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Thursday 09th of June 2022
 
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A perplexing, ever changing matrix, a Squid Game where asset values have to be maintained to support the majesty of the debt, a meta verse paid for by the serfdom of the ordinary Joe. @hendry_hugh
World Of Finance

A perplexing, ever changing matrix, a Squid Game where asset values have to be maintained to support the majesty of the debt, a meta verse paid for by the serfdom of the ordinary Joe. Where are the opiates that will keep the many in their chains? Why do the stakes keep rising?



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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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If the Fed is serious about inflation it should hike rates at next FOMC by 150 BPs @PeterLBrandt
World Of Finance


Current inflation rate in U.S. at 8.3% is highest since 1981
Short-term Treasury rates (30-day T-Bills) in 1981 reached high of 16.7%
What drugs are Fed governors on to have Fed Funds rate at 1%? 
If the Fed is serious about inflation it should hike rates at next FOMC by 150 BPs

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The rouble has become the world's best-performing currency so far this year @Reuters
World Currencies


The Russian rouble climbed on Wednesday, firming past 60 per dollar, despite Russia's decision to ease some capital controls and expectations of an interest rate cut at an upcoming central bank meeting.

At 1211 GMT, the rouble was 2.2% stronger against the dollar at 59.66 on the Moscow Exchange , leaving the relatively narrow range of 60.0-62.5 it was in over the past few days after rapid swings in May.

The rouble has become the world's best-performing currency so far this year

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Monday, June 11, 2012 The Serena @SerenaHotels
N.S.E Equities - Commercial & Services


MY memories of the Serena start in Mombasa years back when the managing director Mahmoud Jan Mohamed was the manager.

I was then a teenager and remember losing my heart to a girl, who would beat me at table tennis, in a bikini. That table tennis Table is still there.

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30 JUL 12 :: The Polana The Jewel in the @SerenaHotels Crown
N.S.E Equities - Commercial & Services


Lourenço Marques founded a settlement here in 1544 and when Mozambique gained independence from Portugal in 1975, the city was renamed in honour of Maputa, a legendary chief. 

We drove through the Praca de Independencia and the Concierge told us that Samora Machel would fill it and speak all day.
“The communists liked to make long speeches,” he said.
As we entered the Polana, we all fell into a reverie. The Polana was designed in 1922 in the ‘Palace Style’. 

In 1936, such was the hotel’s prominence that it was bought by the millionaire IW Schlesinger, who reputedly paid 400,000 pounds for it. 

It’s known as the ‘Grande Dame’ of Africa. It is very riviera and all the more remarkable for being parked on a cliff, in Maputo, right on the edge of Africa. 

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Astronomers ponder 'cosmic mystery' over powerful radio wave bursts @Reuters
Misc.


Since being discovered in 2007, astronomers have struggled to understand what causes phenomena called fast radio bursts involving pulses of radio-frequency electromagnetic radiation originating from places inside our Milky Way and other galaxies. 

Radio waves have the longest wavelengths in the electromagnetic spectrum

Researchers on Wednesday said they have detected a fast radio burst, or FRB, originating from a dwarf galaxy located nearly 3 billion light-years from Earth. A light year is the distance light travels in a year - 5.9 trillion miles (9.5 trillion km). 

"Fast radio bursts are intense, brief flashes of radio light that are powerful enough to be seen from across the universe," added Caltech astronomer and study co-author Casey Law. 

"The burst blinks on and off in about a millisecond, far faster than the blink of an eye. Some sources of FRBs have been found to emit multiple bursts in what look like storms of activity, but others have only been seen to burst once."

The newly described FRB is a repeating one that also features a persistent but weaker radio emission between bursts. In other words, it always remains "on." 

Most of the roughly 500 known FRBs do not repeat. The new one closely resembles another discovered in 2016 that was the first FRB whose location was pinpointed.

"The abundance of models reflects our lack of understanding of FRBs. Our work favors active repeaters being born out of an extreme explosive event such as a supernova. These active repeaters are also young, as they have to be seen not long after the birthing event," Li said.

"FRBs have rapidly risen to become a wonderful example of an astrophysical puzzle, just as gamma-ray bursts were a few decades ago," Law said.

 "We know more and more about the phenomenon, where the sources live, how often they burst, etc. However, we are still chasing for that golden measurement that will give us a definitive answer to what causes them."

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Count the Almonds, Paul Celan
Misc.


count what was bitter and kept you awake,

count me among them:

I searched for your eye, when you opened it and no one looked at you,
I spun that secret thread,
along which the dew you thought
slid down to the jars,
watched over by a saying that found its way to no one’s heart.

Only there did you wholly enter the name that is yours,
did you step sure-footed toward yourself,
did the hammers swing free in the belfry of your silence,
the overheard reach you,
the dead put its arm around you too,
and all three of you walked through the evening.

Make me bitter.
Count me among the almonds.

Zähle die Mandeln,

zähle, was bitter war und dich wachhielt,
zähl mich dazu:

Ich suchte dein Aug, als du’s aufschlugst und niemand dich ansah,
ich spann jenen heimlichen Faden,
an dem der Tau, den du dachtest,
hinunterglitt zu den Krügen,
die ein Spruch, der zu niemandes Herz fand, behütet.

Dort erst tratest du ganz in den Namen, der dein ist,
schrittest du sicheren Fußes zu dir,
schwangen die Hämmer frei im Glockenstuhl deines Schweigens,
stieß das Erlauschte zu dir,
legte das Tote den Arm auch um dich,
und ihr ginget selbdritt durch den Abend.

Mache mich bitter.

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Bidens West Asia tour is put on hold as the US loses its grip on the Gulf @TheCradleMedia @abdelbariatwan
Law & Politics

US President Joe Biden’s planned trip to West Asia later this month has been postponed until July, according to reports citing diplomatic sources. 

However, even this new proposed date is uncertain, and is subject to further postponement or cancellation.
While Biden stays on schedule with his official visits to East Asia, New Zealand and Europe, why is West Asia so difficult to pin down?
Biden’s itinerary was due to include both Tel Aviv and Riyadh, amid efforts to improve strained relations with the latter, in particular. 

Neither the White House nor the Israeli and Saudi embassies in Washington have offered a reason for the change of plans.
It has been speculated that Biden’s first trip to the region as president has been shelved, in part, due to political uncertainties in Israel, with Prime Minister Naftali Bennett’s coalition having lost its majority status.
So serious is the political impasse that Bennett has warned that the state is teetering on the edge of collapse. 

As the Jerusalem Post noted, “the US president is highly unlikely to come if the opposition succeeds in dissolving the Knesset and forcing early elections.”
However, it is more likely that the reason for the postponement is over the war in Ukraine which, contrary to mainstream media coverage, is not currently progressing in accordance with the collective west’s expectations.
Why was Biden’s trip postponed?
Ukraine is a top foreign policy priority for both Biden and the US political, military and media establishment. 

This has naturally reduced West Asia’s general importance in the Beltway, although the region remains vital to secure non-Russian energy sources.
But a successful Russian diplomatic maneuver aborted Biden’s tour days before it was scheduled to begin, and hampered Washington’s attempts to fast-track the restoration of its relations with several Persian Gulf states.
Russian Foreign Minister Sergei Lavrov began an early tour of the Gulf states early last week, and met with Gulf Cooperation Council (GCC) foreign ministers in Riyadh, where Russia and the region’s biggest oil producers reaffirmed their support for the OPEC+ alliance and agreed-upon energy outputs.
Historically, US control in West Asia, especially the Arab states of the Persian Gulf, was absolute and unchallenged

However, for the first time in 80 years, there are signs of a change in the geopolitical map of strategic alliances in favor of Moscow.
While the Russian military is busy thwarting the western agenda in Ukraine, Russian diplomacy may be wresting West Asia from the decades-long hold the US has had on the region.
Losing grip on the Gulf
No one would have imagined that Persian Gulf monarchies could be on the same page as the historically ‘revolutionary’ Arab states such as Algeria, Syria, Iraq and Egypt. 

This development renders the chances of the Biden’s tour ending in failure, greater than the chances of its success.
Arguably, the most important stop in Biden’s ‘supposed’ tour is Saudi Arabia and a highly-anticipated meeting with its de facto ruler Saudi Crown Prince Mohammed bin Salman (MbS).
However, Washington has already downplayed any talk of a visit to the kingdom, once branded as a “pariah” state by then presidential candidate Biden. 

On Friday, despite thanking the Saudis and OPEC for their minimal increase in oil supply, Biden stated he had “no direct plans at the moment” to visit Riyadh.
Asked about the possibility of Biden going to Saudi Arabia, White House Press Secretary Karine Jean-Pierre told reporters last Wednesday there were no travel plans to announce, and offered a vague: 

“the president will look for opportunities to engage with leaders from the Middle East region.”
This indecisive attitude by Washington reflects its de facto new position as a secondary player in the Persian Gulf. 

The US is fully in ‘reactive’ mode, as it watches Moscow taking advantage of the Saudi-US rift to distance MbS further from decisions favorable to his American ally, such as rejecting Washington’s pressure to increase oil production to reduce prices.
Not willing to let go
It appears that the US has effectively lost most of the Gulf states (with the exception of Qatar) in favor of the new, more wily Russian ally. 

This loss was reflected in the recent decision of OPEC to increase oil production by only 200,000 barrels per day, significantly below the one million barrels per day. the US has sought.
Will the US administration accept this defeat easily and raise a white flag? The answer is ‘no,’ as Biden will cleave to long-established Beltway policy for West Asia, the most important aspect of which is the US military bases in the Persian Gulf.
Contrary to what local populations are encouraged to think, the US military bases were not established to protect the host states, but rather to ensure – even force – their government commitment to US interests and to submit to Washington’s diktats.
With regards to the current US pre-occupation with Ukraine, the war is tilting in Russia’s favor, both in the military and economic realms, with an almost complete failure of western-imposed economic sanctions.
The longer Biden delays his West Asia tour because of ‘non-ideal conditions’ in the host countries, the more those conditions are likely to evolve against US interests. 

Neither Saudi Arabia nor what’s left of the Israeli coalition government are waiting around for Biden – especially when nothing is delaying frequent trips by the Russians, Chinese, and other multipolar actors from filling that American gap.

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Vanity of Vanities! All is vanity
Law & Politics


Vanity of Vanities! All is vanity


The geoeconomic debacle is off the scale.  

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Before proceeding, we should note that pointing out the flaws in the West’s war response is not “pro-Putin,” nor is it “unpatriotic” as some propagandists on Twitter would have you believe. It is the opposite. Crazy Pills @DoombergT
Law & Politics


Until we collectively understand how Putin gained powerful leverage over us and why our economic response is not only destined to fail but also likely to backfire, we cannot craft a better path forward.

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Political decision-making is now driven by often weaponized babble.
Law & Politics

At a time when what is required is agile multi disciplinary thinking we have ''weaponized babble''



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or a while regime change was de rigeur
Law & Politics


or a while regime change was de rigeur


Muammar Gaddafi was decapitated and the domino effect only stopped when Vladimir Putin decided he was going to put a stop to it and intervened on behalf of Bashar Al-Assad in Syria.

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#OECD #EconomicOutlook The Price of War @OECD
World Of Finance


The war has also triggered a cost-of-living crisis, affecting people worldwide. 

When coupled with China’s zero-COVID policy, the war has set the global economy on a course of slower growth and rising inflation - a situation not seen since the 1970s. 

Global GDP growth is now projected to slow sharply this year, to around 3%, and remain at a similar pace in 2023. This is well below the pace of recovery projected last December.
Growth is set to be markedly weaker than expected in almost all economies. Many of the hardest-hit countries are in Europe, which is highly exposed to the war through energy imports and refugee flows.

The new OECD projections show the large and global impact the war is having on inflation, which has already reached 40-year highs in Germany, the United Kingdom and the United States.

Russia and Ukraine are important suppliers in many commodity markets. Together they accounted for about 30% of global wheat exports, 20% for corn, mineral fertilisers and natural gas, and 11% for oil. 

Prices for these commodities increased sharply after the onset of the war.
Without action, there is high risk of a food crisis. Supply disruptions are rising, particularly threatening low-income countries that are highly dependent on Russia and Ukraine for basic food staples. 

With public budgets stretched by two years of the pandemic, these countries could struggle to provide food and energy at affordable rates to their populations, risking famine and social unrest.
The surge in commodity prices and possible disruptions to production will have significant consequences. 

The sharp rise in prices is already undermining purchasing power, which will force lower income households worldwide to cut back on other items to pay for basic energy and food needs.

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.07194 
Dollar Index 102.574
Japan Yen 134.3085 [whoa!]
Swiss Franc 0.97862 
Pound 1.252675 
Aussie 0.716645 
India Rupee 77.7200 
South Korea Won 1260.375 
Brazil Real 4.9001 
Egypt Pound 18.693100 
South Africa Rand 15.312515

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Hedge Fund D1 Borrowed Billions for Hot Bet Now Seen Melting Down @wealth
World Of Finance


Hedge funds were tallying gains on their hottest bet in years when Dan Sundheim reached an unusual deal with JPMorgan Chase & Co. to go even further.

With the bank’s help in August 2020, Sundheim’s D1 Capital Partners used its stakes in private companies as collateral for borrowing $2 billion that the firm could put toward yet more of those stakes, among other things. 

Last year that focus on private companies looked brilliant, as D1 updated its valuations and posted a whopping 70% gain in that part of its portfolio.

Now, the industry is bracing for a reckoning.

Across Wall Street, billionaire investors and their advisers are urgently trying to figure out how much exposure they have to plunging values in Silicon Valley unicorns and other private ventures. 

They’re reviewing disclosures by some of the most active buyers of those assets, including D1, Tiger Global Management, Coatue Management, Lone Pine Capital and Viking Global Investors.

Clients had been giving their money managers more leeway to buy assets that can be hard to value and slow to sell. Some firms used leverage to boost returns.

Yet valuations of many closely held companies are tumbling even harder than the technology stocks that slumped on public markets this year.

 That has left hedge fund investors trying to figure out whether their money managers might suspend withdrawals, face demands from lenders to post more collateral, or -- in a worst-case scenario -- have to start selling investments quickly enough to drive down asset prices in a chain reaction.

“Years of cheap and easy money have driven up valuations,” said Taylor Rosanova, head of the fair value group at Marcum, which helps investors mark privates. 

“This year company multiples will fall, investor marks will fall, values in totality will fall.”
There’s a reason hedge funds haven’t traditionally loaded up on stakes in private companies. 

Such assets are usually the domain of venture capital and private equity firms that retain investor funds for anywhere from three to seven years, giving managers ample time to find an opportune moment to sell. 

Hedge fund clients, in contrast, generally expect access to their money in windows every month or quarter.
Valuation declines are starting to come into focus. Venture capital firms have watched their holdings slump enough to push the Refinitiv Venture Capital Index down 47% this year -- more than double the 22% slide in the Nasdaq Composite Index of publicly traded stocks.

Drops in the value of specific companies are emerging in a variety of places. 

Pandemic darling Instacart Inc. slashed its estimated valuation by almost 40% to $24 billion in March after struggling with decelerating growth. 

In April, mutual fund giant Fidelity Investments marked down a stake in social media platform Reddit by more than a third. 

Other once-high-flying private companies including Epic Games, Chime and Klarna are trading at discounts ranging from 20% to 60% in secondary markets, data from Next Round Capital show.

The impacts are starting to take hold at notable funds. 

Tiger’s hedge fund lost 52% this year through May. 

It blamed several stocks and substantial markdowns on private assets. Even before Instacart lowered its valuation, 

Tiger slashed its own estimate, pegging the company at $14 billion, according to people familiar with the matter.
Meanwhile, D1 has told investors who selected a 50-50 mix of public and private assets that the strategy lost 23% through May. 

The firm attributed most of the damage to public investments, which fell 44%. It marked down private assets only 8% -- including 0.05% last month. 

There’s a reason it wasn’t more dramatic: D1 assesses the value of its private stakes quarterly, with only some exceptions in the interim. 

The next round is due at the end of this month.

When valuations turn sharply downward, private markets can take six to nine months to settle on new prices, said Ken Smythe, founder of Next Round Capital, which helps institutional investors trade such assets. 

One reason is that sales tend to stall after a plunge, with investors reluctant to lock in losses.

“The secondary market is in a quandary because people can’t figure out what stuff is worth right now,” Smythe said. 

“Buyers are demanding lower prices, making liquidity difficult for many of these names.” 

Sellers, meanwhile, “don’t want to accept the reality of how much less they’re worth now.”

In the starkest sign yet of the strain on hedge funds, Tiger said last week that it couldn’t continue to fill redemptions the normal way because so much of its portfolio was invested in hard-to-sell stakes in private companies. 

As losses and redemptions mounted in the first quarter, the firm exited 83 stocks. 

Now if investors want to pull money from Tiger’s hedge and long-only funds, a portion of the liquid assets will be sold, but private investments will be placed in a separate account to be cashed out later.
Coatue Management also began “side-pocketing” venture capital stakes this year for investors who withdraw from its flagship fund. 

Like a number of other hedge fund managers, it also runs more-traditional venture capital funds with lockup periods.
Once among Wall Street’s most celebrated risk-takers, hedge fund managers have been humbled over the past decade by lackluster returns that trailed most private equity and venture capital funds. 

One exception was Tiger, which specializes in venture capital investments, and found success by weaving those private stakes into its hedge fund portfolio.
Tiger eventually inspired a generation of hedge fund managers to pursue similar strategies. Sundheim, the former chief investment officer at Viking Global, set up D1 in 2018, joining the fray with a novel system.

From the start, D1 let clients select how much of their money would be shunted into a portfolio of private assets, initially allowing them as much as 35% exposure. 

Clients can redeem the liquid portion of their investment relatively quickly but have to wait until the private portion is sold to access that cash. 

Sundheim later offered even more exposure to private assets, letting clients allocate as much as 99% of their money to that strategy.
The firm now oversees more than $20 billion with roughly half invested in more than 70 private companies, according to people familiar with the matter. 

They include Squarespace, GoPuff and Collectors Universe. D1 doesn’t collect fees on the performance of those holdings until it exits the positions.

While it’s normal for hedge funds to lever up bets, the structure of D1’s financing deal with JPMorgan resembles the so-called NAV loans more commonly used by private equity funds. 

People with knowledge of D1’s facility described its size, $2 billion, and said it hasn’t faced collateral calls. 

They noted that the assets used to obtain the financing were worth multiples more than the amount of money borrowed -- providing a cushion in the event of markdowns.

To secure the loan, D1 placed private investments into holding companies that it put up as collateral, according to a financing statement reviewed by Bloomberg. 

The document also notes that D1 made a “commitment to provide credit support,” backed by a portfolio of public securities.
Less than half a year after D1 set up that loan, it reached an additional deal with a US unit of Barclays Plc that included an “arranged lending and custody account agreement” with an affiliate of the bank in London, according to another financing statement. The terms of that pact aren’t spelled out in the document.
Spokespeople for D1, Tiger, JPMorgan and Barclays declined to comment.
The document describing the loan arranged by JPMorgan doesn’t specify which assets were used to provide collateral or how the financing was ultimately used.
The loan has become a particular point of fascination among hedge fund investors trying to learn more about what sorts of conditions could trigger a demand for more collateral, according to people with knowledge of their concerns.
Even billionaires who don’t have money with Sundheim have been trying to figure out what kinds of holdings he might be pressured to sell if losses mount. 

That’s because of the herd behavior of many hedge funds, which often favor the same stocks and private assets. 

Hasty disposals by one investor could drive down prices and trigger losses for others.
In any case, JPMorgan’s exposure is likely limited. The financial statement describes the bank as the collateral agent, and the financing was ultimately provided by a half-dozen lenders, according to a person with knowledge of the structure. 

Banks offering NAV loans typically extend only 10% to 20% of the value of the underlying collateral. 

Even with that buffer, they charge interest rates around 3 to 6 percentage points higher than comparable government bonds.

Diverging Valuations
It can take hedge funds months to adjust valuations on illiquid assets. 

During a downturn, startups may be less likely to raise money for fear of a lower valuation. 

And no news on that front can be a relief for fund managers, letting them leave numbers where they were.
Many funds base estimates on a mix of factors that, in addition to fundraisings, can include a private company’s latest financial reports, or comparisons to a basket of similar publicly traded companies. 

While managers also get valuation assistance from third parties like SS&C Technologies Holdings or Houlihan Lokey Inc., a fund generally has wide latitude in setting policies, as long as it doesn’t mislead investors.
“Could you look across various funds’ portfolios and see each marking the same asset differently? That’s a real possibility,” said Kristen VanGelder, deputy chief investment officer at Evanston Capital. 

More conservative methods would adjust for this year’s stock slide, she said. “Just because there hasn’t been a recent financing round there may still be reason to mark down a private holding based on what we’ve seen happen in public markets.”

Some hedge funds are looking to a practice that gained attention during the 2008 financial crisis: the use of side pockets.
Parking certain holdings in special entities that can be wound down later -- once prices stabilize -- helps to avoid fire sales. 

The practice came into vogue during the credit crunch when jittery investors sought to redeem hundreds of billions of dollars only to watch money mangers lower the gates on withdrawals.
That step may ultimately protect a hedge fund's backers from steeper losses -- but it has a tendency to raise alarms among other investors and ratchet up pressure on rival money managers to explain their valuations.
“The days of funds being able to claim ‘our private book is fine’ are over,” said Smythe at Next Round.

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14-FEB-2022 :: Its the End of the Bull market obviously.
World Of Finance


14-FEB-2022 :: Its the End of the Bull market obviously.


The Music has been playing for Eternity and its about to stop



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A REGIME CHANGE IS UNDERWAY [in the markets]
World Of Finance


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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Anybody can be decisive during a panic It takes a strong Man to act during a Boom.
World Of Finance

“The businessman bought at ten & was happy to get out at twelve; mathematician saw his ten rise to eighteen, but didn’t sell because he wanted to double his ten to twenty”



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Without action, there is high risk of a food crisis #OECD #EconomicOutlook The Price of War @OECD
Food, Climate & Agriculture


Russia and Ukraine are important suppliers in many commodity markets. Together they accounted for about 30% of global wheat exports, 20% for corn, mineral fertilisers and natural gas, and 11% for oil. 


Prices for these commodities increased sharply after the onset of the war.
Without action, there is high risk of a food crisis. 

Supply disruptions are rising, particularly threatening low-income countries that are highly dependent on Russia and Ukraine for basic food staples. 

With public budgets stretched by two years of the pandemic, these countries could struggle to provide food and energy at affordable rates to their populations, risking famine and social unrest.
The surge in commodity prices and possible disruptions to production will have significant consequences. 

The sharp rise in prices is already undermining purchasing power, which will force lower income households worldwide to cut back on other items to pay for basic energy and food needs.


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@FAO and @WFP warn of a looming widespread food crisis as hunger threatens stability in dozens of countries. @FAOemergencies
Food, Climate & Agriculture


@FAO and @WFP warn of a looming widespread food crisis as hunger threatens stability in dozens of countries. @FAOemergencies



A new report calls for urgent humanitarian action in 20 hotspots where acute hunger is expected to worsen from June-September 2022.

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‘Hunger Hotspots – FAO-WFP early warnings on acute food insecurity’ report @FAO and @WFP
Food, Climate & Agriculture


‘Hunger Hotspots – FAO-WFP early warnings on acute food insecurity’ report @FAO and @WFP 


For the outlook period from June to September 2022, FAO and WFP are issuing an early warning for urgent humanitarian action in 20 hunger hotspots. 

These are countries or regional clusters where parts of the population are likely to face a significant deterioration of already high levels of acute food insecurity in the coming months that will put their lives and livelihoods high at risk.

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May 29 It is also clear that Putin is seeking a quid pro quo between easing the Food situation with a removal of sanctions.
Food, Climate & Agriculture


May 29 It is also clear that Putin is seeking a quid pro quo between easing the Food situation with a removal of sanctions. 


The UNFAO Food Index sits just under a record reached in March this year. 

Liz Truss accused Russian President Vladimir Putin of holding the world to ransom over food, responding to a question about whether she supported lifting sanctions in exchange for grain exports from Ukraine.

"What we cannot have is any lifting of sanctions, any appeasement, which will simply make Putin stronger in the longer term," Truss said.

The Question is whether there is an appetite for a quid pro quo because if there is not, then we are going to see another serious spike. 

When everything is financialized, everything can be managed and controlled. (Until it can't.) @TFMetals

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Sunday, April 10, 2022 Apocalypse Now
Commodities


Sunday, April 10, 2022 Apocalypse Now


Food prices are soaring at a record pace, rising another 13% in March. @lisaabramowicz1
“But it is a curve each of them feels, unmistakably. It is the parabola They must have guessed, once or twice -guessed and refused to believe -that everything, always, collectively, had been moving toward that purified shape latent in the sky, that shape of no surprise, no second chance, no return.’’
Gravity’s Rainbow is a 1973 novel by Thomas Pynchon
The consequences for global stability are now unfathomable.

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Ukraine Safe Passage Grain Talks Fail, Expect Still Higher Food Prices Globally @MishGEA
Food, Climate & Agriculture


Ukraine Safe Passage Grain Talks Fail, Expect Still Higher Food Prices Globally @MishGEA


 Ukraine Nixes a Potential Deal. 

“We cannot rule out Russia’s plans to use such a corridor to attack Odessa and southern Ukraine. That is why effective security guarantees are needed to restore shipping,” the Ukrainian Foreign Ministry said.

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Venezuela’s Capitalist Playground Has $200,000 Ferraris and a Bustling Casino @markets
Emerging Markets


Venezuela’s Capitalist Playground Has $200,000 Ferraris and a Bustling Casino @markets 


At 10:30 p.m., gamblers are already packing the slot machines at the casino. Bartenders offer free booze, dancers swing to merengue music, and bingo players compete for a $500 prize near the poker tables. 

At midnight on this Friday in May, one lucky player wins a raffle for a $2,900 Yamaha motorcycle, then trades the keys for cash.

It’s Las Vegas with a Latin American twist. Not that long ago, gambling would have been illegal here in Caracas, bastion of the far left. 

Hugo Chávez, Venezuela’s firebrand populist leader who died in 2013, banned casinos, saying they caused social decay comparable to “prostitution, addiction, and drug use.”

Those days are gone, as is clear to anyone visiting Las Mercedes, the bustling neighborhood east of downtown that’s home to the new Humboldt Casino. 

“During this past 10 years, we were missing a place like this, where we could have fun,” says Maria Elena Millan, a 52-year-old real estate broker, before heading to a roulette wheel with her husband.

More than two dozen office towers are rising from the narrow lanes of Las Mercedes. On the ground level of the 15-story Jalisco Tower, passersby can marvel at three red Ferraris on display at a dealership. 

The four-seater Portofino convertible, the cheapest, retails for more than $200,000, which equals the annual pay of 590 entry-level public employees. 

Across the street, an apartment building is under construction. A brochure advertises a rooftop pool, game salon, gym, and co-working space. 

Stores sell Hermès and Pronovias clothing around the corner. Not far away, a shop displays $1,000 stilettos from Gianvito Rossi, the Milan designer.

This conspicuous consumption represents a remarkable turnaround—still early, delicate, and available only to the wealthiest in this nation of 30 million. 

Until recently, Venezuela was known as an economic basket case with hyperinflation that neared 2 million percent a year. Its currency, the bolivar, was worth so little that criminals no longer bothered to steal it and enterprising souls wove the bills into handicrafts to sell to tourists for a few US dollars. 

Around Las Mercedes, stores shut down and children foraged for food in garbage bags.

The neighborhood’s transformation follows a ­stunning about-face by President Nicolás Maduro, the ­barrel-chested former vice president handpicked by Chávez. 

Over the past three years, Maduro has eased restrictions on businesses, as well as price controls and regulations; last year he dropped the ban on casinos.

Most significant, in late 2018, Maduro let the US dollar circulate legally. 

Everyone, from executives to street vendors, now carries greenbacks, which could have led to jail time under Chávez. 

“Dollarization helped out a lot,” says Andrea Malavé, general manager of Las Mercedes’s Paw3r store, whose bright and sporty T-shirts and leggings are Venezuela’s answer to Lululemon. 

Malavé remembers how she and her seven employees struggled to keep up with rising prices. With inflation under control, her business is thriving. 

Paw3r T-shirts, the latest fashion trend among the young and athletic, are everywhere. The company now has 30 staffers working in two stores in eastern Caracas, with plans for two more by year end.

Almost every data point shows the economy is improving

The country’s gross domestic product is expanding by anywhere from 1.5% to 20%, depending on which economist is forecasting

Hyperinflation officially came to a halt in January. Some of the 6 million Venezuelans who fanned out across Latin America in search of something—anything—better have started to move back home.

The manufacturing sector could grow 10% this year, if the government can stimulate consumption, reduce competition from imports, improve public services, and adjust tax policy, says Luigi Pisella, president of Conindustria, the country’s largest industry association.

Foreign investors who’ve shunned the country, in part because they fear violating US sanctions, have begun to visit. 

They’re encouraged by signs of a rapprochement between Venezuela and the US, as well as surging commodities prices. 

Venezuela has the world’s largest proven oil reserves; it’s a treasure that could grow more valuable as countries turn away from Russian oil after the invasion of Ukraine.

And yet, 90% of the country still lives in poverty, subsisting on as little as $30 a month. 

Those gleaming office towers in Las Mercedes are still fairly empty. Pisella and others worry that business-friendly policies could easily reverse. 

The state oil industry languishes from disinvestment. What’s more, Maduro has indicated that dollarization is temporary. 

In many ways, he clings to Venezuela’s revolutionary identity to keep Chávez’s legacy alive. 

He supports Russia’s Vladimir Putin, strikes oil deals with Iran, and defends fellow Latin American leftists in Cuba and Nicaragua. 

“This stabilization is fragile,” says Luis Arturo Bárcenas, senior economist at Ecoanalítica, a financial analysis company in Caracas. He notes the region’s long history of failed economic transformations.

In short, Venezuela’s economy is both undeniable and something of a Potemkin village. It may lead to a new path, or everything may fall apart just as fast.


The turnaround in Las Mercedes, emblematic of the pockets of prosperity across Venezuela, owes much to two unlikely figures. 

They’re economists from Ecuador: Patricio Rivera and Fausto Herrera, who both worked for their country’s former president, Maduro’s fellow socialist ideologue Rafael Correa.

The duo has been advising the Maduro administration behind the scenes since 2019. They’ve pushed for the adoption of the dollar, government deficit reduction, and flexibility for the private sector, according to people familiar with their roles who asked not to be identified because they weren’t authorized to speak publicly. 

They’d established some of these policies in Ecuador, another dollarized, oil-exporting economy that, like Venezuela, had defaulted on its debts. Rivera and Herrera didn’t respond to interview requests.

“They have the experience of working with an oil-­producing country that became a pariah with the ­international investment community and then brought it back to have market access,” says Hans Humes, chief executive officer of Greylock Capital Management LLC in New York, whose interactions with Rivera and Herrera date to Ecuador.

With offices at the Finance Ministry, the Ecuadorians sit in on high-level meetings, participating in every financial decision. 

During their tenure, the ministry painted over murals depicting Chávez and removed political paraphernalia, according to businesspeople who’ve met them there.

Rivera and Herrera, who have no official titles, work as intermediaries for international investors and Venezuelan industrialists. 

Rivera, a shy technocrat full of nervous energy, advises on monetary policy and budgets, as well as communication with businesses. 

Herrera, Ecuador’s finance minister from 2013 to 2016, offers guidance on relations with investors and international creditors who’ve increasingly shown a willingness to negotiate the terms of the country’s $60 billion of defaulted debt.

Their boss is Delcy Rodríguez, Venezuela’s vice president. Rodríguez and her brother, Jorge, president of the legislature, rose through the Socialist Party ranks. 

She’s become the face of the government’s pragmatic wing. She studied labor law in Paris and wears bright tailored suits and chunky glasses, looking more like a European technocrat than a beret-wearing revolutionary Chavista. 

Maduro notes that others in government are now emulating her business-like style, joking that they’re living on “Delcy’s planet.” 

Still, she’s one of his most trusted advisers, often appearing beside him on state television. 

In a recent episode of a propaganda cartoon show, Maduro stars as the superhero Súper Bigote; a Rodríguez character helps him kill a destructive inflation monster sent by the US.

Under Rodríguez, relying on the Ecuadorians’ advice, the government has backed away from constant inspections and fines. 

It eliminated taxes for thousands of imported products, including the raw materials essential to local industry. 

Within months, empty store shelves filled with imports, often sold more cheaply than those produced locally.

The mere availability of food returned a sense of ­normalcy to parts of the country, quelling some resentment against the government. 

Still, noting the unresolved ­underlying economic problems, some skeptical Venezuelan economists refer to it as pax bodegónica, or peace by convenience store.

Venezuela was one of the only countries in the Americas to slash its deficit during the peak of the pandemic, defying the global trend. 

The shortfall declined from 30% of GDP to less than 5%, according to Luis Oliveros, an economist and a professor at Central University of Venezuela in Caracas. 

The government had implemented the kind of austerity typically imposed by the International Monetary Fund, the enforcer of global financial stability.

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Venezuela’s Capitalist Playground Has $200,000 Ferraris and a Bustling Casino @markets [continued]
Emerging Markets


The shift toward freer markets is sparking the return of the gaudy consumerism of 1970s Venezuela—excesses among the elite that Chávez condemned. 

Maduro’s acceptance of some elements of American-style capitalism has served two goals: ending the financial crisis of the 2010s and staving off US-backed opposition leader Juan Guaidó. 

In 2019 the US toughened economic sanctions, citing anti­democratic behavior and other abuses in Venezuela, after concluding that Maduro rigged an election. 

To encourage him to negotiate with the opposition, President Joe Biden’s administration in May said it would ease some sanctions.

Across the country, residents have noticed a symbolic change. On highway billboards, a stark image of Hugo Chávez’s eyes—stylized in black, peering from a bright red frame—long gazed down at citizens, as if keeping watch over his legacy. 

The posters are mostly gone. It makes sense. Chávez would have railed against what’s happening in Las Mercedes.

Carved out of farmland a century ago, Las Mercedes in the 1950s became a middle-class enclave of single-family homes in the Basque style: timber and stone with red roofs. In the 1980s teenagers flocked here to hear Latin rock. 

It became a shopping destination, a compact district in the shadow of Avila Mountain where about 500 people now live.

The neighborhood’s fortunes ebbed and flowed along with petrodollars; it was also affected by the sanctions, which apply to US companies.

 “There has been a boom originated by money that had no other way out,” says Marco Negrón, a Venezuelan architect and urban planner who’s researched growth in Las Mercedes. 

“It’s very difficult to say how much results from drug-money laundering and how much from the savings from companies or individuals.”


Las Mercedes remains a study in contrasts. The office towers and boutiques line narrow, uneven sidewalks and one-lane streets prone to flooding. 

The power supply is unreliable. Restaurants sell arepas, the Venezuelan cornmeal griddle cake, near high-fashion European boutiques.

Oscar Ramirez, 30, manages a thriving fast-food diner, where half the customers pay—and tip—in dollars. But he and his wife have a small apartment and no savings. 

Although some of his friends and family have returned, others remain in Colombia and Peru. 

“Inflation hasn’t stopped for good,” he says. “Venezuela’s economy hasn’t been fixed. There’s much to be repaired, starting with water and electricity.”

Off Calle Nueva York, the neighborhood’s upscale Tolon Fashion Mall sells Montblanc pens and iPhones. 

International brands, many from Europe—some of which had recently pulled out of the country—are inquiring about space, says Horacio Velutini, CEO of Fondo de Valores Inmobiliario SACA, the real estate fund that owns the mall. 

Velutini is developing a boulevard that will stretch from the main square to the mall. “It’s a place where two worlds converge,” he says. “Where you can have people eating a hot dog for $1 and a person buying a $150,000 watch right across the street.”

On a Thursday evening in early May, the wife of a Chavista lawmaker sits in a restaurant at the Madrid Financial Center, her outfit accessorized with a black, cross-body Chanel bag. 

At 1 a.m., valets fetch hulking SUVs for customers emerging from the restaurant. Others are just arriving to hit the club on the building’s mezzanine. S

ome stop by the El Resuelve hot dog cart. “It’s brought more life, more people at night,” says the vendor, Ramon Rojas, 39, gesturing to the 16-story building. 

“The street has been improving, step by step.” A red Ferrari 458 Spider cruises past Mexican and Japanese restaurants as the sounds of karaoke fill the air.

On Sunday mornings, patrons of the Azu patisserie order $7 almond croissants. 

The Evans family opened the shop in November 2020. María Evans studied cooking in Madrid and learned to bake by traveling across Europe. She incorporates ingredients from the Amazon. 

The family started with four tables and now has 30 and can serve 120 customers.

 “People are spending more, and they want to live nice experiences inside the country,” says her cousin, Alejandro, who manages the restaurant. “Before, they went to Miami. Now they can get those experiences here.”

Nearby, Ilana Chavez and her husband are serving American-style brunch at their restaurant, Marguerite. As French jazz plays, about 50 diners sit around tables set with colorful ceramic plates. 

A meal typically costs $20, about three-quarters of the monthly pay of a civil servant. 

“People can indulge themselves,” Chavez says. “Things are changing. People go to Marguerite to enjoy a dessert when they didn’t before. We were in decline, and now I’m seeing a little bit of light.” 

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Cattle Sale That Dragged Ramaphosa Into Political Storm Is Back BNN Bloomberg
Africa


One of the lots Ramaphosa will be offering for sale at next week’s auction consist of five frozen embryos from a cow named Rogo and a bull called Diambo, whose “progeny are some of the most sought after Ankole in South Africa,” according to the sale catalog. 

At an auction in 2017, three months before Ramaphosa became leader of the ANC, some of his Ankole cattle sold for as much as 520,000 rand each.
Former spy boss Arthur Fraser laid criminal charges against Ramaphosa last week, accusing him of concealing the theft of more than $4 million from the Phala Phala farm in February 2020. 

Ramaphosa has confirmed that money he earned from the sale of animals was taken while he was attending an African Union summit in Ethiopia, but far less than Fraser alleged, and denied doing anything wrong. 

Conclusions

At least @CyrilRamaphosa is trading the Physical [Ankole Cattle] and not Cattle Futures where @HillaryClinton of course had the Midas touch Turned $1,000 Into $99,540, White House Says
http://bit.ly/2MzUZiI 

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Ethiopia’s net debt flow fell back into negative territory in 1Q22, eroding its low FX reserves to a dangerous level. @Markbohlund
Africa


Ethiopia’s net debt flow fell back into negative territory in 1Q22, eroding its low FX reserves to a dangerous level. @Markbohlund


Debt servicing payments amounted to $401m in principal payments and $117m in interest. $33m Eurobond coupon due 13 June. 

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Due to the #Ukraine war, #Ethiopia's government expects to spend an additional $1.59 to $1.9 billion on imports. @PatrickHeinisc1
Africa


Due to the #Ukraine war, #Ethiopia's government expects to spend an additional $1.59 to $1.9 billion on imports. @PatrickHeinisc1


Ethiopia #imports wheat, oil, fertilizers, cooking oil, iron, grain and other products from #Russia and Ukraine.

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Inflation Rate at 18-Year High as Food Costs Surge in Ghana @markets @economics
Africa



Inflation Rate at 18-Year High as Food Costs Surge in Ghana @markets  @economics 


Ghana’s inflation rate jumped to the highest level in more than 18 years in May as food and transport costs surged.
Annual inflation accelerated to 27.6%, the fastest pace since January 2004, from 23.6% in April, 

Government Statistician Samuel Kobina Annim told reporters Wednesday in Accra, the capital. 

The headline inflation rate is more than double the upper ceiling of the central bank’s target band of 6% to 10% and has been above that range for nine months. Prices jumped 4.1% in the month.

Ghana’s central bank on May 23 raised its benchmark interest rate by 200 basis points to 19% -- the highest since 2018 -- to stem a steep increase in food and fuel prices triggered by Russia’s invasion of Ukraine. 

The aggressive hike followed similar moves by other emerging markets from Egypt to South Africa that are raising borrowing costs to rein in surging prices.

Food prices in Ghana climbed 30.1% from a year earlier, compared with a 26.6% increase in April. 

Non-food inflation accelerated to 25.7%, from 21.3% in the previous month, with transport costs surging 39%.

The introduction of a 1.5% tax on electronic payments, which was approved by parliament in late March to help the government reduce its budget deficit added to the inflationary pressures . 

“The cost pressures continue to be strong in the month of May and with the impact of the E-levy,” Courage Martey, an economist with Accra-based Databank Group, said ahead of the release. 

“We expect inflation to rise above 24%. The high level of increases in energy prices will push annual inflation higher.” 
Bank of Ghana Governor Ernest Addison has also warned that the inflation rate may climb further in the coming months, albeit at a slower pace. 

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Debt to Equity conversion at TPS Eastern Africa:
N.S.E Equities - Commercial & Services


Debt to Equity conversion at TPS Eastern Africa:



On 7th June 2022, the company & the Aga Khan Fund for Economic Development entered into a conditional debt conversion agreement under which the Company will convert a debt owed they owe AKFED into new shares of the Company

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Kenya has an outstanding portfolio of four Eurobonds worth a total of $7.1 billion (Sh829.9 billion)
Africa

Conclusions  & Usable foreign exchange reserves of USD 8,219  million H/T @ouma_timothy 

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