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Monday 09th of May 2022
 
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Luck is luck. Luck isn’t structural... Luck is running out Zoltan Pozsar
World Of Finance

Luck is luck. Luck isn’t structural... Luck is running out; central banks were lucky to have price stability as a tailwind when they had to fight crises of FX pegs, par, repo, and the cash-futures basis. Those were the easy crises. The ones you can print your way out of with QE.
But not this time around...

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Its a Wizard of Oz moment
World Of Finance


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 

Deutsche Bank's Jim Reid notes that yesterday's surge in the 2-year US Treasury yield was, by one measure, "the biggest "shock" since October 1979 when Volcker announced his intentions on the world @ReutersJamie
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%

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As a result of our unprecedented sanctions, the ruble was almost immediately reduced to rubble. The Russian economy is on track to be cut in half. @POTUS
World Currencies


It was ranked the 11th biggest economy in the world before this invasion — and soon, it will not even rank among the top 20.

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You can print money, but not oil to heat or wheat to eat wrote @CreditSuisse’s Zoltan Pozsar.
World Of Finance


The Sanction warfare program is a reiteration of the @BarackObama 2014 version but then Oil was dropped to $20.00 and today its trading at $97.56 a barrel. This is the first flaw in the sanction warfare effort.
Russia essentially gave the $ and the Euro the very same exorbitant privilege that King Abdul Aziz Ibn Saud of Saudi Arabia gave President Franklin D Roosevelt aboard the USS Quincy in Great Bitter Lake in February 14, 1945 when the petro dollar economy was symbolically born.
By insisting payments are made in Russian Rubles for Russian commodities Vladimir Putin has withdrawn that exorbitant privilege.
The Russian Ruble rally is real and has much further to go.

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The Geopolitical fault line is most visible in Ukraine and therefore at the European periphery, however, fault lines are emerging all over the global landscape
Law & Politics

The Geopolitical fault line is most visible in Ukraine and therefore at the European periphery, however, fault lines are emerging all over the global landscape and exhibiting multiple feedback loops, which feedback loops all have viral and exponential characteristics.

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The Charge of the Light Brigade
Law & Politics


“Forward, the Light Brigade!” Was there a man dismayed? Not though the soldier knew
Someone had blundered. Theirs not to make reply, 
Theirs not to reason why, 
Theirs but to do and die.
Into the valley of Death Rode the six hundred.

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Markus Reisner, the Russian army continues to make solid progress in its offensive against Ukrainian positions in the Donbass, and it will be victorious in the region @TaranQ
Law & Politics


Markus Reisner, ''the Russian army continues to make solid progress in its offensive against Ukrainian positions in the Donbass, and it will be victorious in the region. This is evidenced by the fact that most of the territories of the DPR and LPR, including large cities, .. 2/10

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Austrian colonel also added that in the West they try not to talk about the obvious advance of the Russian armed forces @TaranQ
Law & Politics


Are already under the control of the Russian army. Russia also controls important facilities in southern Ukraine, on the shores of the Sea of Azov.'' Austrian colonel also added that ''in the West they try not to talk about the obvious advance of the Russian armed forces ..3/10

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and the Western media make a lot of efforts to hide the obvious successes of the Russians, which is a serious mistake. Markus Reisner @TaranQ
Law & Politics


and the Western media make a lot of efforts to hide the obvious successes of the Russians, which is a serious mistake''. Markus Reisner stressed that ''He is following the situation in Ukraine from various sources, and concluded that the West is deeply mistaken in relying ..4/10 @TaranQ

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MBS is holding out for Biden to meet him in Riyadh or invite him to the White House. Biden is reportedly resisting, knowing that such a display would be a public humiliation, after Biden promised to make the Saudi regime a pariah. ⁦@washingtonpost @jo
Law & Politics


MBS is happy to talk with Putin. But both the Saudi ruler and his Emirati counterpart reportedly refused to take a phone call in March from Biden, even though both countries live under the U.S. security umbrella. ⁦

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.051200 
Dollar Index 104.03
Japan Yen 130.9640
Swiss Franc 0.992065
Pound 1.228515
Aussie 0.700845
India Rupee 77.32525
South Korea Won 1274.155
Brazil Real 5.0805 
Egypt Pound 18.5513 
South Africa Rand 16.12385 

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Despite the bloodbath in overall equities, energy stocks continue to move higher. The Great Rotation is now in progress. @TaviCosta
Commodities


The disconnect from other sectors has never been more pronounced. 

“The Great Rotation” is now in progress.

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South Africa moved into a fifth wave of Covid-19 infections as omicron subvariants dominate It reported almost 10,000 new daily cases on Thursday with the highest test positivity rate in four months.
Africa


While the BA.4 and BA.5 sublineages may evade vaccines, they appear to be less severe than their parent strain, vaccinologists say. 

Cases rose across Africa last week and seven countries are experiencing a faster increase in infections than in previous cycles. 

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Local airlines to shut operations Monday as Jet-A1 hits N700/Litre
Africa


He observed that aviation fuel price had in about 12 months risen from N190 per litre to N700 currently. 

He added: “No airline in the world can absorb this kind of sudden shock from such an astronomical rise over a short period. While aviation fuel worldwide is said to cost about 40 per cent of an airline’s operating cost globally, the present hike has shut Nigeria’s operating cost to about 95 per cent''

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Zimbabwe Imposes Capital Controls to Stem Currency’s Slide @markets
Africa


Zimbabwe’s President Emmerson Mnangagwa has imposed capital controls in an attempt to control the currency’s rapid depreciation. 
The Zimbabwean dollar has lost half of its value this year making it Africa’s worst performing currency. 

Banks in the country have been ordered to stop lending with immediate effect “to minimize the creation of broad money that is prone to abuse for purposes of manipulating the exchange rate,” Mnangagwa said in a televised speech. 

The move is meant to support the currency, amid a growing threat of the economy dollarizing for the second time since 2009 when the country last officially turned to the U.S. dollars as hyperinflation soared. 

Old Mutual, the largest insurer in the country, in its quarterly economic brief warned that dollarization is inevitable to stabilize prices. Annual inflation in April soared to 96.4% from 72.7%.

“Banks shall with immediate effect not process third-party country foreign payments,” the president said, referring to payments made to an entity overseas via another country. 

“Third-party foreign payments are susceptible to illicit financial flows which prejudice the country of its hard-earned foreign currency resources.”

The new measures also reverse the administration’s propensity toward the U.S. dollar which had the effect of undermining the local currency reintroduced in February 2019. 

The state pays in part its employees salaries and Covid-19 allowances in the American currency. It had also paid annual bonuses in U.S. dollars last year.

In the southern African nation most payments from fuel to food, medicine and school fees are pegged in U.S. dollars. 

Multiple exchange rates of at least 350 to 420 per U.S. dollar are readily available on the parallel market. The local unit officially trades at 165.99 to the U.S. dollar.

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21-JAN-2019 :: @harari_yuval & money
Africa


''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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EU Plans to Court Africa to Help Replace Russian Gas Imports @markets
Africa


The European Union will seek to step up cooperation with African countries to help replace imports of Russian natural gas and reduce dependence on Moscow by almost two-thirds this year.
Countries in Africa, in particular in the western part of the continent, such as Nigeria, Senegal, and Angola, offer largely untapped potential for liquified natural gas, according to a draft EU document seen by Bloomberg News. 

The communication on external energy engagement is set to be adopted by the European Commission later this month as part of a package to implement the bloc’s plan to cut energy reliance on Moscow.

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The Republic of Congo plans to issue Eurobonds linked to oil warrants to refinance its outstanding debts to commodity traders @Glencore and @Trafigura sources say. @markets
Africa


The deal, expected to launch later this month, is structured as a “debt-neutral” transaction, meaning it will be solely used to refinance about $1.4 billion of the oil traders’ loans and won’t impact the nation’s debt load, the people said, asking not to be identified because the matter isn’t public. 

Citigroup Inc. and Deutsche Bank AG are structuring the bond, while financial advisory firm Rothschild & Co. is working with the government, they said.

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Kenyan Deputy President William Ruto maintains his status as the front-runner to win Aug. 9 elections, an opinion poll released on Thursday showed. Eric Ombok
Africa


Ruto had the support of 39% of 2,033 respondents surveyed by Nairobi-based Tifa Research in late April, up from 38% in February, while 32% said they would back Odinga, up from from 27%. 

Sixteen percent said they were undecided and 12% declined to express a preference. A candidate needs to win more than half the national vote and at least a quarter of the ballots cast in half of Kenya’s 47 counties to succeed President Uhuru Kenyatta.

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East Africa’s biggest economy expanded by 7.5% last year Forecasts GDP growth slowing to 6.7% this year on Ukraine war @markets economics
Kenyan Economy


After experiencing the fastest economic growth in more than a decade, Kenya now expects slower expansion this year due to the spill over effects of Russia’s invasion of Ukraine, according to Treasury Secretary Ukur Yatani.
East Africa’s biggest economy expanded by 7.5% last year and growth would have accelerated to 9% in 2022 were it not for challenges such as food and fuel inflation, scarcity of grains especially wheat, and the weakening of the shilling against the dollar, Yatani said Thursday in the capital Nairobi. 

Expansion is instead forecast at about 6.7%, he said.

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For the first time in three months, the headline @StanbicKE @IHSMarkitPMI PMI dropped below the 50.0 no-change mark in April, falling to 49.5 from 50.5 in March.
Kenyan Economy


Indeed, price gauges remained extremely high during April, driven by increased reports of supply shortages due to the war in Ukraine. Input costs rose to the greatest extent in over eight years.

Finally, business confidence regarding future activity dropped to a record low for the second successive month in April.

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