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Macro Thoughts

Home Thoughts

My Uncle Firoz Manji passed away.  When I was 13 and at Westminster
School, Firoz Uncle and Nasim Aunty were my Guardians and I used to
spend most of my weekends with them and their children Laila and Zaher
in Hampstead. Firoz Uncle was erudite, a cross border Specialist long
before it became de rigeur and cooked a fabulous Pasta and an
aesthete. May his soul rest in peace.

Carlos Cruz-Diez, who has died aged 95, harboured a seven-decade
obsession that the common understanding of colour was wrong. “Colour,”
the Venezuelan-born artist believed, “evolves continuously in time and
space.”
“I want people to realise that colour is not a certainty, but a
circumstance,” he said in 2014. “Red is maybe red. It’s not the same
if you hold an object under the sun as when you hold it in the shade.”

Carlos Cruz-Diez (Caracas, 1923 - Paris, 2019) lived and worked in
Paris since 1960. A major protagonist in the field of Kinetic and
Optical Art, a movement that encourages “an awareness of the
instability of reality”*, his body of work established him as one of
the key 20th century thinkers in the realm of color.

French-Venezuelan artist Carlos Cruz-Diez (Caracas, 1923 - Paris,
2019) lived and worked in Paris since 1960. A major protagonist in the
field of Kinetic and Optical Art, a movement that encourages “an
awareness of the instability of reality”*, his body of work
established him as one of the key 20th century thinkers in the realm
of color.

A Time for Everything
3 There is a time for everything,
    and a season for every activity under the heavens:
2     a time to be born and a time to die,
    a time to plant and a time to uproot,
3     a time to kill and a time to heal,
    a time to tear down and a time to build,
4     a time to weep and a time to laugh,
    a time to mourn and a time to dance,
5     a time to scatter stones and a time to gather them,
    a time to embrace and a time to refrain from embracing,
6     a time to search and a time to give up,
    a time to keep and a time to throw away,
7     a time to tear and a time to mend,
    a time to be silent and a time to speak,
8     a time to love and a time to hate,
    a time for war and a time for peace.
9 What do workers gain from their toil? 10 I have seen the burden God
has laid on the human race. 11 He has made everything beautiful in its
time. He has also set eternity in the human heart; yet[a] no one can
fathom what God has done from beginning to end. 12 I know that there
is nothing better for people than to be happy and to do good while
they live. 13 That each of them may eat and drink, and find
satisfaction in all their toil—this is the gift of God. 14 I know that
everything God does will endure forever; nothing can be added to it
and nothing taken from it. God does it so that people will fear him.

15 Whatever is has already been,
    and what will be has been before;
    and God will call the past to account.[b]
16 And I saw something else under the sun:

In the place of judgment—wickedness was there,
    in the place of justice—wickedness was there.
17 I said to myself,

“God will bring into judgment
    both the righteous and the wicked,
for there will be a time for every activity,
    a time to judge every deed.”
18 I also said to myself, “As for humans, God tests them so that they
may see that they are like the animals.
19 Surely the fate of human beings is like that of the animals; the
same fate awaits them both: As one dies, so dies the other. All have
the same breath[c]; humans have no advantage over animals. Everything
is meaningless.
20 All go to the same place; all come from dust, and to dust all return.
21 Who knows if the human spirit rises upward and if the spirit of the
animal goes down into the earth?”
22 So I saw that there is nothing better for a person than to enjoy
their work, because that is their lot. For who can bring them to see
what will happen after them?

Political Reflections

According to one recent study, fully one-fifth of the world's
population will be of retirement age by 2070. This phenomenon is
largely due to trends in the developed world: as the costs of
education, housing and survival skyrocket, many are choosing to have
fewer babies, delay family formation, or simply skip that whole mess
altogether.
We've been over the repercussions of an aging society particularly as
it relates to the economy (more job openings, slower economic growth).
For better or worse, the world already has a model for how these
trends might impact us, at least in the early stages.
And that model is Japan, a country that already has more citizen over
the age of 80 than under the age of 10.
As demographic issues create new and unforeseen challenges, Reuters
reported on an easily-overlooked issue: the revolution in the
consumer-products space that will need to take place in the coming
years. As the population of the elderly explodes, the need for hygiene
products like adults diapers will likely see a commensurate surge (and
many of the companies that make these products are publicly-traded
consumer staples).
The market is already growing, and last year, it expanded by 9%, to
hit $9 billion.
The time may not be far off when more adults need diapers than babies
as the population grows older, potentially a huge opportunity for
manufacturers of incontinence products - if they can lift the stigma
that has long constrained sales.
The market for adult diapers, disposable underwear and absorbent pads
is growing fast, up 9% last year to $9 billion, having doubled in the
last decade, according to Euromonitor.
That is, so long as packaging designers follow a golden rule: Nothing
should be associated with aging.
Sweden’s Essity, the global industry leader, is also trying to reach a
younger audience with its TENA brand and a new line of black, low-rise
disposable underwear called Silhouette Noir.
The advert’s tagline reads: 'secret’s out: 1 in 3 women have incontinence'.
Around 12% of all women and 5% of men experience some form of urinary
incontinence, although conditions vary from mild and temporary to
serious and chronic, according to the Global Forum on Incontinence,
which is backed by Essity.
Essity said it tries to package and market its products in a way that
avoids associations with ageing.

Despite doing the seemingly impossible and getting a new deal from the
EU, he simply doesn't have the numbers in Parliament to pass the
legislation required to deliver Brexit. Holding an election in which
he secures a fresh majority was his only real option.
It's a gamble. Having promised to exit the EU by the end of October,
Johnson risks not only further delays, but the prospect of losing
Brexit altogether. Though he enjoys healthy poll leads right now, a
lot can happen during an election campaign.
"A 15% lead sounds a lot, but voters can come back home or change
their mind," explains Will Jennings, a Professor of Political Science
and Public Policy at the University of Southampton. "The thing to note
with Johnson is he doesn't start even with the level of support
Theresa May had in 2017."
Johnson's first big problem is the main opposition Labour Party. As
May discovered, Jeremy Corbyn, Labour's leader, is a very effective
campaigner. Corbyn surprised everyone in 2017 by picking up far more
seats than expected. He did this despite being an underdog and with
May looking like a strong, popular leader who had a plan to deliver
Brexit and get on with an ambitious domestic agenda.
This time around, his job is arguably far easier. Johnson's aggressive
political strategy since taking office has allowed Corbyn to paint
himself as the anti-Johnson. Corbyn is making a lot of noise about the
fact that Johnson is on friendly terms with the President Donald
Trump, a man who is very unpopular with the British public.
Corbyn says that Johnson's myopic obsession with securing a trade deal
with America would mean selling out the UK's National Health Service
(NHS) to US drug companies.
And Trump handed Corbyn a priceless soundbite earlier this week, when
he called the London-based talk radio station LBC to heap praise on
Johnson and say that the opposition leader would take the UK "into
such bad places."
The NHS is the closest thing that the UK has to a religion and it will
no doubt feature heavily in this election. And as Jennings points out,
this could prove tricky for Johnson's Conservatives "if they end up
getting sucked into winter NHS crisis" in the middle of a campaign.
Also in Corbyn's favour this time is the fact that he has a very clear
path to office, something no one believed could happen in 2017.
If the UK ends up with another hung parliament and Corbyn is the most
successful loser, he could credibly make the case he should head some
kind of coalition or minority government. The price for doing so would
almost certainly be a commitment to some kind of second Brexit
referendum.
This would be terrible for the Conservative party. Right now, the
party is reluctantly united around Johnson and his Brexit deal.
However, if another referendum were to happen, the party would tie
itself in knots over exactly what position to back.
Losing Brexit isn't the only thing spooking Conservatives. Corbyn is,
in the eyes of Conservatives, a danger to the nation. They believe he
is a threat to national security and that his hard-left agenda would
wreck prosperity.
In the words of a senior government advisor, "people need to know that
Corbyn will take their houses, nationalise their jobs and tax them to
death. It should terrify anyone involved in this election. There is a
real chance that Corbyn could end up in Downing Street."
A Labour spokesperson refuted this, telling CNN that "Labour will put
wealth and power in the hands of the many. Boris Johnson's
Conservatives, who think they're born to rule, will only look after
the privileged few."
Conservatives also fear that Corbyn's dream of stepping inside Downing
Street would come at the cost of getting Scottish nationalists on his
side. And the price for this would be giving Scotland another
Independence referendum.
After three years of Brexit chaos, many Scots now believe that the
best path is to go independent and rejoin the EU as a full member
state. Experts are split on exactly how that vote would go, but for a
party formally known as the Conservative and Unionist Party, it's a
terrifying prospect that would forever be blamed on Johnson's
administration.
Conservative aides are privately concerned that Johnson has not
learned the lessons of 2017 and are worried that his hubris will come
to bite them. Talking to senior staffers, their most optimistic
predictions are that Johnson will win a small majority and get his
Brexit deal through Parliament, only for the party to fall apart over
the UK's future relationship with Europe.
They point out that even if the deal passes, the UK only has 11 months
to get the rest of Brexit sorted. And that will result in extending
the transition period.
They are also well aware of the real prospect that the election will
result in another hung parliament. That effectively kills the Johnson
government, something which has not gone unnoticed in Brussels.
EU officials are pleased that an election is happening, hoping that it
will finally provide some answers to this seemingly impossible
question. But they also think that a hung Parliament is the most
likely outcome. "To be honest, there is already chatter about the next
extension," an EU official told CNN.
If that happens, the deadlock continues. "If there's no majority then
there's a question of whether he (Johnson) resigns. I am not even sure
we get to a second referendum ... before we even get there we could be
looking at a February election," says Professor Will Jennings.
Johnson's Brexit gamble was a table-flip moment. It's the last option
for a Prime Minister who's been on the back foot since day one. But in
flipping that table over, he could soon discover that there was far
more on it than Brexit. Johnson might live to regret wanting to have a
crack at this leadership business.

Conclusions

I think @JeremyCorbyn gets within 4% and that therefore the above
Prognosis is the most likely outcome.

In China, every day is Kristallnacht.
Eighty-one years ago this week, in what is also known as the “Night of
Broken Glass,” hundreds of synagogues and Jewish cemeteries in Nazi
Germany were damaged or destroyed, along with thousands of
Jewish-owned businesses.
It was in a sense the starting gun for the genocide that culminated in
the extermination camps of Auschwitz, Sobibor and Treblinka.
In western China, the demolition of mosques and bulldozing of
cemeteries is a continuing, relentless process.
In a cultural genocide with few parallels since World War II,
thousands of Muslim religious sites have been destroyed. At least 1
million Muslims have been confined to camps, where aging imams are
shackled and young men are forced to renounce their faith.
Muslims not locked away are forced to eat during the fasting month of
Ramadan, forced to drink and smoke in violation of their faith, barred
from praying or studying the Koran or making the pilgrimage to Mecca.
And — in possibly the most astonishing feature of this crime against
humanity — China has managed to stifle, through 21st century
repression and age-old thuggery, virtually any reporting from the
crime scene.
Which makes all the more significant the publication last week of a
heartrending compendium of evidence: “Demolishing Faith: The
Destruction and Desecration of Uyghur Mosques and Shrines,” by Bahram
K. Sintash.
Sintash, 37, lives in the United States but grew up in what is now, he
says, “a police surveillance state unlike any the world has ever
known.” Sintash knows: Chinese police took his father into custody in
February 2018, and Sintash has not heard from him since.
Unable to help his father — who, if he is still alive, turned 69 last
month — Barham has channeled his anguish into documenting the
destruction of the Uighur heritage.
Uighurs — Barham, his father and millions of other Chinese citizens —
are an ethnically Turkic and religiously Muslim people. For decades,
they found a place in Communist China. In fact, the Chinese Communist
Party vetted imams, approved their sermons and authorized the study of
Uighur culture.
But in the increasingly intolerant rule of Xi Jinping, nothing that
competes with party loyalty can be tolerated. Previously vetted
clerics, even octogenarians, receive 20-year sentences. Anything that
looks too “Islamic” — even a dome atop a department store — is
flattened.
Based on satellite imagery and interviews with recent exiles —
escapees might be an apter term — Sintash estimates that 10,000 to
15,000 religious sites have been destroyed, he told a conference at
the National Endowment for Democracy last week.
Many of these are village mosques, too small to stand out in Google
satellite imagery, and no one on the ground will send pictures,
because to do so would guarantee confinement in the camps. But Sintash
has documented the destruction of more than 150 larger mosques in
before-and-after, shrine-to-parking-lot photographs. In big cities,
one mosque may be spared, for tourism or propaganda purposes, but even
that one will have its dome and minarets removed, its religious
inscriptions displaced by party banners.
Even starker are the images of cemeteries, such as the centuries-old
Sultanim burial ground in Hotan, replaced by what look like giant
fields of mud.
“My father and my grandfather were also buried in this cemetery,” one
exiled Uighur scholar told Sintash. “The cemetery was the most
important holy place for millions of people to go and visit in Hotan
every year.”
Workers in the world of human rights tend to be highly reticent when
it comes to Nazi analogies. The Holocaust was a unique event.
Yet at the unveiling of the report last week, the Holocaust kept
pushing itself into the conversation as the only adequate point of
comparison. Omer Kanat, director and co-founder of the Uyghur Human
Rights Project, noted the Kristallnacht anniversary.
Carl Gershman, president of the National Endowment for Democracy,
likened the brave reporters of Radio Free Asia to Jan Karski, the Pole
who tried to alert the West to Nazi atrocities.
Those RFA reporters are living in exile, since China does not let them
in, but dozens of their family members in western China have been
imprisoned in retribution for RFA’s groundbreaking journalism on this
cultural genocide.
And what is the impact of such destruction of sacred spaces?
Rahile Dawut is a respected scholar who in 2017 was preparing to
travel to Beijing from her home in Urumqi when she was taken away.
Years before she disappeared, she said, “If one were to remove these .
. . shrines, the Uighur people would lose contact with earth. They
would no longer have a personal, cultural and spiritual history. After
a few years we would not have a memory of why we live here or where we
belong.”
Sintash himself says he fears this is China’s “final solution” to
destroy the Uighur people.
“I don’t know if my father died or is alive right now,” he says. “But
I can see the mosque where we prayed is gone.”

'At the moment of vision, the eyes see nothing'

I have found as I have gotten older that Time and even the World
simply does not move in a linear fashion.   I too like all of you I am
sure, am waiting for that magic Pill which will reverse time and give
me back my 21 Year Old Body which of course was an Enzo Ferrari and
which I surely in a folly of youth did not appreciate at the time and
instead coveted the Car which was nothing.  Yuval Noah Harari leads us
to believe the arrival of such a Pill that will reverse time cannot be
that far away. I would like to keep my more mature mind and not get
back that Testosterone fuelled mind machine of old, however.  A lot of
Folks will have read Lord of the Flies which is a 1954 novel by Nobel
Prize–winning British author William Golding. The book focuses on a
group of British boys stranded on an uninhabited island and their
disastrous attempt to govern themselves not unlike the Post Brexit
vote United Kingdom.  However, Fewer Folks will have read William
Golding's book ''The Spire'' and in that book Golding writes

''At the moment of vision, the eyes see nothing''

''The moment of Vision'' is in essence a non-linear thing, its a
moment of deep insight. The President of the United States of America
currently undergoing an impeachment process at the hands of
''Nervous'' Nancy Pelosi [his moniker which probably is a linguistic
transference of a sort and whom [Speaker Pelosi and not the Trumpster]
I find sexy but that's a discussion I have to have with my Wife] was
boo'ed for the second consecutive weekend, This weekend he was boo'ed
at a UFC 244 event at Madison Square Garden. Pollice verso or verso
pollice is a Latin phrase, meaning "with a turned thumb", that is used
in the context of gladiatorial combat. It refers to the hand gesture
or thumb signal used by Ancient Roman crowds to pass judgment on a
defeated gladiator. The Madison Square UFC 244 verso pollice moment is
a Shakespeare level moment for President Trump and of more import than
the Impeachment process because Impeachment is political and therefore
the outcome should split on Political Party lines. The Republican
Party will be making a hard nosed political calculation this weekend
that if the President is getting booed at a UFC event, the Base is
lost. Vice President Pence who is an evangelical Christian [and is in
the habit of praying with another evangelical Christian and Nobel
Prize Winner far away in Addis Ababa, allegedly] is the coming Man and
this could happen real quick.

''At the moment of vision, the eyes see nothing''

Staying with the US, we learnt last week that the US National Debt
crossed $23 Trillion, having $1.3 Trillion in 12 Months. The US Stock
Indices posted Fresh record highs. This is now unhinged. I recall
sitting in the Offices of a Gentleman called Julian Robertson in the
1990s. Robertson founded Tiger Management, one of the earliest hedge
funds. Robertson is credited with turning $8 million in start-up
capital in 1980 into over $22 billion in the late 1990s and I met him
at the Apogee and subsequently Mr. Robertson bet just about everything
on shorting the NASDAQ. And the Story goes like this. The NASDAQ
stayed irrational and even got more irrational longer than he could
stay solvent. Of course, he was right and the NASDAQ subsequently
crashed in what was characterised as the ''DOT-COM'' bubble. The Point
is this, we can see the dislocation, we can smell the ''stink'' of it
[Think WeWork's Neumann - admittedly never made it to the Public
markets] but timing it is an both an Art and a science. And always
remember, the entire Paraphernalia of the Financial markets and its
entire raison d'être is there to prevent the Bubble bursting.  The
Elastic Band will snap because we are in ''Voodoo'' territory but when
and will it inflate further before snapping and what will happen in
the moment of snapping.

And make no mistake, everyone is riding the wave. Its all ''hocus
pocus''. Xi's China is in a similar Fix and fully loaded with debt. I
came across this in an Article in War on the Rocks

''Once Xi becomes weak, sick, old, or dies, various interests within
China will likely have a weakened institutional ability to deal with
the distribution of interests and managing factional rivalry''

The Ministry of Sound ["My concept for Ministry was purely this: 100%
sound system first, lights second, design third (in that order); the
reverse of everyone else’s idea."] 4 am[ers] otherwise known as the
BITCOIN Evangelists will of course all be screaming

''Aly-Khan, Aly-Khan Just Buy Bitcoin its going to $50,000, $100,000,
$1,000,000.''

Last week they all got carried away when Xi apparently gave Bitcoin
his imprimatur.

It took China about 3 days of being officially interested in
blockchain to make their intentions clear: transparent, panoptichain
immutable social credit dystopia. @nic__carter
All you people that are ready to forsake all of your values for the
sake of riding some authoritarian driven pump, I want nothing to do
with you @nic__carter
I don’t believe in the god damn “underlying technology”, I believe in
the FREEDOM  that the technology gives us. From autocrats and
dictators. @nic__carter
It matters because ppl are interpreting it as validation of
permissionless blockchains when it represents a perversion and
corruption of those ideals @@nic__carter
Not to mention the ability to shut-off access to anyone on the system
with a “flip of a switch”. A 21st century authoritative government’s
dream @Rhythmtrader
The terrifying reality of a cashless society @mc_madvillian

I am of the view that BITCOIN and crypto is a Jeffrey Edward Epstein
[and his cast of characters] level Con and I am having nothing to do
with it other than occasionally looking in and admiring the
sophistication and level of the Con. Its breathtaking.

The most referenced Poem today is WB Yeats The Second Coming

Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;

Its easy to see why.

A single large player manipulated the price of bitcoin as it ran up to
a peak of nearly $20,000 two years ago, a new study concludes.
The study reviewed the period between March 2017 and March 2018, when
the price of bitcoin soared and its total market value rose to $326
billion.
About half of that increase was due to the influence of a manipulation
scheme, according to the study’s authors.
They said the unknown manipulator operated from a single account at
Bitfinex, the largest cryptocurrency exchange at the time.
The manipulator used another cryptocurrency, called tether, to boost
demand for bitcoin, leading to the price surge.
It isn’t clear by how much or if the manipulator profited. Bitcoin
traded at nearly $9,200 on Sunday.
The study—written by John M. Griffin, a finance professor at the
University of Texas with a background in forensics, and Ohio State
University finance professor Amin Shams —was accepted for publication
by the influential Journal of Finance and will be published online
Monday.
An earlier version of the study argued tether was being used to
manipulate bitcoin prices, but didn’t connect the scheme to one
entity.
The paper doesn’t definitively conclude who the manipulator was. But
it strongly suggests Bitfinex executives either knew of the scheme or
were aiding it.
“If it’s not Bitfinex,” Mr. Griffin said in an interview, “it’s
somebody they do business with very frequently.”
Bitfinex dismissed the study’s findings. Stuart Hoegner, the company’s
general counsel, said it “lacks academic rigor” and offered no proof
of its claims. “It is the global rise of digital currency that has
driven the market’s demand for tether,” he said.
Bitfinex and the company that controls tether, called Tether Ltd.,
have common ownership and are run by the same executives. Both
companies are being investigated for alleged fraud by the Justice
Department and the New York Attorney General’s office.
Tether is similar to bitcoin, but with key differences: Bitcoin trades
freely, while tether’s value is pegged to the dollar via an asset
reserve. For every tether in circulation, there purportedly is $1 in
the reserve. This kind of digital currency is called a stablecoin.
If the price of bitcoin was manipulated, this would undermine a key
feature of the crypto market, said Mr. Shams.
“The promise of a decentralized financial system was that it would be
free from the influence of banks and governments,” he said.
“Ironically, there are large, new entities that have gained
centralized control.”
For their study, the two professors mapped the entire transaction
history of bitcoin and tether, a process that involved sifting through
more than 200 gigabytes of data. They then traced the movement of the
two currencies.
That enabled then to show how tethers moved across various exchanges
and were traded for bitcoins. Rather than showing a random pattern
that would indicate broad demand, they instead found tethers flowed
through tightly clustered pathways—starting with one large account at
Bitfinex—indicating control by a single entity.
Tether has become primarily an asset used by crypto exchanges to
facilitate trading. About 75% of all bitcoin trading is in exchange
for tethers, according to data from research firm CryptoCompare.
According to Tether, it creates new units of tether whenever it gets
orders from its customers. But the company has released only limited
information to prove reserves exist. In April, the company revealed in
a court filing that tether was only 74% backed by reserves.
If new tethers were being created in response to orders, then the
price of bitcoin would reflect natural demand.
If tethers were being “printed” without backing, that could lead to
artificial demand if they were used to purchase bitcoin. In some ways
this is akin to central banks or governments printing money to
stimulate economies, often leading to inflation.
The Griffin-Shams study set out to determine whether tethers were
being printed in response to user demand. The authors laid out and
tested a number of hypotheses to see if Tether’s claims of dollar
backing for tethers could be proven or disproved.
The study’s conclusion was tether was being printed regardless of
customer orders.
One pattern was especially illustrative: The study looked at 95
nonconsecutive hours that comprised the largest percentage of tether
dispersals. This showed a consistent pattern: In the three hours
before those dispersals, the price of bitcoin was falling.
Immediately after the dispersal, the price began rising. Those 95
hours accounted for 59% of bitcoin’s compounded returns between March
2017 and March 2018.
“Even a fairly small amount of capital can manipulate the price of
bitcoin,” Prof. Griffin said.
To be sure, the data could have other interpretations: The authors,
for instance, didn’t have access to Bitfinex’s and Tether’s bank
accounts. That information would show definitively whether the
companies were creating new units of tether in response to real
customer demand.

"The Turks have always pursued an unhappy policy in regard to native
populations," wrote German Gen. Erich Ludendorff of his World War I
Ottoman allies. "They have gone on the principle of taking everything
and giving nothing. Now they had to reckon with these people (Kurds,
Armenians and Arab tribes) as their enemies." The Turkish army, driven
out of Syria after four centuries in 1918 by the British and "native
populations," is back. Turkish President Recep Tayyip Erdogan's
involvement in Syria reverses the policy of the republic's first
president, Mustafa Kemal Ataturk, that kept Turkey out of the Arab
world. Ataturk looked westward and saw the futility of returning to
lands that had rejected Turkish rule.

That arrangement worked for Turkey until 2011, when the uprising in
Syria opened the way to foreign interference. The United States, the
United Kingdom, France, Saudi Arabia, Qatar and the United Arab
Emirates were backing assorted militias in their effort to depose
Syrian President Bashar al Assad. Erdogan would not be left out. His
border with Syria offered the most extensive terrain for infiltrating
fighters and war materiel. Moreover, his Justice and Development Party
had a long friendship with Syria's Muslim Brotherhood, whose attempt
to depose al Assad's father, Hafez al Assad, in 1982 ended with the
infamous massacre in Hama. Erdogan looked to the Muslim Brotherhood
and its offshoots to play a leading role in the resistance to the
younger al Assad. In 2012, a Syrian former Cabinet minister told me
that Erdogan had asked al Assad to put Muslim Brothers into his
Cabinet. When al Assad refused, the former minister said, Erdogan made
clear that he would back all efforts to remove the president and
replace him with Islamists.

Step by Step Into Syria
One of the stated reasons for excluding the Muslim Brothers, in
addition to their history of violent opposition to the regime, was
that Syria had not legalized religiously based political parties. The
divisive effects of sectarian parties had played out badly in Lebanon
after 1975 and had done little to benefit Iraq after the U.S. invasion
in 2003.

Al Assad countered Erdogan's support for his opponents by allowing
Turkey's Kurdistan Workers' Party (PKK) to threaten Erdogan from
Syria. The PKK was instrumental in the formation of the Syrian Kurdish
People's Protection Units (YPG) that fought with the United States
against the Islamic State without joining the U.S.-backed opposition
to al Assad.

Erdogan went step by step into Syria, opening the border to jihadists,
facilitating weapons deliveries and, when needed, backing the rebels
with firepower — as when Turkish artillery shelled the Armenian Syrian
village of Kassab before the Islamists conquered it in March 2014.
Barely one year later, Erdogan sent Turkish troops over the border on
an innocuous mission, code-named Operation Shah Euphrates, to rescue
the remains of Suleyman Shah, an ancestor of the first Ottoman sultan.
Erdogan's next venture into Syria was an all-out invasion, Operation
Euphrates Shield, ostensibly to combat Islamic State militants but
effectively to force the YPG to retreat from the border zone in the
northwest.

George Orwell would have appreciated Turkey's operational code names in Syria.

Then came Operation Olive Branch from January to March 2018 in the
largely Kurdish province around Afrin. In that onslaught into a
hitherto peaceful corner of northwestern Syria, Turkey relied on about
25,000 Free Syrian Army and other rebel fighters to occupy towns and
villages. "Instead of protecting vulnerable civilians' rights, these
fighters are perpetuating a cycle of abuse," Human Rights Watch
declared. The United States refrained from assisting its Kurdish
allies, a precedent for its behavior when, following his now-famous
telephone conversation with President Donald Trump, Erdogan ordered
his army and its allied Islamist militia to advance into northeastern
Syria on Oct. 9. Turkey's Operation Peace Spring followed the
Operation Olive Branch game plan (George Orwell would have appreciated
these operational names) that expels Kurds, civilians and fighters,
from the northeast, executes Kurdish politicians and gives Turkey
control of a 20-mile-wide belt from the Mediterranean to the Iraqi
border.

Despite international outrage and sanctions, Erdogan's decision to
expand his military occupation of northwest Syria to the northeast and
destroy the YPG is popular among all factions in Turkey. The new mayor
of Istanbul, Ekrem Imamoglu, who won office on promises to resist
Erdogan's Islamist and anti-Kurdish policies in Turkey's most
cosmopolitan city, backs the military operation. On Twitter, he called
the YPG a "treacherous terror group," betraying the Kurds who helped
elect him. A leading opposition daily, Sozcu, headlined its front
page, "Americans, Europeans, Chinese, Arabs — all united against
Turkey. Bring it on." The pro-war fever infecting Turkey replicates
the parades, flag-waving and oaths of allegiance that accompanied the
country's entry into World War I in 1914. When the Ottoman fleet
attacked Russia's forts along the Black Sea, Turkish political parties
and media outdid each other to demonstrate support for an offensive
that started well and ended badly. Turkey lost its empire, and the
European Allies occupied Istanbul.

Much to Gain, Lots to Lose
Turkey has much to gain if its Syria gamble succeeds — control of a
large area it abandoned in 1918, removal of thousands of Syrian
refugees from Turkey to parts of Syria they do not know, containment
of the YPG and PKK to areas south of its so-called safe zone and a
voice in Syria's future. It also has much to lose — the lives of its
soldiers, perpetual warfare along its border and the undying animosity
of Kurds in both Syria and Turkey.

Erdogan's new collaboration with Russian President Vladimir Putin —
with whom he agreed at Sochi, Russia, on Oct. 22 to deploy joint
Russian-Turkish patrols in the 20-mile security zone that he has
ordered the Kurds to evacuate — dilutes his control in northeastern
Syria. It also permits al Assad's Syrian army to return to an area
where Syria has a greater claim to sovereignty than has Turkey. The
obstacle to ending the eight-year Syrian civil war remains Turkey's
sole control of the northwestern Syrian provinces of Idlib and Aleppo
and the estimated 60,000 rebels, most of them jihadists, it controls
there and has used as its mercenaries against the Kurds. The
politician most likely to decide the fate of that area is, as with the
Kurdish northeast, neither Trump nor Erdogan, but Putin. Watch that
space.

The politician most likely to decide the fate of northwestern Syria
is, as with the Kurdish northeast, neither Trump nor Erdogan, but
Putin.

Trump permitted the Turkish invasion, then decided it was not such a
good idea and, while not sending the Turkish army back into Turkey,
imposed selective economic sanctions, which he lifted Oct. 23. Many
Americans support Trump's stated desire to end the "endless wars" in
the belief that taxpayers' money is better spent on education, health
and infrastructure at home than on military operations abroad. Trump,
however, has not brought troops home. About 200 American soldiers are
to remain at al-Tanf military base, part of a 55-square-kilometer
(21-square-mile) area of oil-rich desert where the borders of Syria,
Iraq and Jordan meet. He redeployed 1,000 special operations forces
from Syria to western Iraq. He is sending 1,800 soldiers to Saudi
Arabia. He is threatening Iran with war following his abrogation of
the 2015 nuclear deal. He supplies weapons, intelligence and
logistical support to Saudi Arabia's relentless war in Yemen.

Ending the endless wars is not unlike decolonization, which Europeans
undertook following the bankruptcy of their economies during World War
II. Most of the colonial withdrawals were as disastrous for the
countries involved as the colonial conquests had been. Think of the
massacres that followed the partition of India in 1947, the war in
Palestine when the British withdrew in 1948, the French wars in
Algeria and Vietnam, and Belgium's criminal actions in the Congo.
Among the most irresponsible colonial retreats was Portugal's from
lands it had occupied for four centuries: Angola, Mozambique and East
Timor. The first two suffered protracted civil wars, while Indonesian
troops invaded East Timor in December 1975 with American approval and
massacred a third of its population by the time they were forced to
leave in 1999. Now the United States, after arming and earning the
trust of Syria's Kurds, is leaving them to face the Turkish onslaught.

When President Barack Obama considered the covert operation to train
and equip Syrian rebels in 2013, code-named Operation Timber Sycamore,
he said to his aides, "Tell me how this ends." As Turkey is
discovering, it doesn't.

International Markets

Euro 1.1128
Dollar Index 97.582
Japan Yen 108.80
Swiss Franc 0.9892
Pound 1.2883
Aussie 0.6908
India Rupee 70.7065
South Korea Won 1157.52
Brazil Real 4.0123
Egypt Pound 16.1399
South Africa Rand 14.7340

More pressure on Uber shares expected on Wed, when stock lockup for
1.7bn add shares expires.

Commodities

Brent for January settlement gained 6 cents to $62.19 on the
London-based ICE Futures Europe Exchange. The contract climbed 44
cents to close at $62.13 on Monday.
The global benchmark crude traded at a $5.58 premium to WTI for the same month.

Tang Jie, who works on a pig farm, says he used to get pork from the
wet market near his home every day. But he hasn’t bought any in two
months. And his favorite dish, stewed pork ribs with lotus root, has
been cut from the menu at his local restaurant.
“We can barely afford the prices,” Tang, a resident of the
southwestern Chinese city of Chengdu, said at a hog conference last
month. “Restaurants are changing the menu, and using less pork because
of the high prices.”
In south Beijing, small restaurant-owner Yang Yi says he’s had to risk
losing customers by raising the price of his popular braised pork
dish, Hong Shao Rou, by 17% to 68 yuan. He said he can’t otherwise
absorb the higher cost of the meat, which spiked nearly 70% in
September after hog numbers collapsed more than 40% from a year
earlier because of African swine fever.
Tang and Yang are hardly alone in counting the toll of the deadly
outbreak that has devastated hog herds in China. The astonishing surge
in pork prices, the staple meat for Chinese people, could yet run many
more months and on the way see consumption in the world’s biggest
market halved. The question is whether that demand will ever come
back.
“There’s simply not enough of the meat domestically, or globally, for
China,” said Ma Chuang, deputy secretary general at the Chinese
Association of Animal Science and Veterinary Medicine in Beijing.
At current prices, the country’s pork consumption could fall by 50%,
said Cheng Guangyan, director at the farm ministry’s Institute of Food
and Nutrition Development in Beijing.
Once the cheapest meat, pork dominated Chinese tables, accounting for
more than 60% of animal protein consumption. Households are now
switching to other sources, putting up the price of alternates like
beef and poultry, alarming the government and giving the central bank
an inflation headache. Even egg futures hit a record last week.
Record domestic pork prices have also driven the nation’s meat imports
to heady levels. Overseas pork purchases jumped more than 70% in
September from a year earlier, while beef was up over 50%, according
to customs data.
And elevated prices could yet worsen the outlook as farmers delay
slaughter to allow their pigs to grow larger while retaining more sows
as breeding stock, said Jim Huang, head of independent consulting firm
. Huang said he expects pork prices to hit 60
yuan a kilo by the end of 2019 as supply drops 70% from last year’s
level.
Still, having failed to wean the nation off fattier meats in recent
years, the collapse in pork consumption could yet deliver health
benefits, said the farm ministry’s Cheng. But, old habits may be hard
to break once the crisis passes, and chops, ribs and pork-belly become
more affordable.
“From a nutritional point of view, we are encouraging citizens to take
more chicken, eggs and fish instead of red meat,” she said. “They may
be unhappier as chicken isn’t as delicious as pork,” she said.

Cold storage facilities across the U.S. have just hit record-high
levels of pork bellies, the cut of the pig used to make bacon,
reported Bloomberg. Much of the oversupply problem stems from farmers'
increasing herd sizes ahead of a possible trade deal that was expected
to occur earlier this year.
Farmers in 1H20 across Central and Midwest regions were desperately
trying to increase herd sizes and or fields planted of corn and
soybean because President Trump kept touting imminent trade deal in
the press.
What the farmers didn't realize is that there was no trade deal at the
time, and the impending trade deal comments were only to boost the
stock market. What this created was massive misguidance by the
government that has led to shocking oversupplied conditions.
According to new U.S. government data published last week, there are
more than 40 million pounds of pork bellies in cold storage facilities
across the U.S. The levels are so high that some cold storage
facilities could run out of space. The last time storage facilities
saw this much pork belly was 1971.
Hog producers, listening to every trade headlines from the Trump
administration, quickly expanded herds through spring and summer with
the anticipation of an imminent trade deal with China. U.S. herd
levels rose to 7.7 million heads as of Sept. 1, a level not seen since
1943.

Emerging Markets

"Buy EEM, FXI and/or EWZ calls for tactical upside on trade truce,
rebounding growth, light positioning, and volatility near multi-year
lows."

Frontier Markets

Sub Saharan Africa

Signaling what will be a major uptick in US drone activity across
western Africa, US African Command (AFRICOM) announced Friday its
airbase Agadez, Niger has gone operational, not just flying
surveillance drones as was originally expected, but also armed combat
drones.
Flights from the base, called Air Base 201, began last week and the
patrols are to aid US-Nigerien military patrols in rooting out
regional ISIS militants and other Islamist factions which have been
threatening the area.
Specifically US officials say the armed drone program is badly needed
due to prior ISIS ambushes on US-Nigerien troops.
The US Air Force, which has described the $110 million constructed
airfield as among the harshest locations in the world from which the
military operates, endured multiple delays in establishing the base
given the difficult remote desert environment.
"I would say that the construction of Air Base 201 will go down as one
of the most Herculean efforts in the history of the United States Air
Force," Brig. Gen. Michael Rawls of the Air Force's 435th Air
Expeditionary Wing in Africa described earlier this year.
The new airfield can reportedly allow surveillance and reconnaissance
across the extensive Lake Chad Basin area, which includes Chad,
Cameroon, Nigeria and Niger.
This will no doubt further commit the Pentagon to a long-term presence
in Niger amid continued broader AFRICOM expansion.

The deal should energise a continent of 1.2bn people and $3tn output
At a time when much of the world seems to be cooling on the idea of
free trade, at least one region is growing increasingly enthusiastic:
Africa.
This year, 54 of the continent’s 55 states — with only recalcitrant
Eritrea on the sidelines — signed up to a free trade area that
encompasses 1.2bn people and output of more than $3tn.
The project has gathered strong political momentum, going from
conception to enactment in less than three years. Cyril Ramaphosa,
South Africa’s president, has called it the continent’s boldest
attempt to bring to life the pan-African ideals espoused half a
century ago by independence leaders such as Kwame Nkrumah.
Colonialism left a Balkanised continent of primarily subscale
economies. Most of them have arbitrary borders. Sixteen are
landlocked. The African Continental Free Trade Area is an opportunity
to remake the continent in its own image and in its own interests.
There is a strong economic case to be made. Only about 18 per cent of
African exports are traded within the continent, against nearly 60 per
cent for Asia and 70 per cent for Europe.
African countries have agreed to cut tariffs to zero on 90 per cent of
goods. That and other trade-facilitating measures should increase
intra-continental commerce by more than 50 per cent in four years,
according to the UN Economic Commission for Africa.
More trade could bring many advantages. Too many African countries are
stuck in colonial-like trading arrangements, exporting raw materials
and importing manufactured goods.
The free trade area should encourage both specialisation and higher
value-added exports. Research shows that African countries trade more
sophisticated goods with each other than they do with the outside
world.
More trade could also help the continent reverse damaging
deindustrialisation. A properly functioning free trade area could help
fix that by giving impetus to efforts to attract investors with the
prospect of a market of 1.2bn customers.
Africa needs more manufacturing, from canning fruit to assembling mobile phones.
There are many obstacles. The greatest is effective implementation.
The African Union has a history of grandiose pronouncements but poor
follow-through.
The next phase will be to hammer out dull but vital agreements on
non-tariff barriers, rules of origin and dispute resolution.
Countries also need to build the infrastructure — soft as well as
physical — to facilitate smooth trade, linking their countries with
road, rail and interconnecting power grids.
They also need to streamline customs procedures, often maddeningly
slow. Just as important, they must redouble efforts to lift education
standards, with a particular emphasis on the vocational skills that
can help people participate in more interconnected economies.
The record of Africa’s multiple regional free trade areas is mixed.
The east African Community, which is moving towards a customs union
and has progressed further than most with joined-up infrastructure, is
probably the most advanced. It should act as a template for the
continent.
As recent xenophobic attacks in South Africa show, Africa is also
prone to a backlash against the unrestricted free movement of people.
Leaders will have to do a good job of explaining the potential
benefits of free trade and of enacting policies to make these real.
“We have reached a moment in our history when Africa needs investment
more than it needs foreign aid,” Mr Ramaphosa told the FT’s Africa
Summit in London last month. In this, multilateralism is the best way
forward.

The overarching and interestingly at a time when the Rest of the World
seems to be embarked on a process of Fragmentation and Globalisation
coming apart at the seams,
Africa is proudly moving counter-trend with the African Continental
Free Trade Area (AfCTA).
Of course, the Devil is in the Details of the execution and such
things can simply fall apart in a deluge of Non-Tariff Barriers but it
is a Silver Bullet particularly
if we allow the free circulation of our People who are natural
Entrepreneurs. Just look outside, there are markets just about
everywhere.

This data excludes losses counted by Private Sector Foundation and
those incurred by other service providers like transporters, health
and education providers

Police officers who were Monday deployed at Mandela National Stadium
in Namboole, Wakiso District, to block a scheduled press conference by
the leaders of the Forum for Democratic Change (FDC), have arrested
the party’s former president, Dr Kizza Besigye.
The cops smashed the windscreen of Dr Besigye’s car before pulling him out.
They took him to a waiting police vehicle and drove to an unknown destination.

A section of members of Uganda Journalists Association Monday camped
at the Central Police Station to demand the release of Mr Bashir
Kazibwe, their president, who was among several journalists who were
arrested.  Video by Kelvin Atuhaire

The World Bank could provide as much as $5 billion to Democratic
Republic of Congo over the next five years if its new government
commits to raising more revenue, fighting corruption and opening up
its economy.
The financing would be a welcome boost for Congo’s new president,
Felix Tshisekedi, who has promised a bold series of costly social
programs, including free primary-school education for more than 20
million children.
Last month, the International Monetary Fund said it’s considering
resuming lending to the country after a seven-year hiatus.
The World Bank is offering to support parts of the government’s
agenda, “but not at any price,” Jean-Christophe Carret, the World Bank
country director for Congo, said in an Oct. 30 interview in Kinshasa,
the capital.
“We will help if they are credible in their will to reform a lot of
things in the economy.”
Aid from the Washington-based lender will be conditioned on government
commitments to increase revenue and improve management of everything
from health and education to Congo’s burgeoning mining industry,
Carret said.
The World Bank is also pushing the government to reduce the number of
tax exemptions it gives to various businesses, he said.
Congo is the world’s largest cobalt producer and Africa’s biggest
miner of copper and tin. It’s also rich in deposits of gold, oil and
other natural resources.
Despite its immense mineral wealth, Congo’s 81 million people are
among the poorest in the world. The nation annually ranks near the
bottom of the most difficult places to do business.
Some of the World Bank’s demands will focus on liberalizing the
economy, particularly in opening up the supply of water, electricity
and internet coverage, Carret said.
“The private sector needs to want to invest,” he said. “That is the
only condition under which we can bring the population out of poverty
as quickly as possible.”
A new IMF loan program would also open the door to $1.5 billion of
budget support from the World Bank over three years, Carret said. The
IMF halted its last program with Congo in 2012 amid worries about
corruption in the mining industry.
Any new financing for Congo must first be approved by the World Bank’s
board of directors, which already agreed to a $500 million program to
fight childhood malnutrition in May.
The bank has about $1 billion left in its most recent program that ends June 30.
Part of that money is destined for Tshisekedi’s free primary-school
initiative, which should cost about $1.1 billion per year, Carret
said.
The Bank will contribute about $400 million a year for three years if
the government takes steps to make the program sustainable.
“It’s a governance program for the education sector,” Carret said.
Congo’s constitution guarantees free primary education, but
mismanagement and the country’s tiny budget, with only about $5
billion in revenue, have never allowed it.
One quarter of Congo’s population is primary-school age.
World Bank results have been mixed in Congo, which is still recovering
from years of war.
Carret called a World Bank plan to fix the country’s bankrupt national
rail system “a failure” after it spent $380 million through last year.
In 2016, the lender pulled $73 million in funding for Congo’s Inga III
hydropower plant over worries about transparency.
Development of the $14 billion project has stalled, as the country has
yet to find a way to finance feasibility studies. The World Bank has
no more interest in Inga III, Carret said.
It will instead focus any new funding on smaller energy projects that
are quicker to launch, like micro-hydro plants and solar power, he
said. Only about 10% of Congolese have access to power.
World Bank funding to Congo is half grant and half “highly concessional” loans.

“We’re still at a point where that car has not hit that wall, but you
can definitely see that’s where they’re going.”
BofA expects the Baa3 rating to be cut after a budget statement in
February. If so, South Africa will be excluded from the FTSE World
Government Bond Index, triggering as many as $15 billion-worth of
outflows from funds that track it, according to Bank of New York
Mellon Corp.
Against a global backdrop of negative yields, South Africa’s
local-currency bonds “stand out for the still-elevated real rates
being offered,” said Phoenix Kalen, an analyst at SocGen in London.
“Over a short-time horizon, investors may be tempted into holding
South African assets for the carry.”

Charlie Robertson [Chief Economist Renaissance Capital] has
pronouncedthat South Africa [is] Heading for [a] Junk Downgrade. A
meme flying round on social media is that There is a New sex position
called the “Ramaphosa” Get on top and do nothing [@danielmarven].

Kenya

David Maraga, who angered President Uhuru Kenyatta’s government as
head of the Supreme Court in 2017 by overturning Kenyatta’s
re-election and forcing a re-vote, said some courts had stopped
working and a drive to speed up corruption cases was on hold.
“A number of critical processes in the courts and the judiciary will
be severely crippled,” he said in a televised news conference.
“Some of the incidents that we encounter are deliberate attempts to
undermine the judiciary ... I am not serving at the pleasure of a few
people in the executive who are bent on subjugating the judiciary.”
A former finance minister and hundreds of other senior officials and
business people have been charged under a high-level corruption
crackdown launched last year. None of the cases have been concluded,
however.
The judiciary was allocated 18.9 billion shillings ($183 million) for
the fiscal year starting in July, well below the judiciary’s request
for 33.3 billion.

The number of people in East Africa’s largest economy increased to
47.6 million from a revised 37.7 million, the National Bureau of
Statistics Director-General Zachary Mwangi said Monday, citing a
census report.
Females make up 50.5% of the population, he said. Kenya’s capital,
Nairobi has 4.4 million people.

This is lower than projections.