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Satchu's Rich Wrap-Up
Friday 09th of April 2021

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Anybody can be decisive during a panic It takes a strong Man to act during a Boom. VS NAIPAUL 08-FEB-2021 The Markets Are Wilding

“The businessman bought at ten and was happy to get out at twelve; the mathematician saw his ten rise to eighteen, but didn’t sell because he wanted to double his ten to twenty.”As al pacino said in scarface the world is yours "[Manny] Oh, Well What's Coming To You, Tony? [Tony] The World, Chico, And Everything In It."

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28-MAR-2021 :: The Pandemic Is a Portal [said Arundhati Roy]
World Of Finance

Since the end of December 2019, when I learnt of covid19, time I have found has become non-linear. 

It has been a paradoxical situation, physically static [for the most part] anticipating the ‘’virulent plague that travelled through the air as if on wings, it burned through cities like fire’’

But at the same time very stream of consciousness. My dreams became so vivid and real and just one portal of many,

Is it really social distancing if we are all surrounded by djinn ASKED @AAOLOMI and I thought to myself we are all djinn now.

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

I found myself immersing myself in the latin American genre of magic realism, following William Dalrymple’s twitter handle to exotic destinations

Dreaming of escape and travel and of portals trough which I would pass like I imagined there was a portal at the bottom of my garden in Mombasa through which I could pass and return.

She told him she dreamed about escaping. That was all she dreamed about. Paris, Texas (1984) dir. Wim Wenders 

Itamaraty Palace Spiral Staircase designed by #Oscar Niemeyer icekev

I return to t.s eliot

To lead you to an overwhelming question ... Oh, do not ask, “What is it?”

Let us go and make our visit.

This strange dream like sequence of non linear time has been the overwhelming experience for what feels like an eternity now.

The Virus remains an exogenous uncertainty that is still not resolved though all the virologists who have metastasized into vaccinologists will have you believe its all sunlit uplands from here.

Glorious sunrise at the Borana conservancy @nickdimbleby @JamboMagazine

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The core narrative of the Queen of Sheba and her encounter with Solomon is found in the Quran (27:20-44) @aaolomi

A hoopoe brings word of a mighty queen whose people worship the sun. Solomon sends word to the queen to come before him and receive the word of God.

The queen, showing wisdom comes to Solomon.

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The prophet deciding to demonstrate his power commands his servants to bring her magnificent throne to him @aaolomi

One of the jinn steps forward promising to bring it swiftly, but another servant, wise and learned, says he can bring the throne before Solomon in the blink of an eye

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The throne is brought before Solomon and placed before a great glass or mirrored floor. @aaolomi

When the queen arrives, she marvels at the sight of her throne and what she thinks is a pool of water. She lifts her skirt to wade into the pool, but Solomon shows her it is wondrous glass.

Impressed, the queen converts and marries Solomon.

The sketch of the narrative is then drawn out even further in commentaries. 

Jamal Elias remarks that the details of the story are found in the account of Wahb ibn Munabbih and Tha’labi’s Qisas al Anbiya both drawing on the narrations of Ibn Abbas.

The extra-Quranic accounts go even further and truly capture the imagination.

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The Queen of Sheba is known as Bilqis, she is the daughter of a Yemeni King, Al Hadhad. @aaolomi

When the king was young, he was out hunting when he came upon a family of deer. He stayed his hunting bow and for his mercy was rewarded by the king of the jinn Sakan with a jinn wife.

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He married the jinn princess known as Baltaqa or Ruwaha. Their daughter is Bilqis, making her part jinn. @aaolomi

She had many brothers and sisters, but upon her siblings’ birth, jinn in the form of dogs came and carried them off to the hidden realms. 

Upon her father’s death, Bilqis became queen and ruled wisely.

In an explanation for her encounter with Solomon, one commentator noted the jinn feared the union between the two and so spread rumors that Bilqis had donkey’s feet or hairy legs.

So King Solomon had a mighty mirror polished to look like water so when she would lift her skirt he would know the truth.

While some have interpreted the story of Bilqis as that of a wise woman submitting to the greater wisdom of King Solomon, most of the medieval Muslim writers treat Bilqis as uniquely wise in her own right. 

Her’s is not a story of submission, but of equals in union.

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Upon receiving Solomon’s summons she recognizes he may be a true prophet and so it is *she* who tests him. @aaolomi

According to ibn Munabbih, Solomon’s actions with the throne and the glass were all demonstrations to her test.

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For example, Solomon’s vizier was able to make her throne sink into the ground and reappear before Solomon through knowledge of the Secret Name of God, thus demonstrating the true wisdom of Solomon to Bilqis. @aaolomi

Even before Solomon, Tabari mentions that under her rule her kingdom flourished, that she was intelligent, virtuous, wise, and powerful.

In the kitab al tijan, likely recounting one of the older legends, she did not succeed her father, but rather the throne went to a tyrant who abused his subjects.

Making overtures to the tyrant she promised to marry him, but upon his wedding night she beheads him and mounts his vile head on the gates. 

When the kingdom sees that she liberated them from the tyrant, they all vow allegiance to her.

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After marriage to Solomon, she rules as his equal. Like him, she goes on to command the jinn. @aaolomi

At her direction the jinn Zawbah built the mighty palace of Aden and the fortresses at Sirwah and Marah.

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In another instance, in a demonstration of her equal status, Solomon sent his powerful ring to her. @aaolomi

He directed a bird-like jinn to carry it to her, but the confused creature got lost and accidently dropped the ring into the sea where it became Cumoro Island.

The Queen of Sheba is one of those fascinating figures who is referenced allusively in the Qur’an but whose story is expanded in the commentaries and reflect how older narratives were drawn into an Islamic fold.

Much of her story is drawn from Jewish sources and Yemeni legends. 

They are drawn together into an Islamic narrative which recognizes and honors the older source material while providing new thematic elements.

The Queen of Sheba also plays an important role geographically. 

She is a legendary Queen of Yemen and East Africa who becomes part of the Islamic world. 

She also can help us see the spread of Islam.

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What Do We Need To Be True? @EpsilonTheory Rusty Guinn
World Of Finance

There are these two young fish swimming along and they happen to meet an older fish swimming the other way, who nods at them and says “Morning, boys. How’s the water?” 

And the two young fish swim on for a bit, and then eventually one of them looks over at the other and goes “What the hell is water?”

David Foster Wallace, in 2005 Commencement Address to Kenyon College

There is a funny thing I’ve noticed about telling that David Foster Wallace story: I am convinced at this point that everyone who hears it imagines themselves as the older fish.

Especially investment professionals who hear the story.

Don’t get me wrong. If there is one thing more ironic than believing you are the older fish in the David Foster Wallace story, it is telling the story in the first place (since the moral of the story is that humans are all wired to be the two younger fish). 

And if there is one thing more ironic than telling the story in the first place, it is doing so and then immediately teasing others for not understanding the moral of the story. As chief among us sinners, therefore, I will tell you what I think and what I think I know.

Like Ben, I think the water is changing. I think several ‘immutable’, ‘inherent’ features of financial markets are being recognized as stories subject to revision.

I think missionaries with a vested interest in those stories are actively working to promote their preferred narrative as something the crowd believes the crowd believes. 

I think such a change in any one of five such stories is important enough alone to change the way we allocate capital, develop investment strategies, structure markets and conduct business as investment professionals.

I think these are those five stories. I know that there are certainly more that don’t occur to me because, well, that’s the nature of the water in which we swim.

We live in a deflationary world.

We live in a flat world.

We live in a world in which the Fed has your back.

We live in a world in which doing anything other than maximizing top-line growth is value–destructive.

We live in a world of easy credit, abundant leverage, inexhaustible liquidity and limited regulatory scrutiny.

Now let me tell you what I don’t know.

I don’t know how to predict how and when the old narrative will die. I don’t know how to predict when the new narrative that replaces it will be born.

Oh, I have some ideas.

But first you deserve to know why someone willing to tell you he thinks the water is changing went all soggy when it came to giving you any details about how we will know that it has changed.

I’m not expecting it. I’m observing it.

George Soros

Yeah, yeah, we use this Soros quote a lot. Why are you booing? He’s right.

Still, there are limits to how far observation can get us. It is true that if we were content with perfunctory, nearly tautological answers to how zeitgeist-defining narratives like the five I mentioned above are born and how they die, well, that would be no problem at all

They are born when enough people believe that everyone else believes in them. They die when the opposite happens

Not when enough “facts” about “reality” accumulate, except to the extent the crowd believes those are the things that will change everyone’s mind. 

And certainly not when an older fish comes along to let everyone know the “truth” about them, which never changes anyone’s mind.

On its face, however, that explanation isn’t very useful. We can just sit here agreeing with each other until we are blue in the face that it feels like COVID killed collective belief in “The World is Flat!” stone dead, but it doesn’t get us any closer to being able to measure something as abstract as ‘what the crowd believes the crowd believes’

What we call the Narrative Machine, our research effort here at Epsilon Theory, is an attempt to represent that abstract concept – something game theory calls common knowledge – through a model. 

Since we can’t measure what the crowd believes directly, we instead observe the behavior by influential individuals and institutions (e.g. politicians, executives, celebrities, core cultural institutions, Wall Street, Madison Avenue and the media). 

More specifically, we observe their missionary behavior, by which we mean linguistic evidence of attempts to shape, create and sustain those narratives.

Oceania had always been at war with Eastasia, that kind of thing.

And then we measure it.

Now, the Narrative Machine is not a model for what the crowd actually believes about some topic. 

For reasons we have written about at length previously, we don’t think that would be very useful anyway. 

Instead, ours is a model which seeks to represent what the crowd believes the crowd believes, which as we see it is a lot closer to the transmission mechanism for a market populated by real, thinking people – and the machines they code to exploit the same. 

It is based on the idea that sufficiently widespread and shared use of distinctive phrases closely related to a topic (e.g. Auto stocks), framing (e.g. “Auto stocks are really a bet for or against EVs”) or premise (e.g. “investors are bullish about Tesla’s capacity growth”) is strongly indicative of the presence of common knowledge

In other words, we believe there are important publications and people that the crowd will assume others will have heard. You don’t trade above-the-fold of the Journal, but before you sit down at your terminal, you’re pretty sure everyone you will talk to that morning has at least glanced at the headlines.

 You don’t build political strategy around the, uh, thoughtful arguments put forth on the opinion page of the Washington Post, but you damn sure operate knowing that the staffers across the hall have read it.

When we observe those publications and people telling the crowd what the crowd thinks, and when we observe other publications and people begin to use that same language to describe what the crowd thinks about a topic, framing or premise, we think those observations are generally really good models for what we would observe and measure if we could observe and measure common knowledge itself.

As it happens, we think there are good and reasonable behavioral grounds for this approach, too. Humans tend to be optimistic about their own ability to resist being told how to think and very pessimistic about the capacity for other humans to do the same. 

If a publication or celebrity begins telling us how to think, we certainly wouldn’t let that affect us, but we are more than happy to believe that it shapes the beliefs of others. 

More importantly, we think civilizations are built on foundations of memes – images, stories and connotations that have repeatedly demonstrated the ability to survive and reproduce when attached to contemporary events

Manipulation of the masses through media is Lindy, I suppose. All of which increases our confidence that measurable missionary behaviors are a reasonable model for what the crowd believes the crowd believes.

But a reasonable model isn’t a perfect one.

The biggest problem with this model presents itself when we aren’t talking about bull case narratives for Tesla or a “time to rotate to cyclicals!” narrative being pushed by some sell side house with an axe. 

That kind of thing we can observe in all of its useless, cringeworthy glory, for all the good it does us. 

The problem is the zeitgeist-defining narrative that is so fundamental to our understanding of what stocks and markets and companies and capitalism ARE that it isn’t even discussed.

After all, fish don’t swim around talking about the water.

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What Do We Need To Be True? @EpsilonTheory Rusty Guinn [continued]
World Of Finance

What I mean is that it isn’t as if moral missionaries host urgent press conferences to shout from the lectern, “Most Americans think that murder is wrong!” 

Neither does the Wall Street Journal daily voice things like, “institutional investors don’t seriously consider inflation” nor Barron’s that “everyone still believes in a Fed put” nor the CIOs of the ten largest institutional asset owners in America that “free and fair trade is still the path to collective global prosperity.”

The Narrative Machine, whether we mean Epsilon Theory’s models or the brains that you and I have tried to train to consume information more judiciously, is good at measuring missionary activity and narrative adherence

That is, we can see when efforts are being devoted toward telling us what to think. Once we spot those, we can see when people or outlets are staying very on-message or going off-script. 

Think of missionary activity and narrative adherence as the currents and temperature, if you’re not sick of nautical analogies yet.

The five stories I mentioned above, and a hundred others to which we rarely give a second thought – THOSE are the water in which we swim as investors. 

They reflect our implicit belief in collective stories that no longer require observable missionary behavior because they are already fully integrated into our institutions, laws and conventions. 

We don’t have to talk about them very much any more. We don’t need missionary nudges to believe that the crowd believes in them. 

And changing them is like trying to free a 220,000 gross tonnage container ship that has wedged itself in the silty sides of a canal.

Last tortured nautical analogy, I swear.

Because it is so hard and because it is assumed to be impossible, the implications of a true change in the water, of a shift in a zeitgeist-defining narrative, are monumental

If the common knowledge about something like inflation or globalization changes, it changes everything. 

And yet, missionaries on Wall Street telling us that it is time to consider acting on ‘active tactical and opportunistic fixed income products with a flexible mandate’ isn’t evidence of a change in common knowledge about inflation. 

Neither is table-pounding from a key politician about a ‘balanced budget’, if such a thing is even conceivable in 2021. 

Nor is a data point or two dozen data points indicative of reflation, deflation or anything else. Not even an Epsilon Theory note or two about the topic.

Which leads us to a simple, if unsatisfying truth:

A model which uses missionary behaviors as a proxy for common knowledge isn’t enough to observe what is happening to the water in which we swim, much less to reliably predict when it is changing.

There is hope.

We have a lot of data we can work with. But data isn’t information. Information is what causes someone to change their mind

And if we want to know what will cause the crowd to change its mind about the water in which it swims, I think that we also must get in the habit of asking a different question – a question that is at once a fundamental query of both information theory and game theory.

What do we need to be true?

Imagine that you are a famous and wealthy financier. Let’s say that your name is, oh I don’t know, Schlex Schreensill. 

Now let us say that you are being investigated for fraud. You’re in an interrogation room, and you know that a politician involved in facilitating your maybe-not-entirely-above-board financial scheme is in the next interrogation room over. 

He knows enough to be dangerous, and his hands are dirty, too. He might even be a bigger target.

The investigators have enough to issue you a nominal fine for “failure to supervise” or something already, and to smear the politician in the court of public opinion. 

You’re both almost certainly going to get a slap on the wrist, but then again, maybe you can convince them it was the other guy all along and skate on all charges. 

To throw either one of you in jail, however, they need one or both of you to talk. So begins a process of Good Cop / Bad Cop, of carrots offered to get you to rat out the politician and of sticks threatened if you don’t. 

And remember, he’s a politician, so of course he’s going to take any opportunity to rat you out, which the agents are very happy to remind you.

A good, old fashioned Prisoner’s Dilemma.

Now, in the classic case of this game theory problem, the equilibrium outcome – the outcome that it’s impossible to reason your way out of once you’ve really thought through what the other guy must be thinking – is that both you and the politician rat each other out. 

In the end, the cost of being made the sucker is just too high to believe the politician will be willing to risk it. Besides, a reduced sentence for cooperation is still prison, but it’s better than the alternative.

As Ben wrote about some years ago in a now-classic Epsilon Theory piece, it is both possible and useful to think about this in information theory terms as well. 

The idea of the illustration below is to represent the depth and symmetry of the equilibrium state of the game. 

It represents the amount of informational content that would be necessary to change the conditional payoffs of the game and for the “ball” to roll to a new equilibrium.

In the case of most narratives and missionary activity we track, we generally observe an information surface with pretty short walls. 

In other words, when the WSJ writes about how analysts perceived an earnings update, or when ESPN writes about how baseball fans are responding to a decision to move the All-Star Game in response to a new voting rights law in Georgia, it immediately changes common knowledge. 

The amount of information that it takes to change what the crowd believes the crowd believes is pretty small. 

If you can observe that language repeating itself and attaching itself to a widening set of topics and sources, you are observing a change in the equilibrium.

In the case of zeitgeist-defining narratives, the water in which we swim, the walls of the information surface are often insurmountably steep. 

What I mean is that it doesn’t matter how many missionaries tell you that everyone thinks that globalization should reverse or will reverse, or which person or publication said so. 

It doesn’t matter how many missionaries inform you that the 40-year bond rally is finally over and inflation is finally arriving as a risk, or which person or publication said so. Or at least, it doesn’t matter very much.

The walls which protect the equilibrium of the water in which we swim from new information are high.

And those walls are built out of the things we need to be true.

So what do we mean by the things we need to be true?

Let us start from the anecdotal and specific, and then pull back to something more general. 

Consider, first, the zeitgeist-defining narrative that “We live in a deflationary world.” 

Now consider a range of social structures or social structure-defining conventions that have been assembled around that narrative:

Those who cannot change need the status quo narrative to be true.

What do we need to be true?

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22-JUN-2020 :: Whoever Controls The Narrative Controls The World
Law & Politics

As he put it, "Men respond as powerfully to fictions as they do to realities [and] in many cases they help to create the very fictions to which they respond."

Our minds are literally besieged by these Weapons of Mass Communication (as he calls them)

And it all left me wondering Who exactly is controlling the Console?

a decade of "semiotic arousal" when everything, it seemed, was a sign, a harbinger of some future radical disjuncture or cataclysmic upheaval.

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The ‘’Zeitgeist’’ of a time is its defining spirit or its mood

The ‘’Zeitgeist’’ of a time is its defining spirit or its mood. Capturing the ‘’zeitgeist’’ of the Now is not an easy thing because we are living in a dizzyingly fluid moment.

Gladwellian level move. “The tipping point is that magic moment when an idea, trend, or social behaviour crosses a threshold, tips, and spreads like wildfire”- Malcolm Gladwell. 

The new high tech, millenial, crypto, avocado economy exhibits viral, wildfire and exponential and even non-linear characteristics not unlike Ebola.

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Brazil 3,829 #COVID19 deaths yesterday just short of record 4,195 deaths day prior. Countries with most avg COVID-19 deaths/day @jmlukens

#Brazil: 2,752

#US: 988

#India: 562

#Italy: 433

#Ukraine: 389

#Poland: 380

#Russia: 369

#Mexico: 341

#Hungary: 239

#France: 235

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08-MAR-2021 My concern is that Brazil which was the epicenter of the Virus in May 2020 is once again a Precursor and a Harbinger

And sure the numbers slid for around 6 consecutive weeks but they have bottomed out of late.
“I see a huge storm forming in Brazil.” Denise Garrett, vice president of the Sabin Vaccine Institute in Washington
The bottom line: P.1 is 2.5 times more transmissible than the wild-type B lineage. And way more transmissible than B.1.1.7. @bollemdb @obscovid19br

"The greatest shortcoming of the human race is our inability to understand the exponential function." - Professor Allen Bartlett 

Exponential growth unlike any other that we have seen. Brazil is a global threat @bollemdb

Model-based evaluation of transmissibility and reinfection for the P.1 variant of the SARS-CoV-2

The variant of concern (VOC) P.1 emerged in the Amazonas state (Brazil) and was sequenced for the first time on 6-Jan- 2021 by the Japanese National Institute of Infectious Diseases.

It contains a constellation of mutations, ten of them in the spike protein.

The P.1 variant shares mutations such as E484K, K417T, and N501Y and a deletion in the orf1b protein (del11288-11296 (3675-3677 SGF)) with other VOCs previously detected in the United Kingdom and South Africa (B.1.1.7 and the B.1.351, respectively).

Prevalence of P.1 increased sharply from 0% in November 2020 to 73% in January 2021 and in less than 2 months replaced previous lineages 

The estimated relative transmissibility of P.1 is 2.5 (95% CI: 2.3-2.8) times higher than the infection rate of the wild variant, while the reinfection probability due to the new variant is 6.4% (95% CI: 5.7 - 7.1%).

If you have a "normal" pandemic that is fading, but "variants" that [are] surging, the combined total can look like a flat, manageable situation. @spignal

COVID19 Historic Peaks Deaths a day @brodjustice

I expect P.1 Lineage to be dominant worldwide in 8-12 weeks notwithstanding the Focus on SARS-CoV-2 lineage B.1.1.7
My Thesis is based on the ultra hyperconnectedness of the c21st World.

Therefore, I would be tempering my COVID19 optimism and holding my horses which introduces interesting dynamics into the markets.

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Covid catastrophe in the making: India hits a run rate of almost 1 million cases per week. Hospitals are running out of beds and vaccine doses. @SriniSivabalan

But cinema halls are open, festival gatherings in the hundreds of thousands go on and people jostle with each other in public spaces.

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Xi has taken calculated risks. The muscular and multi-faceted nature of Chinese Power is seen in its handling of COVID19

Controlling the COVID19 Narrative, suppressing the Enquiry, parlaying the situation into one of singular advantage marks a singular moment 

and  Xi Jinping has exhibited Chinese dominance over multiple theatres from the Home Front, the International Media Domain, the ‘’Scientific’’ domain over which he has achieved complete ownership and where any dissenting view is characterized as a ‘’conspiracy theory’’

It remains a remarkable achievement.

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“Unity is iron and steel; unity is a source of strength,”
Law & Politics

“Complete reunification of the motherland is an inevitable trend..no one and no force can ever stop it!” 

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’Zoonotic’’ origin was one that was accelerated in the Laboratory.

There is also a non negligible possibility that #COVID19 was deliberately released

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There is no natural Pathway for the Evolution of COVID19.

Today only the Paid for Propagandists and Virologists and WHO will argue that there is a ''zoonotic'' origin for COVID19. 

It is remarkable that the Propaganda is still being propagated more than a year later. 

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A potential leak "requires further investigation, potentially with additional missions involving specialist experts" [Kudos] @DrTedros said @AFP @YahooNews

He added that the international team had difficulty accessing raw data during the mission to China, demanding "more timely and comprehensive data sharing" in future. 

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It is remarkable that the Propaganda is still being propagated more than a year later.

Today only the Paid for Propagandists and Virologists and WHO will argue that there is a ''zoonotic'' origin for COVID19. 

It is remarkable that the Propaganda is still being propagated more than a year later. 

There is no natural Pathway for the Evolution of COVID19.

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"Let’s say, for instance that a Florida panther rampaged through the South Bronx, injuring many people. It would be immediately reasonable to wonder: How could that possibly happen?." @R_H_Ebright

"Let’s say, for instance that a Florida panther rampaged through the South Bronx, injuring many people. It would be immediately reasonable to wonder: How could that possibly happen? Florida panthers don’t live anywhere near the Bronx and aren’t normally so ferocious."

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01-MAR-2020 :: The Origin of the #CoronaVirus #COVID19

“If they can get you asking the wrong questions, they don't have to worry about answers.”― Thomas Pynchon, Gravity's Rainbow

 “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.”

“A paranoid is someone who knows a little of what's going on.”

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.1895

Dollar Index 92.165

Japan Yen 109.44

Swiss Franc 0.9259

Pound 1.3679

Aussie 0.7594

India Rupee 74.81

South Korea Won 1120.54

Brazil Real 5.5676

Egypt Pound 15.7036

South Africa Rand 14.5879

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T.S Eliot said in The Hollow Men

Between the idea

And the reality

Between the motion

And the act

Falls the Shadow

For Thine is the Kingdom.

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Epic fatality: Morgan Stanley Downgrades Credit Suisse Rating on ‘Lingering Uncertainty’ @zerohedge
World Of Finance

MS first starts the margin call cascade that cost CS $5BN... then downgrades it for being an idiot

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Africa is currently reporting a million new infections about every 78 days @ReutersGraphics

Cameroon and Mali at peak, Ethiopia 98%, Djibouti 97% Cape Verde 95% 

Average number of new infections reported in Cameroon each day reaches new high: Now reporting more than 3,700 daily

COVID-19 infections are increasing in Ethiopia, with 2,100 new infections reported on average each day. That’s 98% of the peak — the highest daily average reported on April 7

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Ethiopia: war in Tigray threatens to end Abiy’s dream of unity @FinancialTimes

At a makeshift shelter in a school in Mekelle, capital of Ethiopia’s Tigray region, Gezae Wolderaphael, an aquiline-featured young sesame farmer, shows what he says are rifle butt and knife wounds on his face and shoulder. 

The injuries, he says, were inflicted by members of an assortment of forces who surrounded him in the western Tigrayan town of Mai Kadra last November after Abiy Ahmed, Ethiopia’s prime minister, ordered federal troops to take control of the region. 

“They put a gun in my mouth,” he adds, before stabbing him and leaving him for dead in the street. 

The aim of the deployment was to oust the Tigray People’s Liberation Front from power in the region

The government in Addis Ababa had branded the TPLF, long the dominant party in Tigray, a “criminal clique”. 

As the leading member of the four-party coalition that ran Ethiopia for almost three decades until 2018, the TPLF had played a decisive role in national politics. 

But last November, after TPLF soldiers attacked federal troops stationed in Tigray, Abiy ordered the arrest of its leadership.

November’s invasion of Tigray, which the prime minister had promised would swiftly restore law and order, has morphed into a protracted and gruesome conflict that has sparked a humanitarian crisis

It has drawn in troops from neighbouring Eritrea, whose capital Asmara was hit by TPLF rockets, and horrified an international community that in 2019 celebrated Abiy as a peacemaker worthy of the Nobel Prize.

Abiy himself conceded recently that the war had dragged on much longer than he expected. 

TPLF fighters, he said, had dispersed “like flour in the winds”. He added that the federal army was fighting a guerrilla war on at least eight separate fronts across the country.

Now, after months of news blackout, stories are surfacing of atrocities that the UN says may amount to war crimes by “multiple actors”. 

Ethiopia has moved rapidly up the international agenda, with the G7 and others calling for an immediate cessation of hostilities, humanitarian access and an independent investigation into precisely what has happened.

The violence unleashed in Tigray has cast grave doubt over the future of what had been widely regarded as an African success story. 

Since the 1980s, Ethiopia has gradually transformed its image from famine-riddled failed state to one of the fastest-developing economies in the world.

Though some observers say general and regional elections rescheduled for June could see Abiy strengthen his hand, many now question whether he has the credibility to move the country forward.

“Clearly the economic miracle is over,” says Chidi Odinkalu, senior manager for Africa with the Open Society Foundations, adding that international donors will be unable to ignore the atrocities. 

“I don’t think anybody knows where this is going. Frankly, I don’t think Abiy knows where this is going.”

After gaining rare access to Tigray, the Financial Times has seen and heard evidence of indiscriminate violence, though not all the accounts could be independently verified. 

Witnesses recounted the killing and maiming of civilians and the widespread use of rape by soldiers of both the Ethiopian and Eritrean armies.

The FT was also shown what residents said were mass graves in the village of Dengelat, 100km north of Mekelle, reviving memories of the former Yugoslavia with which Ethiopia, a fractious federation of ethnically defined regions, is sometimes compared.

In the Mekelle school, Solomon Haileselassie, another young farmer, speaks of events in Mai Kadra, where there have been allegations of massacres of people from the neighbouring region of Amhara and of Tigrayans. 

The legally autonomous Ethiopian Human Rights Commission says several hundred ethnic Amharas are believed to have died, with witnesses blaming the killings on Tigrayan security forces and militia.

But Solomon pins at least some of the blame on an Amhara militia, who he says targeted Tigrayans. 

“Kill them all. Leave nobody from age seven to 70 alive,” he heard people he identified as Amhara militia members saying. 

He says he lost 15 friends in two days of violence.

“I saw it when they cut a guy’s arms and legs and slit his throat. But they didn’t kill, they left him there. They wanted him to suffer,” he says. 

“The Amhara have always had the dream of taking western Tigray,” he adds, referring to Amhara accusations that the TPLF stole its lands as part of a redivision of territory in the early 1990s. 

If he gets a chance, he says, he will fight to help restore Tigrayan control of the territory.

The Ethiopian government cautions against believing stories such as Solomon’s. 

It has warned about “perpetrators acting as victims” in what it says is “an attempt to reverse the narrative”.

Whichever side was most responsible for the massacre in Mai Kadra, stories of similar atrocities are tragically common. Solomon is one of as many as 1m people who have been displaced. 

Michelle Bachelet, the UN human rights chief, has warned of “blanket denials and finger-pointing” amid evidence of atrocities committed by all sides, including the Ethiopian National Defence Force, the Eritrean army, the TPLF and its supporters, as well as fighters from Amhara.

Thousands of people, perhaps tens of thousands, may have died in the conflict, say senior foreign diplomats in Addis Ababa. 

More than 60,000 refugees have fled to Sudan, which could get dragged into the conflict after deadly border skirmishes. 

And some 700,000 people have escaped to eastern Tigray from the western part of the region, which is currently “occupied by Amhara militias and special forces”, according to Mulu Nega, the interim president of Tigray appointed by Addis Ababa in November.

Gizachew Abebe, a senior member of the Amhara government, has blamed the TPLF for fomenting instability around the country and for picking a fight with Amhara. “The TPLF is the one who started the fight,” he says.

Until recently, Abiy had strongly denied the involvement in Tigray of troops from Eritrea, which fought a bloody war against Ethiopia between 1998 and 2000 when the TPLF was effectively running the country. 

But in March, Abiy conceded that Eritrean troops were present, but that he had secured an agreement with Isaias Afewerki, the wily strongman who runs Eritrea, to withdraw them.

However many doubt Abiy’s capacity to insist on that. “Isaias seems to be doing what he wants with Ethiopia,” says Daniel Mulugeta, an Ethiopian research associate at Soas in London.

A senior member of the caretaker administration in Tigray admits that Eritrean troops are still occupying parts of the region. 

“Getting the Eritreans out will be a big challenge. But they’ll have to go,” he says.

For many years, Ethiopia has been a source of hope, rather than despair. 

Over the three decades since the TPLF led the overthrow of the brutal Marxist Derg regime in 1991, the country of 110m people, the second most populous in Africa, has maintained a rapid pace of investment-led growth. 

In the process, it has cut poverty, raised life expectancy and become a manufacturing hub for textile brands such as Tommy Hilfiger and Calvin Klein.

 Addis Ababa is in the midst of a perpetual building boom and Ethiopian Airlines has become the most successful carrier on the continent.

Throughout this period, the Ethiopian Peoples’ Revolutionary Democratic Front, or EPRDF, the four-party coalition of which the TPLF was the leading member, ran a paranoid police state. 

But international donors mostly overlooked the authoritarian nature of the regime as Ethiopia became the nearest thing Africa had to an Asian-style growth miracle.

“There’s no doubt that Ethiopia made tremendous gains through the development-state approach,” says Kingsley Amoako, a Ghanaian economist and former executive secretary of the UN Economic Commission for Africa in Addis Ababa.

Events in Tigray have thrown that record and Ethiopia’s prospects into doubt. That has widespread repercussions. 

As well as being a putative model for other African states, Ethiopia has been both a strategic ally to the US in the unstable Horn of Africa and a close partner of China. 

Last month, Joe Biden, the US president, dispatched a special envoy to Addis Ababa after expressing “grave concerns” over the conflict.

The war in Tigray has also cast a shadow over the capacity of Abiy, prime minister since 2018, to carry out his vaunted economic and political liberalisation. 

After he was selected as part of an EPRDF plan to draw the sting out of mass street protests in Amhara and Oromia then rocking the regime, Abiy was initially lauded as a transformative and unifying leader. 

Declaring himself a “capitalist”, he proposed to tweak the state-led development model by selling off state assets and creating a bigger space for the private sector. 

He also pledged to nudge Ethiopia towards a more open liberal democracy.

Amid huge excitement, Abiy released tens of thousands of political prisoners, freed the media and made formal peace with Eritrea. 

He set a timetable for elections, subsequently delayed because of coronavirus, and then disbanded the EPRDF, replacing it with the non-ethnic Prosperity party which the TPLF refused to join.

From his first days in office, Abiy advocated pan-Ethiopian unity. Many welcomed this as a conciliatory gesture after the perceived domination of ethno-nationalist politics under the Tigrayans.

 Abiy comes from the Oromo ethnic group, which constitutes more than one-third of Ethiopia’s population against only 6 per cent for Tigrayans. 

Yet, far from achieving reconciliation, ethnic and political tensions, suppressed under the previous regime, bubbled dangerously to the surface. In Tigray that has led to war.

The Open Society Foundations’ Odinkalu says Abiy has demonised the TPLF, blaming it for all the ills associated with the EPRDF coalition and airbrushing away its achievements. 

“He is rewriting history to suit his own narrative,” he says.

Not everyone agrees that Abiy has mismanaged the situation in Tigray. 

Gabriel Negatu, senior fellow at the Atlantic Council in Washington, sees criticism of the prime minister as misplaced and coverage of the war as exaggerated. 

Abiy, he says, is right to try to eliminate the TPLF, which he accuses of brutalising Ethiopia and undermining Abiy’s message of unity.

Not only can Abiy pull Ethiopia back from the brink, Negatu says, but victory in June’s elections could strengthen his hand. 

“This war and its aftermath, as horrible as it has been . . . has galvanised the country behind him,” he says. 

“After the election, I venture to say, you will see a new, revitalised and reinvigorated Abiy determined to take this country to the next level.”

Eyob Tolina, state minister for finance, is also firmly behind the prime minister’s actions. 

The country, whose gross domestic product grew 6.1 per cent in 2020 despite the war and pandemic, could quickly bounce back towards double-digit growth, he says. 

It could raise billions in desperately needed foreign exchange from the privatisation of telecoms licences. “With the demise of TPLF, a significant political risk has now diminished,” he adds.

One close adviser to the prime minister blames the country’s current problems on the 1995 constitution, which divided the country into nine ethnically defined regions. 

“The TPLF fostered ethnic politics and institutionalised division,” he says. “Instead of one country, they made this into a collection of different ethnic groups to divide and rule us.”

Far from unifying the country, the war against the TPLF was more likely to divide it further, says Mulugeta at Soas. 

“My suspicion is that this conflict in Tigray emboldens centrifugal forces who want to break away from the country,” he says.

Every transition in Ethiopia since the fall of Emperor Haile Selassie in 1974 has been violent, say analysts. 

Hopes that Abiy could engineer a peaceful change of guard appear to have failed. Now, as elections approach, Abiy needs to push his vision of a united country. 

“The election is consequential yet also challenging,” he told parliament last month.

But even in his own region of Oromia, many are suspicious of his pan-Ethiopian message. 

Some see it as a return to a centralised state that tramples on the rights of the Oromo and other communities that believe they have been marginalised.

Jawar Mohammed, a prominent Oromo leader, has been jailed and faces charges of “inciting ethnic and religious strife”. 

That removes one of Abiy’s strongest political opponents, but could also undermine the legitimacy of any electoral mandate the prime minister secures in June.

“We are against an Ethiopia that promotes one nation, one language, one religion,” says Kumsa Dirriba, known by his nom de guerre Jaal Marroo, leader of the Oromo Liberation Army, an armed group accused of kidnappings and bomb attacks

“We are more than 80 nations and nationalities living in this country and we want an Ethiopia that treats all these nations equally.”

The TPLF itself continues to fight in Tigray’s central-south regions, while some top leaders have evaded capture by Abiy’s federal forces. 

A senior official, speaking on condition of anonymity, conceded that the war has turned the region decisively against the central government. 

For the first time in decades, many Tigrayans are talking about outright secession, which is allowed under the current constitution. “Tigrayans today don’t want to be part of Ethiopia because of these crimes,” he says.

Kahsay Tesfay, a 66-year-old Tigrayan builder, agrees. The conflict, he says, is the worst in his lifetime, worse even than the TPLF uprising against the Derg and the Ethiopia-Eritrea war.

In February, Kahsay lost one son. He was sitting by the bed of another, 16-year-old Mikael, whose gangrenous foot was about to be amputated. 

Mikael, who still dreams of playing football, was caught up in a bomb blast in the town of Bizet, close to the border with Eritrea. 

“I was walking back home in the afternoon after delivering a message to my family,” he says of the moment before the bomb shattered his foot.

“Even children are suffering like animals,” adds his father, speaking in a hospital in Mekelle. Bed after bed was filled with the victims of war. Ethiopia, he says is “never going to be the same again”.

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@PMEthiopia has launched an unwinnable War on Tigray Province.

Ethiopia which was once the Poster child of the African Renaissance now has a Nobel Prize Winner whom I am reliably informed

PM Abiy His inner war cabinet includes Evangelicals who are counseling him he is "doing Christ's work"; that his faith is being "tested". @RAbdiAnalyst

@PMEthiopia has launched an unwinnable War on Tigray Province.

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‘The genie out of the bottle’ @AfricanBizMag

“I don’t think he’s the person who can deliver that development. I don’t think the regions want him to deliver or have the faith in him to deliver it,” says Aly Khan Satchu

With ‘the genie out of the bottle’, Abiy is fast losing ground ahead of the poll, says Satchu. 

“Everybody else is going to start wanting more freedom within the constitution. It’s impossible for the state to manage a guerrilla war up there and at the same time manage to control the rest of the country. If he put more resources into Tigray he’s going to lose more control of the other regions.

“There’s no hope for him. If he has a fair election he will lose full stoP''

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The Daily nation [@NationAfrica] today has an excellent infographic on how Kenya got to Kshs. 7.2 trillion in debt over the years. @MwangoCapital
Kenyan Economy

~ 5.4T has been borrowed since President Uhuru took over in 2013 (on average ~59B per month).  The debt has grown 4X since.

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NPL ratio more than doubling is quite a worrying trend. Industry ROA has halved, while ROE has come off by 1,000 bps. @MihrThakar
Kenyan Economy


That recovery had better come as quick as the @IMFNews is predicting in its bright eyed and bushy tailed prediction

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The results of the 18-Year Infrastructure Bond dated 12th April 2021. Bids received: Kshs. 88.6B Government uptake: Kshs 81.9B Coupon rate: 12.67% Tax Free @MwangoCapital
Kenyan Economy

Targeted amount: Kshs. 60B

Bids received: Kshs. 88.6B (47% oversubscribed)

Government uptake: Kshs 81.9B

Coupon rate: 12.67%

The returns are tax free btw. 

This was the 3rd IFB of the 2020/21 fiscal year.

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by Aly Khan Satchu (www.rich.co.ke)
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April 2021

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