arabia, a still-under-construction nuclear power plant in the Emirates and Dubai’s mega-airport. My conversations with sources in Tehran over the past two years have ascertained that the Houthis’ new drones and missiles are essentially copies of Iranian designs assembled in Yemen itself with crucial help from Hezbollah engineers. US intel insists that 17 drones and cruise missiles were launched in combination from southern Iran. In theory, Patriot radar would have picked that up and knocked the drones/missiles from the sky. So far, absolutely no record of this trajectory has been revealed. Military experts generally agree that the radar on the Patriot missile is good, but its success rate is “disputed” – to say the least. What’s important, once again, is that the Houthis do have advanced offensive missiles. And their pinpoint accuracy at Abqaiq was uncanny. For now, it appears that the winner of the US/UK-supported House of One Saudi war on the civilian Yemeni population, which started in March 2015 and generated a humanitarian crisis the UN regards as having been of biblical proportions, is certainly not the crown prince, widely known as MBS. Crude oil stabilization towers – several of them – at Abqaiq were specifically targeted, along with natural gas storage tanks. Persian Gulf energy sources have been telling me repairs and/or rebuilding could last months. Even Riyadh admitted as much. Blindly blaming Iran, with no evidence, does not cut it. Tehran can count on swarms of top strategic thinkers. They do not need or want to blow up Southwest Asia, which is something they could do, by the way: Revolutionary Guards generals have already said many times on the record that they are ready for war. Professor Mohammad Marandi from the University of Tehran, who has very close relations with the Foreign Ministry, is adamant: “It didn’t come from Iran. If it did, it would be very embarrassing for the Americans, showing they are unable to detect a large number of Iranian drones and missiles. That doesn’t make sense.” Marandi additionally stresses, “Saudi air defenses are not equipped to defend the country from Yemen but from Iran. The Yemenis have been striking against the Saudis, they are getting better and better, developing drone and missile technology for four and a half years, and this was a very soft target.” A soft – and unprotected – target: the US PAC-2 and PAC-3 systems in place are all oriented towards the east, in the direction of Iran. Neither Washington nor Riyadh knows for sure where the drone swarm/missiles really came from. Readers should pay close attention to this groundbreaking interview with General Amir Ali Hajizadeh, the commander of the Islamic Revolutionary Guard Corps Aerospace Force. The interview, in Farsi (with English subtitles), was conducted by US-sanctioned Iranian intellectual Nader Talebzadeh and includes questions forwarded by my US analyst friends Phil Giraldi and Michael Maloof and myself. Explaining Iranian self-sufficiency in its defense capabilities, Hajizadeh sounds like a very rational actor. The bottom line: “Our view is that neither American politicians nor our officials want a war. If an incident like the one with the drone [the RQ-4N shot down by Iran in June] happens or a misunderstanding happens, and that develops into a larger war, that’s a different matter. Therefore we are always ready for a big war.” In response to one of my questions, on what message the Revolutionary Guards want to convey, especially to the US, Hajizadeh does not mince his words: “In addition to the US bases in various regions like Afghanistan, Iraq, Kuwait, Emirates and Qatar, we have targeted all naval vessels up to a distance of 2,000 kilometers and we are constantly monitoring them. They think that if they go to a distance of 400 km, they are out of our firing range. Wherever they are, it only takes one spark, we hit their vessels, their airbases, their troops.” On the energy front, Tehran has been playing a very precise game under pressure – selling loads of oil by turning off the transponders of their tankers as they leave Iran and transferring the oil at sea, tanker to tanker, at night, and relabeling their cargo as originating at other producers for a price. I have been checking this for weeks with my trusted Persian Gulf traders – and they all confirm it. Iran could go on doing it forever. Of course, the Trump administration knows it. But the fact is they are looking the other way. To state it as concisely as possible: they are caught in a trap by the absolute folly of ditching the JCPOA, and they are looking for a face-saving way out. German Chancellor Angela Merkel has warned the administration in so many words: the US should return to the agreement it reneged on before it’s too late. And now for the really hair-raising part. The strike at Abqaiq shows that the entire Middle East production of over 18 million barrels of oil a day – including Kuwait, Qatar, United Arab Emirates and Saudi Arabia – can be easily knocked out. There is zero adequate defense against these drones and missiles. Well, there’s always Russia. Here’s what happened at the press conference after the Ankara summit this week on Syria, uniting Presidents Putin, Rouhani and Erdogan. Question: Will Russia provide Saudi Arabia with any help or support in restoring its infrastructure? President Putin: As for assisting Saudi Arabia, it is also written in the Quran that violence of any kind is illegitimate except when protecting one’s people. In order to protect them and the country, we are ready to provide the necessary assistance to Saudi Arabia. All the political leaders of Saudi Arabia have to do is take a wise decision, as Iran did by buying the S-300 missile system, and as President Recep Tayyip Erdogan did when he bought Russia’s latest S-400 Triumph anti-aircraft system. They would offer reliable protection for any Saudi infrastructure facilities. President Hassan Rouhani: So do they need to buy the S-300 or the S-400? President Vladimir Putin: It is up to them to decide [laughs]. In The Transformation of War, Martin van Creveld actually predicted that the whole industrial-military-security complex would come crumbling down when it was exposed that most of its weapons are useless against fourth-generation asymmetrical opponents. There’s no question the whole Global South is watching – and will have gotten the message. Now we are entering a whole new dimension in asymmetric hybrid war. In the – horrendous – event that Washington would decide to attack Iran, egged on by the usual neocon suspects, the Pentagon could never hope to hit and disable all the Iranian and/or Yemeni drones. The US could expect, for sure, all-out war. And then no ships would sail through the Strait of Hormuz. We all know the consequences of that. Which brings us to The Big Surprise. The real reason there would be no ships traversing the Strait of Hormuz is that there would be no oil in the Gulf left to pump. The oil fields, having been bombed, would be burning. So we’re back to the realistic bottom line, which has been stressed by not only Moscow and Beijing but also Paris and Berlin: US President Donald Trump gambled big time, and he lost. Now he must find a face-saving way out. If the War Party allows it.
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16-SEP-2019: Drones Strikes Deep Inside the Kingdom Law & Politics |
Last week was the Anniversary of 9/11 and it is increasingly apparent that More Americans are questioning the Official 9/11 Story As New Evidence contradicts the Official Narrative [MintPress News] The overwhelming evidence presented now demonstrates beyond any doubt that pre-planted explosives and/or incendiaries — not just airplanes and the ensuing fires — caused the destruction of the three World Trade Center buildings, killing the vast majority of the victims who perished that day. The Official Narrative around the assassination of JFK has been similarly debunked. Two great American Writers have touched on this Don DeLillo in his book Libra "There is a world inside the world." "There's always more to it. This is what history consists of. It is the sum total of the things they aren't telling us." Thomas Pynchon in Bleeding Edge “No matter how the official narrative of this turns out," it seemed to Heidi, "these are the places we should be looking, not in newspapers or television but at the margins, graffiti, uncontrolled utterances, bad dreamers who sleep in public and scream in their sleep.” Events in Saudi Arabia this weekend has been interpreted every which way and allow me to try and interpret the events outside the Echo Chamber that is the Saudi paid PR machine and the reflexive Pompeo ''Iranians under the bed'' standard response. It has been reported that a swarm of ten armed and explosive Drones struck at the heart of the Kingdom's Oil industry. The strikes were on Saudi Arabia's 7 million barrel per day Abqaiq processing complex and its second-biggest oil field, Khurais, Saudi Aramco describes its Abqaiq oil processing facility there as “the largest crude oil stabilization plant in the world.” Abqaiq is perhaps the world’s most important oil installation. According to the @EIAgov the plant has a capacity of more than 7 million b/d or about 8% of the world's total oil production [Energy Intelligence]. Most of the oil produced in the country [Saudi Arabia] is processed at Abqaiq before export or delivery to refineries. Saudi Aramco is assuring the World it can restore output quickly but has admitted that the production shutdown amounts to a loss of about five million barrels a day, the people said, roughly 5% of the world’s daily production of crude oil. The kingdom produces 9.8 million barrels a day. I cannot recall an attack of this severity in the Kingdom ever. The Houthis took responsibility for this attack. U.N. investigators have previously pronounced that the Houthis’ new UAV-X drone, likely has a range of up to 1,500 kilometres (930 miles). Secretary Pompeo immediately dismissed the possibility that these drones originated from Yemen and blamed Iran. More worryingly for the Kingdom are reports of cooperation by people in Saudi Arabia. It may well be that drones were launched from inside Saudi Arabia and that their launch point was far nearer to the targets than publicly assumed. Neither option is a good one. If the Houthis did launch the attack from the Yemen, it speaks to the fact that nowhere in the Kingdom is safe and the Houthis have achieved an asymmetric balance, which is quite extraordinary. In November 2017, I wrote of how the then 30-year-old Crown prince of Saudi Arabia Mohamed bin Salman MBS had arrived on the scene and immediately launched an unwinnable war in the Yemen. It will be a cake walk MBS said over in a week he said and they will be throwing rose petals at our feet. Abu Dhabi's MBZ saw the writing on the Wall and stop lossed his Yemeni Adventure. It is clear now that the ''Yemen War has become Saudi Arabia’s Vietnam (or Soviet Union’s Afghanistan or indeed U.S. version of Afghanistan)'' @JKempEnergy and that the ''The kingdom has thrown everything into conflict but failed to achieve a decisive military advantage and favourable political endgame'' More worrying for the Kingdom is the second scenario were these Drones might have been launched within the Kingdom which would be signalling that the Houthis might well have teamed up with the Saudi Shia who represent up to 25% of the Population and have been ground down viciously by the House of Saud, characterised as Apostates and whose Leaders have been beheaded and crucified. Zerohedge is speculating that this is a false Flag attack designed to ramp up the Price of Oil in order to grease the way for the Saudi Aramco IPO. If this is true and I put the probability at zero then the Crown Prince is I am afraid insane for who would buy a share of a company when its major installations are not secure but under severe attacks? The Saudi Aramco IPO is now dead in the Water. The Surge in the Oil Price [which I will get to momentarily] will have zero effect on the IPO because now the overwhelming geopolitical question is around the longevity of the House of Saud and its Crown Prince who is of course the Proud Owner of Leonardo Da Vinci's Salvatori Mundi which means Saviour of the World and according to Robert Baer has so. many enemies that he sleeps on his $500m yacht the Serene off Jeddah. The much commented on Orb is of no help now. If the Houthis have tapped into the Saudi Shia, the House of Saud in my opinion is on its last legs. This is a Big Call and needs to be understood for that. No amount of paid PR or kind words from Trump can finesse this. Over the Weekend, so many of the Oil Watchers I follow were saying we must wait for the Official Saudi comment. Let me tell you this for free. Saudi comment is worthless, irrelevant and paid for. The Oil Markets open on Sunday evening. On June 17th this year I wrote [quite presciently I must admit] ''All global markets have become liquidity Traps. The Oil Markets trade 24 hours but in the early hours is when Gremlin Wizards and Djinns [The Quran says that the Djinn are made of a smokeless and "scorching fire", They are usually invisible to humans, but humans do appear clearly to Djinn, as they can possess them. DJinn have the power to travel large distances at extreme speeds and are thought to live in remote areas - so now You Know] stalk the Exchanges like the FX Markets. Therefore, we could very well see a Price Spike. One Touch is the Way to go'' I reckon we could jump as high as $80.00 which would be a +45.00% leap versus Fridays closing price before we trade back to about +10% with would be about $60.00+ as Trump unloads Crude from the Reserve. So Big Price Spike then retracement but then if we do get within 10% of Fridays closing Price of $54.83, then you need to get long. The production shutdown amounts to a loss of about five million barrels a day and is a big deal. In May I wrote about Iran and I quoted Hunter S. Thompson who described The Edge [and I was describing Iran as being at the Edge] thus “There is no honest way to explain it because the only people who really know where it is are the ones who have gone over'' My Mistake was to think Iran was at the Thompsonian Edge whereas it is clear now that it is the Kingdom.
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@netflix: how will the story end? @FinancialTimes World Currencies |
On a sunny midsummer weekend in Los Angeles, Netflix turned the Santa Monica Pier — one of the city’s busiest tourist destinations — into a three-dimensional marketing blitz, transforming it into the fictional 1980s Indiana town where its hit show Stranger Things is set. The 110-year-old structures were dressed up to mimic the show’s location; the Ferris wheel was flashing eerie red lights over the Pacific Ocean. The night before, there had been a full marching band for a lavish premiere party. The marketing push illustrated how critical the show is to the subscription-reliant digital streaming service. The July 4 arrival of the third series of Stranger Things was the “biggest content drop” of 2019 for Netflix, says Bernstein analyst Todd Juenger. “If any one piece of content would make a difference on [subscriber additions], that should be the one,” he adds. He was right. Global subscriber numbers spiked in the first two weeks of July. Unfortunately for Netflix it was two weeks too late. In the quarter to the end of June the company lost subscribers in the US — 126,000 of them — for the first time since 2011. Equally worrying, outside the US the company signed up only 2.8m subscribers — about half of what Netflix had predicted. The market wiped $17bn off Netflix’s stock value overnight, emphasising the brutal correlation between new subscribers and stock market value. The company is predicting 7m new subscribers in the third quarter. But the dramatic fall in the second quarter — even before the arrival of greater competition from Apple and others later this year — has cast doubt over whether the company, that successfully took on the Hollywood hierarchy is as invincible as it previously seemed. “The next best thing to success in Hollywood is schadenfreude,” says a senior executive at an independent film studio who has worked with Netflix on TV projects. “There is no better sport. It might even eclipse your own success.” Wall Street is now seeking evidence as to whether this miss was a blip or a trend. The stock market has become “addicted” to Netflix’s subscriber growth, says Aswath Damodaran, a finance professor at New York university's Stern School of Business who closely follows the company. “For a decade, [Netflix has] spent more and more money on content to get users and increase market capitalisation, and it worked,” he says. “But the question is: how do you get off this treadmill? At some point spending 75 per cent of every dollar on content won’t be sustainable. The next year is going to be the big challenge.” Netflix spearheaded a streaming revolution that changed the way we watch TV and films. As cable TV lost subscribers, Netflix gained them, putting it in a category with Facebook, Amazon and Google as one of the adored US tech stocks that led a historic bull market. The company spends more than 70 per cent of revenues on content. Analysts estimate that would give it a budget of more than $15bn this year — more than any other media company. Yet Netflix projects it will spend $3.5bn more than it will generate in cash in 2019, while promising that this mismatch will narrow over time. This rate of cash burn means the company has to repeatedly tap debt markets to pay for its content and make other debt repayments. It relies on the faith of investors to fuel the machine, studiously raising more junk-rated debt roughly every six months to help finance its splurge on content. Netflix has taken on the vast majority of its $12bn in long-term debt in the past three years as it almost doubled its global subscriber base to 150m. In an environment of historic low interest rates, investors searching for yield have happily gobbled up Netflix bonds. Many of the big legacy media companies initially surrendered their catalogues to Netflix in return for royalty payments. But the streaming service, anticipating that its rivals would fight back, began building its own catalogue before these shows disappeared from its platform. “People wondered why they were paying so much, but in hindsight it now looks smart,” says a senior film and television banker. “They were building a following [ahead of] an arms race.” Today Netflix faces an onslaught of competition in the market it invented. After years of false starts, Apple is planning to launch a streaming service in November, as is Disney — with AT&T’s WarnerMedia and Comcast’s NBCUniversal to follow early next year. Apart from Apple, they all have extensive back catalogues. After raising prices in the US earlier this year, a standard Netflix subscription now costs $13 a month. Apple will charge $5 a month and Disney $7 a month for their subscription services. Traditionally Netflix’s strategy has been to outspend rivals, but it may have met its match in Apple, the second-richest company in the world. Two years ago Netflix got into a bidding war with the iPhone maker for The Morning Show, a comedy-drama television series with a star-studded cast led by Jennifer Aniston and Reese Witherspoon. “The deal kept going back and forth between Netflix and Apple,” says one person involved in the talks. Ultimately the producers decided to sell it to Apple for more than $300m, in part because they felt the iPhone maker would give it a bigger marketing push. “On Netflix it would be one of their many great shows. But on Apple it would be the first big marquee show on its new service,” says the person. Despite this, several former Netflix employees say there is little concern internally about the looming competition. “There was never any fear that we’re in trouble,” says one former marketing executive, who left the company in the spring. “Every quarter felt like a year in which Disney and Fox weren’t in the game. The feeling was that we are leap years ahead. And it’s kind of true.” Netflix first invaded US living rooms with its video streaming in 2007. But it would take another six years before it made a big splash with its own shows. The company paid $100m for two seasons of the political thriller House of Cards, which debuted in 2013 to widespread acclaim, putting Netflix on the map with both audiences and Hollywood. House of Cards was instructive for how Netflix would approach deals for years to come. The strategy was to spend big to outbid rivals, usually committing to full global rights for series without asking for a pilot. The deal “changed the whole landscape for how TV was created”, says one veteran Hollywood banker. “For the next year, Netflix was gobbling up everything . . .[it became] ‘the only game in town’.” On occasions the streaming service offered between 30 and 50 per cent higher prices than competitors such as HBO, Showtime and Starz, according to people familiar with these deals. The structure of them also stood out. While traditional networks typically paid on delivery of the show, Netflix sometimes stretched payments out over time, which was accepted because it was paying such a premium, according to people familiar with the deals. This turned out to be an effective liquidity strategy because Netflix’s debt and liabilities are spread out over years, and much of it is not on the balance sheet but rather listed as “contractual obligations”. In addition to its $10.4bn in long-term debt, at the end of last year Netflix also owed another $19bn in obligations and an additional $2bn to $5bn in “unknown” spending — money committed over the next five years to pay for new shows, and to license the rights to existing TV and movies over multi-year contracts. in the meantime rival streaming services such as Hulu, Amazon and Apple have become more aggressive in acquiring content, giving producers options beyond Netflix. And bankers are beginning to question whether Netflix will need to change its funding model to continue winning projects because Apple, Amazon and Hulu pay on delivery. A Netflix spokesman, responding after publication, said the service was already competitive on payment terms, and already paid for some projects on delivery. The streaming wars have spawned a phenomenon known as “Peak TV”, with bankers saying there has not been as much capital in Hollywood since the mid-2000s, when private equity firms were jumping to finance feature films. But some observers believe this is not sustainable. “Five years from now, there will not be as many TV series being made, I promise you,” says Jonathan Taplin, an Oscar-nominated film producer. “We have [doubled the number of series] from seven years ago, and we haven’t grown the audience at all. Any idiot in Economics 101 can tell you that’s not a good proposition,” he says, adding that there is “no real precedent for this . . . it’s kind of weirdly new”. Most of that growth in TV series has come from the streaming services, predominantly Netflix. Some of Hollywood’s most talented executives and creatives have in recent years been lured by the company from other studios, with the promise of eye-popping pay cheques. But at the start of this year, whispers spread of budget cuts. Marketing spending was trimmed to make more space for Netflix’s content budget. “You would hear it a lot in conversations and in meetings. Money needed to be shifted into tent pole [or blockbuster] films,” says one former executive who left this summer. Netflix has also sliced its budget for direct digital advertising of films. Netflix declined to comment, but someone close to it says the company is experimenting with its promotional strategy and plans are likely to change with the imminent arrival of a new chief marketing officer, Jackie Lee-Joe, who joined from BBC Studios. When it comes to content, however, there is little evidence that Netflix is tightening its purse strings. The week before the announcement that it had lost subscribers in the US, Netflix agreed to spend about $200m to make Red Notice, a Dwayne Johnson action film. A few weeks later, it signed a $200m deal with the Game of Thrones creators for future productions. Netflix thrived during a period of easy money and a stock market rally. But recessionary fears have roiled markets recently, and critics believe that a credit crunch would dent its debt-driven model. The company admitted as much in its annual statement, warning that “our streaming obligations include large multiyear commitments”, and that “as a result, we may be unable to react to any downturn in the economy . . . by reducing our obligations in the near term”. However, analysts and investors still believe firmly in the Netflix model. More than 80 per cent of stock analysts rate the company as a buy. Even after the loss of subscribers in the second quarter, Ben Swinburne, head of media research at Morgan Stanley, says Netflix is still on course for a record year of subscriber additions. Analysts, on average, project that cash flow will break even in 2023 as subscribers and margins improve. “They’re balancing growth versus investment and we understand that. It’s quite expensive to create so much content,” says S&P analyst Jawad Hussain. However, he warns: “In 2020, if we don’t see a material improvement in cash flow deficit, that would be a worrying sign.” Mr Hussain expects Netflix to issue at least $3bn in debt next year to comfortably cover its costs. It does have levers that it can pull. More than 70 per cent of its long-term debt is not due for at least five years, which in theory would give it time to adjust its spending if there were to be a downturn. However, a pullback on content also runs the risk of losing subscribers — Netflix blamed its second quarter numbers on a weak content slate. Optimists point to the group’s global reach. It is betting its future on an expansion outside the US, where it has already attracted 60m subscribers. The company is investing heavily in content in places like India and Malaysia, with a focus on local-language programming. However, the economic prospects in these territories are weaker. Netflix subscriptions in India start at the equivalent of $3 a month, compared with its cheapest plan in the US which is three times that, resulting in thinner margins compared with its US business. Netflix most recently raised debt in April to a rapturous reception, selling $2.2bn in 10-year notes in an auction that was three times oversubscribed. Based on its previous schedules, it would next be expected to tap investors in October. For now the stock market appears to be siding with the critics. Netflix’s shares have sunk further since its July slide, touching an eight-month low that values the company at $127bn. “They have to reframe the story,” says NYU’s Mr Damodaran. “If they have a couple more bad quarters, the market will tell the story for them.”
Commodities
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Angola gov making reform progress but still much to do if debt risks to be contained. Some necessary reforms unpopular & risk of pushing too hard as economy recovery fragile @gregorylbsmith Africa |
Need time to shift economy from oil & to jobs but time not on Angola’s side. Recent trip thread 1/10
2. Key areas reform for investors to watch 1/ FX. 2/ Balancing budget & stabilising debt. 3/ Privatisation program. Each important to gov & for keeping $3.7bn IMF program on-track (crucial for eurobond investors & China’s exposure). S&P has #Angola on a B- rating with neg outlook 3. FX big hurdle to non-oil business. Depreciation since devaluation. More market-based allocation but hard to get letter of credit needed to access FX (most firms import inputs). Official & parallel rate gap had narrowed but recently widened. Now official AOA364/$, parallel=~535 4. Until easier FX allocation, will be drag on non-oil investment. Also parallel rate premium means those with official FX access could make easy money. Creates perverse incentives. Wheeling & dealing replaces entrepreneurship & job creation. FX reform important to IMF 5. FX risks also with large public external debt to service =~$51bn (inc $5bn eurobonds, China ~$23bn). Pressure visible in net FX reserves at BNA, down to ~$9bn vs mid-2019 target of $10bn. Gov also has $2bn cash recovered from sovereign wealth fund, plans to spend it for 2020 6. Balancing budget. Adjustment delayed 2014-17 when oil fell from $100. Gov & Sonangol borrowed lots. 2014 debt-GDP 40%, ~90% 2019. Large consol happened: spend ~40% GDP per year 2010-14, down to ~20% GDP 2018-19. Gov working to meet targets but still odd ideas like new gov HQ 7. Next steps: VAT intro 1st Oct (delayed July). Fuel subsidy reduction, pump prices not increased as AOA dep'd. Today diesel K160/43 US cents (at official rate) costing gov (most refined products imported). Both important to IMF agreement but unpopular & local elections in 2020 8. Privatisation plan listed 91 state company. Pressure to act quickly as huge drain on state finances. But better strategy needed. Should decide where state needed & not & rebrand it beyond privatisation: some reform, some closing, only few might be successful in private hands 9. In sum. Action needed to stop debt rising far above 90% GDP. IMF program essential to avoid debt crisis. Risk reform fatigue & reversal. No easy path for gov. Oil only served elite now pressure for inclusion. Need time to redirect economy but time not on Angola’s side 10. PS if visiting well worth taking a copy of the @BradtAngola guidebook. Recommends good places to explore. Lots to do in Luanda, particular fondness for central bank museum, sea front running, & grilled fresh fish on the beach
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Robert Gabriel Mugabe (1924-2019) Africa |
Most of Zimbabwe’s citizens are ‘’born free’’ the fight for independence was real but is no longer relevant is it? We are grateful to all those iconic leaders who liberated our continent of which Mugabe is one but at what price? Fighting for independence is not the same as building an economy which provides opportunity for all its citizens. As some African leaders laud Mugabe today, @PastorEvanLive argues: “There can be no mixed feelings, misconceptions or complications about Robert Mugabe’s legacy. He presided over the destruction of millions of people’s lives over a span of 37 years.” Emmerson Mnangagwa who was eulogising Mugabe as a Revolutionary Icon has failed and is frankly as untenable as his erstwhile Mentor.
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JAN-2019 :: "money is the most universal and most efficient system of mutual trust ever devised." Africa |
“Money is accordingly a system of mutual trust, and not just any system of mutual trust: money is the most universal and most efficient system of mutual trust ever devised.” “Cowry shells and dollars have value only in our common imagination. Their worth is not inherent in the chemical structure of the shells and paper, or their colour, or their shape. In other words, money isn’t a material reality – it is a psychological construct. It works by converting matter into mind.” The Point I am seeking to make is that There is a correlation between high Inflation and revolutionary conditions, Zimbabwe is a classic example where there are $9.3 billion of Zollars in banks compared to $200 million in reserves, official data showed. The Mind Game that ZANU-PF played on its citizens has evaporated in a puff of smoke. ‘’The choice of that moment is the greatest riddle of history’’ and also said “If the crowd disperses, goes home, does not reassemble, we say the revolution is over.” What is clear to me is that Zimbabwe is at a Tipping Point moment.
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25-FEB-2019 :: Zimbabwe finally overhauled its dysfunctional,''whack'' and even Voodoo FX regime. Africa |
Zimbabwe finally overhauled its dysfunctional,''whack'' and even Voodoo FX regime. Zimbabwe’s government dropped its insistence that a quasi-currency known as bond notes are at par with the dollar as it overhauled foreign-exchange trading and effectively devalued the securities. While the government has previously insisted that bond notes and RTGS dollars are worth the same as U.S. dollars, the units currently trade at between 3.66 and 3.8 to the dollar respectively on the black market [Bloomberg] “The introduction of a Zim dollar will be just in name, but the RTGS$ is essentially the Zim dollar.” Tendai Biti is predicting a 6-8 range whilst the Government is looking for it to appreciate to 2.5 which is best characterised as ''Hail-Mary'' economics. This is the right move but I would definitely be short at 2.5, if it ever gets there which is entirely unlikely.
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EDITION 8 - QUARTER 1, 2019 AFRICA'S PROSPECTS MACRO, BUSINESS, CONSUMER AND RETAIL INDICATORS @nielsen Africa |
Amidst times of ongoing and relentless change the Nielsen Africa Prospects Indicator shows country prospects stabilising in Quarter 1’2019, with only two markets changing position on the latest ranking update. Kenya remains in top position, followed by Cote d’Ivoire and Tanzania. Ghana and Nigeria hold on to their stronger fourth and fifth places, respectively, while Uganda slips to sixth place, South Africa weakens to seventh and Cameroon remains in eighth place.
Despite remaining as Africa’s lead prospect, Kenya’s business and retail prospects have weakened relative to other markets. Business sentiment for country and own business growth prospects is less positive than before, but is offset by a stronger macro-economic position, however, GDP growth rates are lower and indications are that the economy lost steam in Quarter 1’2019. Kenyan consumer sentiment is also softer with only 41% of consumers feeling that their outlook for job prospects is good/excellent over the next 12 months, and one third of Kenyans of the opinion that their personal finances are in a “not so good/bad” state, up 11 points from a year ago
Only 17% of Ivorian retailers feel that consumer spend is increasing and just 15% are of the view that consumers are increasingly willing to try new things. Purchase decisions are firmly entrenched in familiarity and trust, with 84% of consumers choosing products with this in mind. The next most influential factors are availability followed by pricing. For manufacturers to disrupt this trust-bound market is extremely challenging. For this reason, new brands and propositions need not be primarily based on the usual affordability aspects, but must establish awareness, consideration and confidence to gain new users. Media and marketing outreach, as well as retail ambassadors, are essential to reach and resonate with Ivoirians.
Tanzania remains in third place, however, improved retail prospects are countered by weaker business prospects. Tanzanian retailers are positive about their growth outlook as the country’s economic development remains resilient. However, business sentiment regarding country growth opportunities has weakened due to unpredictable policy making and protectionist rules that limit foreign investment. Tanzania is one of the poorest nations in the world, with almost 90% of the population living on less than US$2 per day. Poverty reduction that improves consumers ability to spend, is therefore a pre-requisite for companies to realise any significant investment opportunity.
Ghana and Nigeria maintain their healthier positions following turbulent times. According to the IMF, Ghana is expected to be one of the fastest growing economies in the world, and companies share this positive outlook, rating Ghana as Africa’s second best business prospect with improved country and own business growth expectations. In addition, Ghanaian consumer prospects have improved significantly with 36% of retailers of the opinion that consumer spend is increasing compared to only 11% a year ago. Thirty two percent of retailers also believe that consumers are more willing to try new products, compared to only 15% a year ago. Consumer confidence levels regarding job prospects and personal finances are stronger than in Kenya, the current top ranked prospect, which bodes well for Ghana as a long-term market expansion opportunity.
Nigeria retains its improved fifth place, its best level in three years. With economic recovery set to gain momentum in 2019 business prospects have improved in parallel. Nigerian consumers are also the most positive and open to spending, but the major obstacle resides in the retail environment. The ease of doing business sentiment is low as the strain of ongoing double digit inflation takes its toll. Uganda has traded between sixth and eighth place on the overall ranking for the past four years. In Q1’2019 Uganda replaced South Africa in sixth place, with stable economic prospects and strengthening business and consumer prospects. In South Africa, the initial enthusiasm and confidence resulting from Cyril Ramaphosa’s leadership is waning. Businesses’ view on country growth outlook has weakened substantially and close to 80% of South African consumers think the country is in a recession. The major concerns for consumers are the state of the economy followed by job security, debt, crime and political stability. Cameroon struggles with poorer prospects relative to other markets, driven by political tensions, job struggles, constrained finances and unrest in parts of the country, which have impacted economic, business and consumer prospects.
Economic growth remains below population growth for the fourth consecutive year.
Nigeria, South Africa and Angola contribute 60% of SSA’s GDP and face ongoing challenges constraining the overall outlook.
Nigerian consumers are most adventurous when it comes to trying new products.
SSA retailer growth outlook is the most favourable in 3 years (% good/excellent) Tanzania, Cote d’Ivoire, South Africa and Uganda are ahead of the average.
65% of FMCG trade takes place in close- proximity/neighborhood channels (Table Tops, Kiosks, Grocers), with consumers favouring these channels for convenience, ease of access and flexible offerings. 3X FASTER Smaller players are formidable opposition in informal channels. Large multinational FMCG leaders need to find ways to be agile, flexible and relevant to consumers where they shop. The top 10 manufacturers, on average, account for approximately 55% of sales* but are growing at less than 5% per annum, while the smaller manufacturers are growing ahead of 15%.
Kenya
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Kenya starts tightening its belt after debt binge criticism @ReutersAfrica Africa |
President Uhuru Kenyatta’s government has been criticised for ramping up borrowing since coming to power in 2013. Total public debt stands at 55% of GDP, up from 42% when he took over. The critics accuse the government of saddling future generations with too much debt. The government has defended the higher borrowing, saying it is required to fund infrastructure. The finance ministry said it will cut the government’s spending for the 2019/20 (July-June) fiscal year by 2.1%, equivalent to 46.2 billion shillings ($445 million), the budget review showed. The cuts to the budget for this fiscal year were mainly caused by revenue collection shortfalls, the ministry said in its budget review, citing a 123.5 billion shillings gap in the government’s financial year to the end of June. The cuts were attained through “trade-offs and reallocations of the existing budgetary provisions,” it said. The overall budget deficit target, however, remained unchanged at 5.9% of GDP, while projected local and external borrowing also remained broadly within the initial budget unveiled in June, disappointing analysts. “Given the scale of the fiscal deficit, a meaningful fiscal consolidation exercise might require substantive spending cuts alongside big revenue measures,” said Razia Khan, head of research for Africa at Standard Chartered in London. Patrick Njoroge, the governor of the central bank, said on Wednesday that a tightening of the government’s fiscal policy, would give room for some form of monetary easing to attain a balance. The government aims to cut the fiscal deficit to about 3.5% of economic output by the 2022/23 financial year, Yatani said last week.
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