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Thursday 22nd of September 2022
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14-FEB-2022 :: The End of the World is a Concept Without a Future Law & Politics |
14-FEB-2022 :: The End of the World is a Concept Without a Future
The World in the c21st century exhibits viral, wildfire and exponential characteristics and feedback loops
September 1, 1939 by W. H. Auden comes to mind
Waves of anger and fear
Circulate over the bright
And darkened lands of the earth, Obsessing our private lives;
The unmentionable odour of death
Into this neutral air
Where blind skyscrapers use Their full height to proclaim
The strength of Collective Man,
Each language pours its vain Competitive excuse:
But who can live for long
In an euphoric dream;
Out of the mirror they stare,
Faces along the bar
Cling to their average day:
The lights must never go out,
The music must always play,
Just as Auden was describing a World teetering on the edge of World War 11, the narrative coming from the likes of Secretary Blinken and his President appear to be signalling a similar moment.
Ultimately, this is about Hard Power, its about a President Putin who has waited close to three decades for precisely this moment to try expunge the humiliation of the 1990s.
Putin is seeking to stop NATO dead in its tracks, create a sphere of influence and is seizing this moment in the context of a now extinct ''Unipolar'' World and a freshly minted Tripolar World.
It is clear the Russian abrasiveness is in part informed by a fundamentally better understanding of realpolitik and its chagrin that The US might still be reliving its glory days of the 1990s.
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Putin Announces ‘Partial Mobilization,’ Stepping Up Ukraine War @bpolitics Law & Politics |
Putin Announces ‘Partial Mobilization,’ Stepping Up Ukraine War @bpolitics
Vowing to use all means necessary to defend Russia in its invasion of Ukraine, President Vladimir Putin announced a “partial mobilization” and pledged to annex the territories his forces have already occupied, raising the stakes in the seven-month-old conflict.
Calling the moves “urgent, necessary steps to defend the sovereignty, security and territorial integrity of Russia,”
Putin said in a televised national address Wednesday that Russia is fighting the full might of the North Atlantic Treaty Organization. The US and its allies, he said, are seeking to “destroy” Russia.
“We will definitely use all means available” to defend Russian territory,” Putin said. “That’s not a bluff.”
The partial mobilization will mean that reservists will be drafted into military service, Putin said, starting immediately.
The Kremlin is set to stage hastily-organized referendums on absorbing four occupied regions in eastern and southern Ukraine as soon as this weekend in its latest escalation of the invasion of the neighboring country.
Russian officials have said they will move quickly to annex the territories after the vote, making the lands part of the country.
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The Fed: @jeannasmialek World Of Finance |
*Raises rates by three-quarters of a point to 3-3.25%
*Projects 4.4% rates at the end of 2022, suggesting a 75 and a 50
*Rates climb to 4.6% next year (up from 3.8%)
*Sees unemployment rising to 4.4% next year
This is a central bank in full inflation-fighting mode.
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Mellon advised him to “liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate. Purge the rottenness out of the system'' World Of Finance |
Mellon advised him to “liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate. Purge the rottenness out of the system''
Mellon doctrine Territory. Mellon believed that economic recessions, such as those that had occurred in 1873 and 1907, were a necessary part of the business cycle because they purged the economy.
In his memoirs, Hoover wrote that Mellon advised him to “liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate. Purge the rottenness out of the system. High costs of living and high living will come down. ... enterprising people will pick up the wrecks from less competent people.”
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As rates rise & debt servicing costs increase, “many zombie institutions, zombie households, corporates, banks, shadow banks and zombie countries are going to die,” @Nouriel said. “So we’ll see who’s swimming naked.” @markets World Of Finance |
He expects a 75 basis points rate hike at the current meeting and 50 basis points in both November and December. That would lead the Fed funds rate by year’s end to be between 4% and 4.25%.
However persistent inflation, especially in wages and the service sector, will mean the Fed will “probably have no choice” but to hike more, he said, with funds rates going toward 5%
Once the world is in recession, Roubini doesn’t expect fiscal stimulus remedies as governments with too much debt are “running out of fiscal bullets.” High inflation would also mean that “if you do fiscal stimulus, you’re overheating the aggregate demand.”
As a result, Roubini sees a stagflation like in the 1970s and massive debt distress as in the global financial crisis.
“It’s not going to be a short and shallow recession, it’s going to be severe, long and ugly,” he said.
Roubini expects the US and global recession to last all of 2023, depending on how severe the supply shocks and financial distress will be.
During the 2008 crisis, households and banks took the hardest hits. This time around, he said corporations, and shadow banks, such as hedge funds, private equity and credit funds, “are going to implode”
In Roubini’s new book, “Megathreats,” he identifies 11 medium-term negative supply shocks that reduce potential growth by increasing the cost of production.
Those include deglobalization and protectionism, relocating of manufacturing from China and Asia to Europe and the US, aging of population in advanced economies and emerging markets, migration restrictions, decoupling between the US and China, global climate change and recurring pandemics.
“It’s only a matter of time until we’re going to get the next nasty pandemic,” he said.
His advice for investors: “You have to be light on equities and have more cash.” Though cash is eroded by inflation, its nominal value stays at zero, “while equities and other assets can fall by 10%, 20%, 30%.”
In fixed income, he recommends staying away from long duration bonds and adding inflation protection from short-term treasuries or inflation index bonds like TIPS.
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’Voodoo Economics’’ a Wizard of Oz moment World Of Finance |
’Voodoo Economics’’ a Wizard of Oz moment
we have reached the point when the curtain was lifted in the Wizard of Oz and the Wizard revealed to be ‘’an ordinary conman from Omaha who has been using elaborate magic tricks and props to make himself seem “great and powerful”’’
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Currency Markets at a Glance WSJ World Currencies |
Currency Markets at a Glance WSJ
Euro 0.983300
Dollar Index 111.24
Japan Yen 1.4490
Swiss Franc 0.965520
Pound 1.124780
Aussie 0.660825
India Rupee 80.5795
South Korea Won 1408.24
Brazil Real 5.1718000
Egypt Pound 19.472419
South Africa Rand 17.74510 |
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Higher interest costs push UK public borrowing to twice expected level @FT World Of Finance |
Higher interest costs push UK public borrowing to twice expected level @FT
Britain’s public finances have given new chancellor Kwasi Kwarteng a difficult backdrop for his mini Budget on Friday, with government borrowing rising to twice the level the independent fiscal watchdog had expected for August.
The figures and overnight indications from Prime Minister Liz Truss’s government that it wants to cut taxes further than expected this week raised fears that the package would prove unsustainable and require significantly higher interest rates.
Markets are concerned that a borrow and spend package when unemployment is at a 50-year low and inflationary pressure is already high will leave the UK living beyond its means and require the Bank of England to slam on the brakes.
The prospect of even higher interest rates did not bolster sterling against a very strong US dollar in early trading on Wednesday, with the pound slipping to another 37-year low of $1.132.
In August, the public sector borrowed £11.8bn, higher than City forecasts of £8.8bn and almost twice the amount estimated by the Office for Budget Responsibility earlier in the year.
The fiscal watchdog thought the figure would be only £6bn.
With the chancellor set to unveil the costs of the government’s energy support package on Friday, financed by additional borrowing and large permanent tax cuts, the level of borrowing is expected to rise sharply above these estimates later in the year.
Kwarteng was unapologetic about the government’s new strategy. In a statement he said that strong growth and sustainable public finances went hand in hand.
“As chancellor, I have pledged to get debt down in the medium term. However, in the face of a major economic shock, it is absolutely right that the government takes action now to help families and businesses, just as we did during the pandemic,” he said.
Jens Larsen, a director at Eurasia Group, the consultancy, said that the government’s new strategy was likely to result in a decline in the popularity of UK assets in financial markets.
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Jul 3 One can create inorganic cascade like price moves in the derivatives market and thereby control the physical commodity. Commodities |
Jul 3 One can create inorganic cascade like price moves in the derivatives market and thereby control the physical commodity.
Western markets are turbo finiancialized and for an eternity, Western banks and Central Banks have been able to distort the commodity price complex with little difficulty.
Take the Gold market for example where derivatives are 100x the underlying.
One can create inorganic cascade like price moves in the derivatives market and thereby control the physical commodity.
There are plenty of examples of these inorganic price moves. In essence, the Tail wags the dog.
The challenge is where the Supply/Demand balance is precarious and a small adjustment [reduce Supply or increase Demand] tips the situation into disequilibrium.
The Tail will no longer wag the Dog and the Dog will simply run amok.
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“We’re living by the law of the jungle." @timourazhari Frontier Markets |
“We’re living by the law of the jungle." @timourazhari
As we left the Bekaa, we passed by a convenience store owned by Abdallah Saii, an acquaintance of Sali who held up a bank in January for $50k of his savings in one of the first such incidents.
He said more such acts would come.
“We’re living by the law of the jungle."
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Black Market Currency Trade Thrives In Ethiopia as Economy Tanks @markets Africa |
Black Market Currency Trade Thrives In Ethiopia as Economy Tanks @markets
The gap between the Ethiopian currency’s official and parallel-market exchange rates widened to a record as foreign reserves dwindled and fighting in the country’s north resumed.
On Wednesday, the birr traded as high as 92 a dollar on the black market, while the official rate remained at 52.5, according to people familiar with the matter who asked not to be identified speaking about the parallel market.
The exchange-rate gap is widening mainly due to heightened risk surrounding the ongoing conflict in the country, Fikadu Digafe, vice governor and chief economist at the central bank, said in a phone interview.
He declined to directly comment about the unofficial exchange rate.
The imbalance between foreign-currency supply and demand is problem, he said, adding that government monetary policies are less effective due to the high cost of the near two-year war with the dissident northern Tigray region.
A truce agreed to in March ended in August, worsening the humanitarian and economic situation in Africa’s second-most populous country.
The International Monetary Fund in June said Ethiopia’s economic growth may slow to 3.8% in 2021-22, because of the conflict, lower agricultural production, a fall in donor financing and intensifying foreign exchange shortages, drought, and spillovers from the war in Ukraine.
Ethiopia’s foreign-exchange reserves stood at $3.3 billion at the end of 2021, covering just 1.9 months of the country’s import costs, according to an East Africa Macroeconomic Outlook published by Deloitte LLP.
Meanwhile, inflation soared to 32.5% in August.
Loans from Ethiopia’s lenders were about $1.09 billion in the fiscal year through July, compared with $3.33 billion in 2019-20.
To shore up foreign reserves, the government has been trimming the value of the birr against the dollar since 2019.
Between February and May, Ethiopia’s central bank depreciated the local currency by a weighted average rate of 26%.
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“Fast-forward seven years and the Buhari administration has delivered a crash course on how to bankrupt a country.” @StearsBusiness Africa |
“Fast-forward seven years and the Buhari administration has delivered a crash course on how to bankrupt a country.” @StearsBusiness
Many Nigerians will remember him as the president that killed the naira, a well-earned reputation considering the currency has lost more than half of its value during his tenure.
But President Buhari also holds the dubious honour of being the only Nigerian Head of State to lead the country into two separate recessions (2016 & 2020) since official records began in 1983.
And how can we ignore Nigeria’s unemployment? An administration that promised to create 15 million jobs in its 2017 Economic Recovery & Growth Plan now presides over a country with a 33% unemployment rate, where just one in three young people are in a full-time job.
When President Buhari settled into his new role at the end of 2015, Nigeria was at a fiscal crossroads as the global oil price crash forced policymakers to rethink their approach to managing the country’s finances.
The government even passed a supplementary budget mid-way through 2015 just to tide things over.
Nigeria’s accounts did not look good. We were committing nearly 40% of annual spending to government salaries and pensions, leaving just 13% of 2015 spending for capital expenditure (capex).
Furthermore, the budget deficit had grown to 1.6% of GDP, up from 0.6% just two years prior, and Nigeria was spending more and more to service its debt—38% of government revenues went to debt servicing in 2015, compared to 14% in 2010.
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9 DEC 19 :: Time to Big Up the Dosage of Quaaludes Africa |
9 DEC 19 :: Time to Big Up the Dosage of Quaaludes
we were all popping Quaaludes [Quaaludes ‘’to promote relaxation, sleepiness and sometimes a feeling of euphoria. It causes a drop in blood pressure and slows the pulse rate. These properties are the reason why it was initially thought to be a useful sedative and anxiolytic It became a recreational drug due to its euphoric effect’’].
Everyone knows how this story ends. When the music stops, everyone will dash for the Exit and the currency will collapse
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Default 'a real possibility' for Ghana, @FitchRatings senior director says @Reuters Africa |
Default 'a real possibility' for Ghana, @FitchRatings senior director says @Reuters
Sovereign debt default is "a real possibility" for Ghana, and any kind of domestic debt restructuring could severely threaten the local banking sector, a senior director from the ratings agency Fitch said on Wednesday.
The West African country turned to the International Monetary Fund for help in July as its balance-of-payments position deteriorated and hundreds of people took to the streets to protest against economic hardship.
The gold- and cocoa-producing nation's government has been struggling to slow galloping inflation, reduce the public debt and revalue the local currency.
"Default is a real possibility," Fitch Senior Director Mahin Dissanayake said during a press briefing.
"Ghanaian banks...hold large volumes of government securities, so debt distress is going to put a lot of stress on the banks," he said. "The operating environment is looking very fragile."
Ghana's debt stock has more than doubled since 2015, steadily climbing from 54.2% of GDP that year to 76.6% at the end of 2021, according to government data.
Interest payments have been the government's largest annual expense since 2019, and were its second-largest expense for five straight years prior to that, finance ministry figures show. Domestic debt accounts for more than 80% of that.
Dissanayake said that reports that Ghana is planning to restructure that local currency debt as part of an IMF deal were "highly unusual", and that going through with such a plan would likely cause significant problems for local banks.
"We estimate that if there was a 30% haircut, that would make at least several banks insolvent," he said.
"It's not just the banking sector that would be affected but also insurance companies, pension funds, asset managers - anyone who holds government securities," he added.
Ghana's sovereign dollar-denominated bonds dropped as much as 1.6 cents in the dollar on Wednesday with debt maturing in 2025 and 2026 suffering the biggest declines,
Tradeweb data showed. However, much of the losses occurred in early trading, with investors ditching riskier assets in favour of safe havens amid rising tensions between the West and Russia.
Many of Ghana's international bonds are trading at record lows with the longer-dated maturities changing hands for less than 40 cents. ,
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