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Satchu's Rich Wrap-Up
Friday 04th of March 2022

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A Wizard of Oz moment
World Of Finance

The last time inflation was here, February 1982 - the Fed Funds Rate was 15%. @Convertbond
Dartmouth economist and former Fed adviser Andrew Levin says the Fed needs to get rates to a neutral setting within a year or so, and that the means getting the Fed Funds rates up to 4% or 5%
Its a Wizard of Oz moment 
This is ‘’Voodoo Economics’’ and 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”’’ 

The Curtain has been lifted and Mr. Powell has now arrived at his Volcker moment 
Friday's action and next immediate sessions might afford us the greatest macro trading opportunity to reset shorts in the US 10 and Ultra Bond. 

We can look across all G7 Bonds because this is a Super Bubble that is going to burst big. There is no way out now.
There is no training – classroom or otherwise.. that can prepare for trading the last third of a move, whether it's the end of a bull market or the end of a bear market. 
There's typically no logic to it; irrationality reigns supreme, and no class can teach what to do during that brief, volatile reign. Paul Tudor-Jones
Its the End of the Bull market obviously. 
The Music has been playing for Eternity and its about to stop

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,

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Why John Mearsheimer Blames the U.S. for the Crisis in Ukraine @NewYorker
Law & Politics

The political scientist John Mearsheimer has been one of the most famous critics of American foreign policy since the end of the Cold War. Perhaps best known for the book he wrote with Stephen Walt, “The Israel Lobby and U.S. Foreign Policy,” Mearsheimer is a proponent of great-power politics—a school of realist international relations that assumes that, in a self-interested attempt to preserve national security, states will preëmptively act in anticipation of adversaries. For years, Mearsheimer has argued that the U.S., in pushing to expand nato eastward and establishing friendly relations with Ukraine, has increased the likelihood of war between nuclear-armed powers and laid the groundwork for Vladimir Putin’s aggressive position toward Ukraine.Indeed, in 2014, after Russia annexed Crimea, Mearsheimer wrote that “the United States and its European allies share most of the responsibility for this crisis.”

The current invasion of Ukraine has renewed several long-standing debates about the relationship between the U.S. and Russia. Although many critics of Putin have argued that he would pursue an aggressive foreign policy in former Soviet Republics regardless of Western involvement, Mearsheimer maintains his position that the U.S. is at fault for provoking him. I recently spoke with Mearsheimer by phone. During our conversation, which has been edited for length and clarity, we discussed whether the current war could have been prevented, whether it makes sense to think of Russia as an imperial power, and Putin’s ultimate plans for Ukraine.

Looking at the situation now with Russia and Ukraine, how do you think the world got here?

I think all the trouble in this case really started in April, 2008, at the nato Summit in Bucharest, where afterward nato issued a statement that said Ukraine and Georgia would become part of nato. The Russians made it unequivocally clear at the time that they viewed this as an existential threat, and they drew a line in the sandNevertheless, what has happened with the passage of time is that we have moved forward to include Ukraine in the West to make Ukraine a Western bulwark on Russia’s border. Of course, this includes more than just nato expansion. nato expansion is the heart of the strategy, but it includes E.U. expansion as well, and it includes turning Ukraine into a pro-American liberal democracy, and, from a Russian perspective, this is an existential threat.

You said that it’s about “turning Ukraine into a pro-American liberal democracy.” I don’t put much trust or much faith in America “turning” places into liberal democracies. What if Ukraine, the people of Ukraine, want to live in a pro-American liberal democracy?

If Ukraine becomes a pro-American liberal democracy, and a member of nato, and a member of the E.U., the Russians will consider that categorically unacceptable. If there were no nato expansion and no E.U. expansion, and Ukraine just became a liberal democracy and was friendly with the United States and the West more generally, it could probably get away with that. You want to understand that there is a three-prong strategy at play here: E.U. expansion, nato expansion, and turning Ukraine into a pro-American liberal democracy.

You keep saying “turning Ukraine into a liberal democracy,” and it seems like that’s an issue for the Ukrainians to decide. nato can decide whom it admits, but we saw in 2014 that it appeared as if many Ukrainians wanted to be considered part of Europe. It would seem like almost some sort of imperialism to tell them that they can’t be a liberal democracy.

It’s not imperialism; this is great-power politics. When you’re a country like Ukraine and you live next door to a great power like Russia, you have to pay careful attention to what the Russians think, because if you take a stick and you poke them in the eye, they’re going to retaliate. States in the Western hemisphere understand this full well with regard to the United States.

The Monroe Doctrine, essentially.

Of course. There’s no country in the Western hemisphere that we will allow to invite a distant, great power to bring military forces into that country.

Right, but saying that America will not allow countries in the Western hemisphere, most of them democracies, to decide what kind of foreign policy they have—you can say that’s good or bad, but that is imperialism, right? We’re essentially saying that we have some sort of say over how democratic countries run their business.

We do have that say, and, in fact, we overthrew democratically elected leaders in the Western hemisphere during the Cold War because we were unhappy with their policies. This is the way great powers behave.

Of course we did, but I’m wondering if we should be behaving that way. When we’re thinking about foreign policies, should we be thinking about trying to create a world where neither the U.S. nor Russia is behaving that way?

That’s not the way the world works. When you try to create a world that looks like that, you end up with the disastrous policies that the United States pursued during the unipolar moment. We went around the world trying to create liberal democracies. Our main focus, of course, was in the greater Middle East, and you know how well that worked out. Not very well.

I think it would be difficult to say that America’s policy in the Middle East in the past seventy-five years since the end of the Second World War, or in the past thirty years since the end of the Cold War, has been to create liberal democracies in the Middle East.

I think that’s what the Bush Doctrine was about during the unipolar moment.

In Iraq. But not in the Palestinian territories, or Saudi Arabia, or Egypt, or anywhere else, right?

No—well, not in Saudi Arabia and not in Egypt. To start with, the Bush Doctrine basically said that if we could create a liberal democracy in Iraq, it would have a domino effect, and countries such as Syria, Iran, and eventually Saudi Arabia and Egypt would turn into democracies. That was the basic philosophy behind the Bush Doctrine. The Bush Doctrine was not just designed to turn Iraq into a democracy. We had a much grander scheme in mind.

We can debate how much the people who were in charge in the Bush Administration really wanted to turn the Middle East into a bunch of democracies, and really thought that was going to happen. My sense was that there was not a lot of actual enthusiasm about turning Saudi Arabia into a democracy.

Well, I think focussing on Saudi Arabia is taking the easy case from your perspective. That was the most difficult case from America’s perspective, because Saudi Arabia has so much leverage over us because of oil, and it’s certainly not a democracy. But the Bush Doctrine, if you go look at what we said at the time, was predicated on the belief that we could democratize the greater Middle East. It might not happen overnight, but it would eventually happen.

I guess my point would be actions speak louder than words, and, whatever Bush’s flowery speeches said, I don’t feel like the policy of the United States at any point in its recent history has been to try and insure liberal democracies around the world.

There’s a big difference between how the United States behaved during the unipolar moment and how it’s behaved in the course of its history. I agree with you when you talk about American foreign policy in the course of its broader history, but the unipolar moment was a very special time. I believe that during the unipolar moment, we were deeply committed to spreading democracy.

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Why John Mearsheimer Blames the U.S. for the Crisis in Ukraine @NewYorker [continued]
Law & Politics

With Ukraine, it’s very important to understand that, up until 2014, we did not envision nato expansion and E.U. expansion as a policy that was aimed at containing RussiaNobody seriously thought that Russia was a threat before February 22, 2014. nato expansion, E.U. expansion, and turning Ukraine and Georgia and other countries into liberal democracies were all about creating a giant zone of peace that spread all over Europe and included Eastern Europe and Western Europe. It was not aimed at containing Russia. What happened is that this major crisis broke out, and we had to assign blame, and of course we were never going to blame ourselves. We were going to blame the Russians. So we invented this story that Russia was bent on aggression in Eastern Europe. Putin is interested in creating a greater Russia, or maybe even re-creating the Soviet Union.

Let’s turn to that time and the annexation of Crimea. I was reading an old article where you wrote, “According to the prevailing wisdom in the West, the Ukraine Crisis can be blamed almost entirely on Russian aggression. Russian president Vladimir Putin, the argument goes, annexed Crimea out of a longstanding desire to resuscitate the Soviet Empire, and he may eventually go after the rest of Ukraine as well as other countries in Eastern Europe.” And then you say, “But this account is wrong.” Does anything that’s happened in the last couple weeks make you think that account was closer to the truth than you might have thought?

Oh, I think I was right. I think the evidence is clear that we did not think he was an aggressor before February 22, 2014. This is a story that we invented so that we could blame him. My argument is that the West, especially the United States, is principally responsible for this disaster. But no American policymaker, and hardly anywhere in the American foreign-policy establishment, is going to want to acknowledge that line of argument, and they will say that the Russians are responsible.

You mean because the Russians did the annexation and the invasion?


I was interested in that article because you say the idea that Putin may eventually go after the rest of Ukraine, as well as other countries in Eastern Europe, is wrong. Given that he seems to be going after the rest of Ukraine now, do you think in hindsight that that argument is perhaps more true, even if we didn’t know it at the time?

It’s hard to say whether he’s going to go after the rest of Ukraine because—I don’t mean to nitpick here but—that implies that he wants to conquer all of Ukraine, and then he will turn to the Baltic states, and his aim is to create a greater Russia or the reincarnation of the Soviet Union. I don’t see evidence at this point that that is true. It’s difficult to tell, looking at the maps of the ongoing conflict, exactly what he’s up to. It seems quite clear to me that he is going to take the Donbass and that the Donbass is going to be either two independent states or one big independent state, but beyond that it’s not clear what he’s going to do. I mean, it does seem apparent that he’s not touching western Ukraine.

His bombs are touching it, right?

But that’s not the key issue. The key issue is: What territory do you conquer, and what territory do you hold onto? I was talking to somebody the other day about what’s going to happen with these forces that are coming out of Crimea, and the person told me that he thought they would turn west and take Odessa. I was talking to somebody else more recently who said that that’s not going to happen. Do I know what’s going to happen? No, none of us know what’s going to happen.

You don’t think he has designs on Kyiv?

No, I don’t think he has designs on Kyiv. I think he’s interested in taking at least the Donbass, and maybe some more territory and eastern Ukraine, and, number two, he wants to install in Kyiv a pro-Russian government, a government that is attuned to Moscow’s interests.

I thought you said that he was not interested in taking Kyiv.

No, he’s interested in taking Kyiv for the purpose of regime change. O.K.?

As opposed to what?

As opposed to permanently conquering Kyiv.

It would be a Russian-friendly government that he would presumably have some say over, right?

Yes, exactly. But it’s important to understand that it is fundamentally different from conquering and holding onto Kyiv. Do you understand what I’m saying?

We could all think of imperial possessions whereby a sort of figurehead was put on the throne, even if the homeland was actually controlling what was going on there, right? We’d still say that those places had been conquered, right?

I have problems with your use of the word “imperial.” I don’t know anybody who talks about this whole problem in terms of imperialism. This is great-power politics, and what the Russians want is a regime in Kyiv that is attuned to Russian interests. It may be ultimately that the Russians would be willing to live with a neutral Ukraine, and that it won’t be necessary for Moscow to have any meaningful control over the government in Kyiv. It may be that they just want a regime that is neutral and not pro-American.

When you said that no one’s talking about this as imperialism, in Putin’s speeches he specifically refers to the “territory of the former Russian Empire,” which he laments losing. So it seems like he’s talking about it.

I think that’s wrong, because I think you’re quoting the first half of the sentence, as most people in the West do. He said, “Whoever does not miss the Soviet Union has no heart.” And then he said, “Whoever wants it back has no brain.”

He’s also saying that Ukraine is essentially a made-up nation, while he seems to be invading it, no?

O.K., but put those two things together and tell me what that means. I’m just not too sure. He does believe it’s a made-up nation. I would note to him, all nations are made up. Any student of nationalism can tell you that. We invent these concepts of national identity. They’re filled with all sorts of myths. So he’s correct about Ukraine, just like he’s correct about the United States or GermanyThe much more important point is: he understands that he cannot conquer Ukraine and integrate it into a greater Russia or into a reincarnation of the former Soviet Union. He can’t do that. What he’s doing in Ukraine is fundamentally different. He is obviously lopping off some territory. He’s going to take some territory away from Ukraine, in addition to what happened with Crimea, in 2014. Furthermore, he is definitely interested in regime change. Beyond that, it’s hard to say exactly what this will all lead to, except for the fact that he is not going to conquer all of Ukraine. It would be a blunder of colossal proportions to try to do that.

I assume that you think if he were to try to do that, that would change your analysis of what we’ve witnessed.

Absolutely. My argument is that he’s not going to re-create the Soviet Union or try to build a greater Russia, that he’s not interested in conquering and integrating Ukraine into Russia. It’s very important to understand that we invented this story that Putin is highly aggressive and he’s principally responsible for this crisis in Ukraine. The argument that the foreign-policy establishment in the United States, and in the West more generally, has invented revolves around the claim that he is interested in creating a greater Russia or a reincarnation of the former Soviet Union. There are people who believe that when he is finished conquering Ukraine, he will turn to the Baltic states. He’s not going to turn to the Baltic states. First of all, the Baltic states are members of nato and

Is that a good thing?


You’re saying that he’s not going to invade them in part because they’re part of nato, but they shouldn’t be part of nato.

Yes, but those are two very different issues. I’m not sure why you’re connecting them. Whether I think they should be part of nato is independent of whether they are part of nato. They are part of nato. They have an Article 5 guarantee—that’s all that matters. Furthermore, he’s never shown any evidence that he’s interested in conquering the Baltic states. Indeed, he’s never shown any evidence that he’s interested in conquering Ukraine.

It seems to me that if he wants to bring back anything, it’s the Russian Empire that predates the Soviet Union. He seems very critical of the Soviet Union, correct?

Well, I don’t know if he’s critical.

He said it in his big essay that he wrote last year, and he said in a recent speech that he essentially blames Soviet policies for allowing a degree of autonomy for Soviet Republics, such as Ukraine.

But he also said, as I read to you before, “Whoever does not miss the Soviet Union has no heart.” That’s somewhat at odds with what you just said. I mean, he’s in effect saying that he misses the Soviet Union, right? That’s what he’s saying. What we’re talking about here is his foreign policy. The question you have to ask yourself is whether or not you think that this is a country that has the capability to do that. You realize that this is a country that has a G.N.P. that’s smaller than Texas.

Countries try to do things that they don’t have the capabilities for all the time. You could have said to me, “Who thinks that America could get the Iraqi power system working quickly? We have all these problems in America.” And you would’ve been correct. But we still thought we could do it, and we still tried to do it, and we failed, right? America couldn’t do what it wanted during Vietnam, which I’m sure you would say is a reason not to fight these various wars—and I would agree—but that doesn’t mean that we were correct or rational about our capabilities.

I’m talking about the raw-power potential of Russia—the amount of economic might it has. Military might is built on economic might. You need an economic foundation to build a really powerful military. To go out and conquer countries like Ukraine and the Baltic states and to re-create the former Soviet Union or re-create the former Soviet Empire in Eastern Europe would require a massive army, and that would require an economic foundation that contemporary Russia does not come close to having. There is no reason to fear that Russia is going to be a regional hegemony in Europe. Russia is not a serious threat to the United States. We do face a serious threat in the international system. We face a peer competitor. And that’s China. Our policy in Eastern Europe is undermining our ability to deal with the most dangerous threat that we face today.

What do you think our policy should be in Ukraine right now, and what do you worry that we’re doing that’s going to undermine our China policy?

We should be pivoting out of Europe to deal with China in a laser-like fashion, number one. And, number two, we should be working overtime to create friendly relations with the Russians. The Russians are part of our balancing coalition against China. If you live in a world where there are three great powers—China, Russia, and the United States—and one of those great powers, China, is a peer competitor, what you want to do if you’re the United States is have Russia on your side of the ledger. Instead, what we have done with our foolish policies in Eastern Europe is drive the Russians into the arms of the Chinese. This is a violation of Balance of Power Politics 101.

I went back and I reread your article about the Israel lobby in the London Review of Books, from 2006. You were talking about the Palestinian issue, and you said something that I very much agree with, which is: “There is a moral dimension here as well. Thanks to the lobby of the United States it has become the de facto enabler of Israeli occupation in the occupied territories, making it complicit in the crimes perpetrated against the Palestinians.” I was cheered to read that because I know you think of yourself as a tough, crusty old guy who doesn’t talk about morality, but it seemed to me you were suggesting that there was a moral dimension here. I’m curious what you think, if any, of the moral dimension to what’s going on in Ukraine right now.

I think there is a strategic and a moral dimension involved with almost every issue in international politics. I think that sometimes those moral and strategic dimensions line up with each other. In other words, if you’re fighting against Nazi Germany from 1941 to 1945, you know the rest of the story. There are other occasions where those arrows point in opposite directions, where doing what is strategically right is morally wrong. I think if you join an alliance with the Soviet Union to fight against Nazi Germany, it is a strategically wise policy, but it is a morally wrong policy. But you do it because you have no choice for strategic reasons. In other words, what I’m saying to you, Isaac, is that when push comes to shove, strategic considerations overwhelm moral considerations. In an ideal world, it would be wonderful if the Ukrainians were free to choose their own political system and to choose their own foreign policy.

But in the real world, that is not feasible. The Ukrainians have a vested interest in paying serious attention to what the Russians want from them. They run a grave risk if they alienate the Russians in a fundamental way. If Russia thinks that Ukraine presents an existential threat to Russia because it is aligning with the United States and its West European allies, this is going to cause an enormous amount of damage to Ukraine. That of course is exactly what’s happening now. So my argument is: the strategically wise strategy for Ukraine is to break off its close relations with the West, especially with the United States, and try to accommodate the Russians. If there had been no decision to move nato eastward to include Ukraine, Crimea and the Donbass would be part of Ukraine today, and there would be no war in Ukraine.

That advice seems a bit implausible now. Is there still time, despite what we’re seeing from the ground, for Ukraine to appease Russia somehow?

I think there’s a serious possibility that the Ukrainians can work out some sort of modus vivendi with the Russians. And the reason is that the Russians are now discovering that occupying Ukraine and trying to run Ukraine’s politics is asking for big trouble.

So you are saying occupying Ukraine is going to be a tough slog?

Absolutely, and that’s why I said to you that I did not think the Russians would occupy Ukraine in the long term. But, just to be very clear, I did say they’re going to take at least the Donbass, and hopefully not more of the easternmost part of Ukraine. I think the Russians are too smart to get involved in an occupation of Ukraine.

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Putin's Russia is oftentimes compared disparagingly on a GDP basis [the GDP comparison is made with Italy] and Russian power projection dismissed out of hand.
Law & Politics

For example, @MittRomney described #Russia as a gas station parading as a country.
Sun Tzu pronounced ''“Pretend inferiority and encourage his arrogance.”

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.@JoeBiden is in a Pincer with Xi & Vladimir holding the console & ratcheting up the pressure & they own the timing on the Ukraine Taiwan Two Step
Law & Politics

The naivete of the US response, the grandstanding smacks of panic and an inability to navigate a new and dynamic landscape. 

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The West seems determined on its own kamikazi.
Law & Politics

Putin sees this optimal window of opportunity to test the readiness of US for bilateral talks with Moscow but also the red line for future concessions if Washington really intends to get Russia out of China’s orbit in the long term. 

Moscow has put its conditions on the table. tweeted @vtchakarova.

and added ''Amid bifurcation of the global system, think of Machiavelli: 

„There’s nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, then to take the lead in the introduction of a new order of things.“ Because this is what Russia’s doing now''
Will the West deal? Anyone who follows international affairs and who appreciates that outside the Yemen its no longer a Unipolar World has to understand ''The Great Balancer'' has to be accommodated.

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.10103
Dollar Index 98.077
Japan Yen 115.45
Swiss Franc 0.919005 
Pound 1.331675 
Aussie 0.737105 
India Rupee 76.1375 
South Korea Won 1215.93
Brazil Real 5.0324000 
Egypt Pound 15.7302 
South Africa Rand 15.7302 

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Sudan is once again lurching towards economic collapse in the aftermath of a coup in October, with exports plummeting more than 85% in January @ReutersAfrica

Sudan is once again lurching towards economic collapse in the aftermath of a coup in October, with exports plummeting more than 85% in January according to central bank data and the currency sliding on the black market.

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Sudan welcomes military base agreement with Russia in the Red Sea. Why project power into the Eastern Mediterranean? Massive Gas fields. @DrPippaM

Sudan welcomes military base agreement with Russia in the Red Sea. Russia now control ports in Syria, Libya, Egypt,now Sudan and are aiming at Odessa. Why project power into the Eastern Mediterranean?  Massive Gas fields.  

28 OCT 19 :: From Russia with Love


“Our African agenda is positive and future-oriented. We do not ally with someone against someone else, and we strongly oppose any geopolitical games involving Africa.”

“Russia regards Africa as an important and active participant in the emerging polycentric archi- tecture of the world order and an ally in protecting international law against attempts to undermine it,” said Russian deputy foreign minister Mikhail Bogdanov back in November 2018.

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Egypt has seen an estimated $3 billion leave its treasury markets since the Russian invasion of Ukraine last week as investors flee emerging markets for safer pastures - Source — Reuters @moneyacademyKE


There is no training – classroom or otherwise.. that can prepare for trading the last third of a move, whether it's the end of a bull market or the end of a bear market. 
There's typically no logic to it; irrationality reigns supreme, and no class can teach what to do during that brief, volatile reign. Paul Tudor-Jones

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21-JAN-2019 :: @harari_yuval & money

“Money is accordingly a system of mutual trust, and not just any system of mutual trust: money is the most universal and most efficient system of mutual trust ever devised.”
“Cowry shells and dollars have value only in our common imagination. Their worth is not inherent in the chemical structure of the shells and paper, or their colour, or their shape. In other words, money isn’t a material reality – it is a psychological construct. It works by converting matter into mind.”
The Point I am seeking to make is that There is a correlation between high Inflation and revolutionary conditions, Zimbabwe is a classic example
The Mind Game that ZANU-PF played on its citizens has evaporated in a puff of smoke.

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Together Russia and Ukraine supply 34% of the world’s wheat, and Ukraine accounts for 16% of global corn exports. @David_McNair

The majority of these exports go through Odessa and other ports on the Black Sea, which are now closed to commercial shipping.

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Large areas of Ukraine’s production border Russia. The conflict could disrupt planting for 2022. @David_McNair

While most wheat and barley crops are harvested in the summer and exported during the fall, maize exports tend to continue through spring. 

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Disruptions in Russian exports of fertiliser could impact crop yields in African countries. @David_McNair

And the knock on impacts of disruption in supply of animal feedstocks could impact other agricultural markets.

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In January, the UN’s Vegetable Oil Index was at its highest level ever recorded. @David_McNair

Ukraine is the world’s top exporter of sunflower oil. Buyers are switching to palm which hit record highs on futures markets in early March. Palm is a staple in West Africa

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by Aly Khan Satchu (www.rich.co.ke)
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March 2022

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