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Satchu's Rich Wrap-Up
 
 
Wednesday 25th of March 2020
 
Afternoon,
Africa

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Macro Thoughts

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The Global Economy is coming to a sudden Stop. #COVID19
Africa


We are moving from a World of Hyper Connectedness to a World of
Quarantine. A complete Quarantine is the only way to vaccine this
c21st World of ours

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CORRECTION: Highest basis since Sept 18 2008! FWIW - This is what happened back then @iv_technicals
Africa


CORRECTION: Highest basis since Sept 18 2008!FWIW - This is what
happened back then

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Massive spreading in the gold market this morning. I just talked to @Ole_S_Hansen and he said it is caused by a massive disruption in the supply chain @neils_C
Africa


Companies literally can't get their gold to where it needs to go and
that is causing the physical market to dry up

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Comex #gold premium to OTC gold has climbed sharply as this chart from Bloomberg shows. @JReade_WGC
Africa


On 23/03 at 6am the EFP stood at about $6/oz. A day later, this has
blown out ot more than $20/oz.
Due to shortages of investment gold and difficulties in shipping metal around.

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24-FEB-2020 :: The Viral Moment has Arrived #COVID19
Africa


At this point I would venture Gold is correlated to the #Coronavirus
which is set to turn parabolic and is already non linear and
exponential ~

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Sandhof lilies bloom for the first time in 3 years
Africa


Good rains in Namibia have led to a spectacular bloom of lilies on
the Sandhof Farm, about 40km outside the town of Maltahohe in southern
Namibia.
The funnel-shaped flowers (Crinum Paludosum) commonly known as
bushveld vlei lilies bloom in marshy areas and only last for six or
seven days before they change colour from pink to white, and then
wither.

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@BillGates says we can't restart the economy soon and simply "ignore that pile of bodies over in the corner" @Recode
Africa


“There really is no middle ground, and it’s very tough to say to
people, ‘Hey, keep going to restaurants, go buy new houses, ignore
that pile of bodies over in the corner. We want you to keep spending
because there’s maybe a politician who thinks GDP growth is all that
counts,’” Gates said in an interview with TED Tuesday.
“It’s very irresponsible for somebody to suggest that we can have the
best of both worlds.”

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Del Rey's California which is the California of our collective unconsciousness, a dream song
Africa


Del Rey’s California—which is the California of our collective
unconsciousness, a dream song—is preoccupied with glamour and love and
fame and anguish and loneliness and hunger.
Even her taken name conjures a golden terrain. “Lana” was inspired by
Lana Turner, a titan of red-lip, Old Hollywood glamour; “Del Rey,”
which translates from Spanish as “of the King,” is a neighborhood on
the west side of Los Angeles.
“Baby, if you wanna leave, come to California, be a freak like me, too.”
California is, of course, where a person goes to change. The state is
a haven in which to unfurl whatever latent identity has been lurking
in your bones. Those impulses are reflected in—perhaps dictated by—the
geography: the San Andreas Fault, the eight-hundred-and-ten-mile
boundary between two tectonic plates, requires the landscape to
periodically rethink itself, reconfigure. Then there’s the ocean,
slapping against the cliffs of Big Sur, rolling gently toward Santa
Monica—as if to say, loudly, convincingly, “Last stop! Now or never!”
in his essay “Fifteen Takes on California,” the critic David L. Ulin
writes of “our sense of this place as final landscape, last territory
on the continent, where we face ourselves because there is nowhere to
turn.”
Del Rey can be a deft lyricist, gasping bruising little lines, like “I
lost myself when I lost you,” or “Ain’t it strange that you’re not
here with me?”

Conclusions

My Daughters are embarrassed that I like Lana Del Rey. They think its
inappropriate.

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We are going to fight every way we can to save every life that we can. @NYGovCuomo
Law & Politics


That’s what it means to be an American and that’s what it means to be
a New Yorker.

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"We believe the true numbers (of COVID-19-related deaths) are hidden," said Francesco Alleva, spokesman for Bergamo's mayor.
Law & Politics


“Because many people are dying at home or in structures for the
elderly, and they have never been tested for the virus.”
In the epidemic’s fourth week, Lorini estimates that the true number
of infected in the area is 5 to 10 times the official figure of 4,645.
The current regimen allows testing only of people who show up at a
screening area at the hospital with severe symptoms, missing people
who are sick at home.

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The global COVID-19 recession: @RobinBrooksIIF
International Trade


1. Unlike 2019, this is about complete collapse in services (red).
2. US lags Europe, which in turn lags China. Worse is to come.
3. Big GDP contractions in Q2 are now a matter of record.
4. Open question is if we can bounce back in Q3 & Q4!

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COVID-19 caused the largest collapse in business activity ever recorded in the eurozone, according to our data. @IHSMarkitPMI
International Trade


The Composite Output PMI fell to 31.4, falling over 20 points and
signalling a quarterly contraction of approximately -2%.

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Currency Markets at a Glance WSJ
World Currencies


Euro 1.0820
Dollar Index 101.511
Japan Yen 111.33
Swiss Franc 0.9806
Pound 1.1831
Aussie 0.6035
India Rupee 76.25
South Korea Won 1229.06
Brazil Real 5.099
Egypt Pound 15.7455
South Africa Rand 17.4611

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Crude Oil 6 Month Chart INO 25.35
Commodities


Emerging Markets

Frontier Markets

Sub Saharan Africa

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Coronavirus: "We've gone from looming threat to looming disaster" interview with the @AfricaCDC Director @JNkengasong #COVID-19 @TheAfricaReport
Africa


John Nkengasong, the director of the Africa Centres for Disease
Control and Prevention (Africa CDC), part of the African Union, is
leading the continental response to the Covid-19 pandemic.
The exponential spread of the disease, the number of deaths, and how
much money these countries that are extremely developed are injecting
in their economies.
We don’t have – not remotely – those kinds of resources. I am
extremely concerned with what could happen in Africa.
We have to see this pandemic as an economic disaster, a security
disaster and a humanitarian disaster – and they’re all interrelated.
I don’t know on what basis he has made those assumptions, but we are
dealing with a virus for which we have no pre-existing immunity on the
continent, and we are also faced with a lot of comorbidity.
We don’t know how a widespread infection of Covid-19 will interact
with tuberculosis, malaria and HIV. We just don’t know.

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02-MAR-2020 :: The #COVID19 and SSA
Africa


The First Issue is whether The #CoronaVirus will infect the Continent.
We Know that the #Coronavirus is exponential, non linear and
multiplicative.what exponential disease propagation looks like in the
real world.
Real world exponential growth looks like nothing, nothing, nothing ...
then cluster, cluster, cluster ... then BOOM!

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This is how patients going to Wilkins hospital are being picked. Ambulances don't even have stretchers,There is no water at Wilkins, folks using buckets @daddyhope
Africa


This is how patients going to Wilkins hospital are being picked.
Ambulances don’t even have stretchers, but  @MthuliNcube and Mnangagwa
are happy to allocate US$16 million to buying luxury cars for
ministers who already had cars! There is no water at Wilkins, folks
using buckets

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South African confirmed Covid-19 cases have risen to 709 from 554, Zweli Mkhize, the health minister, said. @jsphctrl
Africa


He has been bracing South Africans for a large rise in cases. (“Don't
be shocked when you see the numbers increasing,” he said yesterday.)

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Nigeria Naira Remains Under Strain After Devaluation @markets
Africa


Nigeria will probably need to weaken the naira further following its
devaluation last week, while the pressure the currency’s under will
restrict how much the central bank can cut interest rates on Tuesday,
according to analysts.
The Monetary Policy Committee of Africa’s oil producer is meeting
following Governor Godwin Emefiele’s decision to depreciate the
exchange rate used by foreign bond and stock investors, which had been
largely pegged since 2017, about 4% to 380 per dollar.
Other major oil currencies have fallen much more this month following
the plunge in Brent crude prices to less than $30 a barrel. Russia’s
ruble is down by 15% and Colombia’s peso by 14%.
The derivative and black markets suggest the naira is still under
plenty of strain.
The price of three-month non-deliverable forward contracts has surged
to 421 naira per dollar, signaling traders see another 10% devaluation
in that period.
One-year NDFs rose above 500 for the first time on Monday.
The black-market rate has weakened to 403 from 380 this week,
according to abokifx.com, a Lagos-based website.
“While it’s commendable that they’ve weakened the currency, it falls
short of our fair value estimate of 410,” Yvonne Mhango, a sub-Saharan
Africa economist at Renaissance Capital in Johannesburg, said.
“It would be positive if the central bank were to also introduce a
flexible foreign exchange rate, and move away from near peg.”
The Abuja-based central bank will likely lower its key rate by 50
basis points to 13%, according to a Bloomberg survey of analysts.
That may help the economy, which will be hit by lower crude prices and
the spread of the coronavirus, with the government suspending
international flights and closing land borders on Monday.
But it would still leave Nigeria with one of the highest base rates globally.
Oil accounts for about half of government revenue and 90% of exports.
Foreign reserves have decreased 20% since July to $35.9 billion.
Nigeria started offering crude at an unusually low discount from next
month in an effort to undercut its rivals.
“Further devaluation is likely, considering oil-exporter peer
devaluation and an overvalued starting point,” Hasnain Malik,
Dubai-based head of strategy at Tellimer, said on Sunday.
Nigeria has long kept a tight grip on the naira and back in 2014-16 --
when, like this month, oil prices crashed -- its refusal to let it
drop caused dire shortages of foreign currency that hammered the
economy.
As well as weakening the investor rate on Friday, Emefiele also
devalued the naira’s official rate -- which is mostly inaccessible
except to government departments and importers of goods such as fuel
-- to 360 from 306 per dollar.
The partial convergence of the various naira rates will ease pressures
on Nigeria’s balance of payments and budget, Chapel Hill Denham
analysts including Tajudeen Ibrahim and Omotola Abimbola, both based
in Lagos, wrote in a research note. But “a more significant
devaluation may be required,” they said.
Nigeria could tighten capital controls to support the naira, though it
will be forced into another devaluation by the third quarter,
according to Alexandre Raymakers, an Africa analyst at Verisk
Maplecroft, a U.K.-based risk consultancy.
Standard Bank Group Ltd. economists Phumelele Mbiyo and Gbolahan
Taiwo, based in Johannesburg, said Monday they expect the naira to
trade between 385 and 390 by the end of the year.
But there’s a “significant” chance it’ll depreciate more than that
because of oil prices and the coronavirus, they said. A central bank
spokesperson didn’t immediately respond to a request for comment.
A weaker naira would boost government revenues by allowing dollar
earnings from oil to be converted at a higher rate. In contrast, it
would increase the Nigeria’s foreign debts in local-currency terms.

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Kenya Seeks More Than $1 Billion From @IMFNews @WorldBank Amid Virus @markets
Africa


Kenya is in talks with the World Bank for budget support of $750
million and the International Monetary Fund for $350 million in
emergency assistance, according to the central bank.
The East African nation also expects to receive $50 million from the
World Bank to support its efforts against the brunt of the coronavirus
pandemic, Governor Patrick Njoroge said in a briefing held a day after
policymakers cut the benchmark interest rate by 1 percentage point.
Kenya and the IMF talks for a standby credit facility are still going
on, he said.
“We expect new flows related to the crisis,” he said.
Kenya has 16 confirmed cases of the coronavirus.

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by Aly Khan Satchu (www.rich.co.ke)
 
 
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March 2020
 
 
 
 
 
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