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Satchu's Rich Wrap-Up
 
 
Friday 02nd of September 2022
 






’Voodoo Economics’’ a Wizard of Oz moment
Law & Politics

We have reached the point when the curtain was lifted in the Wizard of Oz and the Wizard revealed to be ‘’an ordinary conman from Omaha who has been using elaborate magic tricks and props to make himself seem “great and powerful”’’ 

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Lets finish off with the markets.
World Of Finance


Lets finish off with the markets.


Lets finish off with the markets.
The Euro and GBP are at the cliff edge. 
May 2 Currency puzzles I AM EXPECTING THE DOLLAR INDEX TO RALLY TOWARDS 110.00 BECAUSE WE HAVE UNDERGONE A REGIME CHANGE
The FAO Food Price Index (FFPI) which averaged 140.9 points in July 2022, down 13.3 points (8.6 percent) from June, marking the fourth consecutive monthly decline. @vtchakarova

https://twitter.com/vtchakarova/status/1563477948753408004?s=20&t=PfIPT-eTFP5jNDcKtF57IQ
Is poised to rally sharply higher.
One of the preeminent Thinkers today is @CreditSuisse's Zoltan Pozsar and he said 
The policymakers to follow are no longer central bankers, but heads of state at the pinnacle of power who aren’t known for the transparency of their thinking – especially not when at war. @CreditSuisse Zoltan Pozsar
https://bit.ly/3SCBdBz

I have no faith in those at  the pinnacle of power. None. So I expect more babble and a doubling down.

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Sheep spend their entire lives being afraid of the wolf, but end up eaten by the shepherd. Fabio Vighi
Law & Politics



Sheep spend their entire lives being afraid of the wolf, but end up eaten by the shepherd. Fabio Vighi

The sacrifice of a sheep (1997) Kourush. Daghestan. RUSSIA Thomas Dworzak @fatalstrategies


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A truly pivotal figure on the world stage. Simultaneously revered & reviled. Gorbachev. I pushed hard to get him to come to the woods to photograph him as a solitary figure, isolated by history, which he indeed was. @JoeMcNallyPhoto
Law & Politics

A truly pivotal figure on the world stage. Simultaneously revered & reviled. Gorbachev. I had made studio images of him in his Moscow office, but I pushed hard to get him to come to the woods to photograph him as a solitary figure, isolated by history, which he indeed was.

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Dead of Winter @DoombergT
Law & Politics


Dead of Winter @DoombergT 


“There cannot be a crisis next week. My schedule is already full.” – Henry Kissinger
In the United Kingdom, a grassroots protest movement has broken out in response to the ongoing energy crisis. 

With the bill from its failed national policies coming due, ordinary citizens are organizing campaigns to ensure they are not the ones left holding the bag. 

The mission of Don’t Pay UK is to gather at least one million commitments from Her Majesty’s loyal subjects to simply stop paying their energy bills as of October 1, 2022. 

At the time of this writing, Don’t Pay UK has passed 130,000 signatures. We expect that number to grow.
In reading a recent profile of the movement by Euronews Green, we were struck by the framing of the crisis by some of the movement’s organizers. 

This quote from the piece and the photo we have reproduced below caught our attention (emphasis added throughout):
“Lewis Ford, an organiser from Hull, agrees the movement is ‘a lot about solidarity’, especially for those forced to choose between heating their home and feeding their family.
‘We’re already talking about the idea of setting up warm banks, which is an absolutely preposterous idea,’ the 31-year-old IT consultant tells Euronews Green. 

‘We're one of the richest nations. So, it’s not like there’s no money, it’s the fact that the money is being kept in one space.’”

Sadly for Mr. Ford and the well-intended but totally naïve young woman holding out hope that the unicorn concept of “cheaper cleaner greener” energy is actually a thing, they are both victims of insidious propaganda. 

As reality will soon demonstrate, if a country can’t afford to keep its citizens warm during the winter, then that country is poor, not rich. 

And if the proposed solution to this crisis is to double down on the same crazy policies that caused it in the first place, then we should expect the problem to get worse, not better.

As longtime readers of Doomberg will know, we’ve been fascinated by the European energy situation for the better part of the past year, long before the true potential for a crisis was considered acceptable mainstream thought. 

In re-reading a piece we wrote last October called “Putin’s Fools Rush In,” we correctly predicted who held the real power in the developing conflict. 

We also badly overestimated the willingness of Western political leaders to recognize reality. Here are two quotes revealing the miscalculation:
“The prize Putin will soon collect is the inevitable go-ahead by Germany to begin operating the Nord Stream 2 pipeline, an act that will decisively and irreversibly conclude a years-long struggle between the United States and Russia in Putin’s favor.”
“Energy is life. Those projects will get developed. The geopolitical power vacuum we are creating will get filled. We might not be serious, but our enemies are ruthlessly so. They raise a toast to our self-inflicted demise.”
In hindsight, our expectation that Western leaders would awaken to the laws of physics was terribly mistaken. Instead, they have behaved as though they have leverage over Putin, not the other way around. 

Despite already skyrocketing energy prices, Nord Stream 2 was canceled, adding further strain to the EU’s depleting energy options. 

Emboldened by the cards handed to him by his geopolitical opponents, Putin invaded Ukraine. 

The West’s response – attempting to sanction Putin’s energy from global markets – was quite literally the dumbest option available, akin to sawing off your own hand in the middle of a boxing match.
In the past week, the market for European electricity broke, begging the question of exactly who is being sanctioned by whom. 

Forward-year prices for baseload power in Germany skyrocketed to over €1,000 per MWh before crashing by more than a third a day later. The same contract was selling for €45 per MWh less than two years ago. 

The imminent crisis is now undeniably laid bare for all to see

How will Europe navigate the upcoming winter? Will logic, sanity, and genuine leadership take hold, or will the same fools who rushed into this mess double down on their foolishness?

Having learned from our mistakes, we now propose Doomberg’s Law of Antilogic™, under which the current slate of Western leaders can be counted on to select the worst possible path forward at every critical junction. 

Applying this law to the current set of options and recent news flow makes for some sobering analysis. Let’s dig in.

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One of the preeminent Thinkers today is @CreditSuisse's Zoltan Pozsar and he said
Law & Politics


One of the preeminent Thinkers today is @CreditSuisse's Zoltan Pozsar and he said 



The policymakers to follow are no longer central bankers, but heads of state at the pinnacle of power who aren’t known for the transparency of their thinking – especially not when at war. @CreditSuisse Zoltan Pozsar
I have no faith in those at  the pinnacle of power. None. So I expect more babble and a doubling down.


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“You know, we can play chess, too,” Singh said. “It was important for us to show that the fortress could come crumbling down.”
Africa


“You know, we can play chess, too,” Singh said. “It was important for us to show that the fortress could come crumbling down.”

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24 August 2022 : in Germany, $2 trillion of value added depends on $20 billion of gas from Russia... War and Industrial Policy @CreditSuisse Zoltan Pozsar
Law & Politics



: in Germany, $2 trillion of value added depends on $20 billion of gas from Russia...

...that’s 100-times leverage more than Lehman’s.

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JAN-2022 Russia has largely triangulated Europe. The Gas dependency is real
Law & Politics

Our Western Economies are like a bonfire of turbo financialised QE, that the violence of the geoeconomic boomerang is going to be unprecedented. 
https://bit.ly/3cuibgD

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China revealing its plan for Taiwan invasion, island's foreign minister says @dwnews @WilliamYang120
Law & Politics


China revealing its plan for Taiwan invasion, island's foreign minister says @dwnews @WilliamYang120

As countries around the world grow increasingly concerned about the tension across the Taiwan Strait, Taiwan's Foreign Minister Joseph Wu has said China was revealing its strategies for a future invasion of Taiwan. 

He warned that Beijing's attempt to change the status quo across the Taiwan Strait could be "destabilizing, provocative and very dangerous."
"In the first part of August, China conducted missile tests, large-scale air and sea exercises, cyberattacks, disinformation campaigns, and economic coercion against Taiwan.  If you put all these [moves together], it is part of their playbook for the future invasion of Taiwan," Wu said in an exclusive interview with DW.

"The situation is still very tense and China is trying to destroy the status quo or at least the symbol of the status quo, which is the median line of the Taiwan Strait. 

The status quo across the Taiwan Strait has been seen as the interest of all parties concerned in this area, or globally. When China is trying to destroy the status quo, it's not in the interest of us or the international community," he said.
Since the controversial trip to Taiwan by US House Speaker Nancy Pelosi in early August, China has escalated its military threats against the democratic island. 

It staged a seven-day military exercise surrounding Taiwan and repeatedly dispatched military aircraft as well as naval vessels to cross the median line of the Taiwan Strait, an unofficial demarcation between China and Taiwan that the former does not recognize.
Wu said China was trying to use Pelosi's visit as a pretext to justify its military threats against Taiwan, but said  Taiwan wouldn't bow down to the increasing pressure from Beijing.
"What I would say is that Speaker Pelosi's visit to Taiwan is a morale boost for the Taiwanese people. Taiwan has been facing the threat from China all this time, but the Chinese military threat won't stop Taiwan from making more friends. It also will not stop international friends to come to Taiwan and show their support to us."
'China's authoritarian expansion won't stop with Taiwan'
Since the war broke out in Ukraine in February, the international community has been drawing some parallels between the Russian invasion of Ukraine and a potential Chinese invasion of Taiwan.
Wu said that despite coming under attack from Russia, Ukrainians had displayed tremendous bravery that inspired many Taiwanese people.
Wu told DW that Taiwanese people have been inspired by the courage of Ukrainians amid Russia's invasion
"[The bravery the Ukrainians have displayed] is inspirational to the Taiwanese people, because we understand that the Chinese can also do the same thing to Taiwan. By that time, we want to show to the international community that we are just about the same degree of bravery in fighting for our country and our democratic way of life," he told DW.
Wu added that since China imposed the National Security Law on Hong Kong more than two years ago, which has fundamentally transformed civil society in the former British colony, the international community has been talking about Taiwan as the next target of China's expansion. 

"Is Taiwan going to be the last target of the Chinese authoritarian expansion? I would say no," Wu said.
"China claims the East China Sea and they have been conducting military exercises or sending their ships to the disputed water. They have also claimed the South China Sea, and the daily patrol of the South China Sea either by their bombers or by their warships is so frequent these days. If we don't stop it, the Chinese government is going to sign more security agreements with more Pacific countries," he added.
In the face of heightened tension across the Taiwan Strait, Taiwan has announced a record increase in its defense budget for 2023, bringing the island's annual defense spending to $19.41 billion (around €19.35 billion), a 13.9% year-on-year increase. 

Wu said Taiwan's defense budget increase had been steady and the island was also closely working with partners like the United States to refine its defense strategies and enhance its defense capabilities.
"Other than increasing our military budget, we also conducted the reform of our military strategy. We are also discussing with the US about how we can best approach the strategy of asymmetric warfare," he told DW

"We also have the special budget that is used for items like missiles and jet planes, and the government is determined to increase our military budget."
At a time of increasing uncertainty in the region, many people wonder whether the US would come to Taiwan's defense if China ever launched a military invasion. 

In May, President Joe Biden said the US would intervene militarily if China ever attacked Taiwan

However, the public comments were swiftly walked back by the White House, which emphasized that Washington's official policies toward Taiwan had not changed.
While Biden's comments created confusion about Washington's stance on the issue of Taiwan, Wu said Taipei knows clearly that the responsibility of defending the island lies with the Taiwanese people and that the US is committed to ensuring Taiwan has the capabilities to protect itself through supplying weapons.
"We don't doubt the US commitment to Taiwan. It's been very clear. The defense of Taiwan is our own responsibility. If we are not committed to our own defense, we don't have the right to ask others to sacrifice," he explained.
Wu pointed to the recent example of two US naval vessels sailing through the Taiwan Strait as proof of Washington's commitment to stability in the region

"This is the way that the US is showing its presence in this region. By doing that, the US is showing its commitment to peace and stability in this region," he said.
Taiwanese opposition chastise government for risky approach
Despite the warming ties between Taiwan and the US, opposition leaders in Taiwan have criticize the current government for failing to maintain dialogue with China, saying the lack of communication with Beijing is putting Taiwan in a dangerous situation.
"Their policy is no contact, no communication, and no dialogue," Eric Chu, chairman of Taiwan's largest opposition party Kuomintang, told DW. 

"It's totally putting Taiwan into dangerous situations. If our government is a responsible one, [they should] still maintain the dialogue with China."
Wu said while China is Taiwan's top trading partner, it is Taiwan's "only source of threat."
"The Taiwanese government has been open to dialogue with China. The president says that and the government officials have been repeating that," he said. 

"As long as China is willing to discuss with Taiwan without any preconditions, Taiwan will be very forthcoming in engaging in dialogue with China."
"When China is threatening Taiwan to such a degree, we have to look around and see who else can provide Taiwan with support. We see the United States and we see other democracies. This is what we can count on," he added.
As the question of Taiwan's status becomes ever more imminent, Wu reiterated that the current government is committed to maintaining the status quo, as he believed that will serve the best interests of all parties concerned. 

"The status quo is that the Republic of China Taiwan and the People's Republic of China have no jurisdiction over each other," he told DW.
"The status quo is that Taiwan is already a democracy and that Taiwanese people have a say over Taiwan's future. That's the policy we are pursuing," Wu said.

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Strategic context: It's all about the maritime century. In the broadest sense, whether it's the Black Sea or the Taiwan Strait, the key strategic link is between the sea as a space for communication and manoeuvre @alessionaval
Law & Politics

Strategic context: It's all about the maritime century. In the broadest sense, whether it's the Black Sea or the Taiwan Strait, the key strategic link is between the sea as a space for communication and manoeuvre and either can be leverage for political gains:

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Think about the Black Sea and Taiwan: blockade as an instrument of signalling and coercion. Whether as economic coercion/strangulation, or to isolate the target from the global economic order @alessionaval
Law & Politics


Think about the Black Sea and Taiwan: blockade as an instrument of signalling and coercion. Whether as economic coercion/strangulation, or to isolate the target from the global economic order - This is central to contemporary strategy. 

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23-AUG-2021 :: Xi Jinping is on a winning streak ever since he started salami slicing his then adversary President Obama.
Law & Politics


23-AUG-2021 :: Xi Jinping is on a winning streak ever since he started salami slicing his then adversary President Obama.



It is inevitable he will roll the dice on Taiwan 

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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



@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



Donald Rumsfeld Thesis of the US need to be prepared to fight in two different theatres simultaneously is set to be tested  Taiwan Ukraine




1-4-2-1


1-4-2-1. The first 1 refers to defending what has since come to be called the homeland. 

The 4 refers to deterring hostilities in four key regions of the world. 

The 2 means the U.S. armed forces must have the strength to win swiftly in two near-simultaneous conflicts in those regions. 

The final 1 means that we must win one of those conflicts “decisively,” toppling the enemy’s regime.




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China might further move to reject passage of foreign naval ships through the strait without its permission. @Reuters
Law & Politics


China might further move to reject passage of foreign naval ships through the strait without its permission. @Reuters     




“After the new military normal status has been consolidated, then the risk of collision will increase if foreign naval ships insist on the rights of navigation and freedom,” he said.
U.S. warships and those from allied nations such as Britain and Canada have routinely sailed through the strait in recent years, including two U.S. Navy warships last week.

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Just as it appeared things couldn’t get worse, geopolitical tensions are back. The US just announced that computer chip sales to China and Russia will be restricted. @KobeissiLetter
Law & Politics


Just as it appeared things couldn’t get worse, geopolitical tensions are back. The US just announced that computer chip sales to China and Russia will be restricted. @KobeissiLetter



Once this happens, inflation is set to soar as supply chain issues worsen.
We are on the verge of a depression.

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Third, the message from China’s temporary blockade of Taiwan was clear – chips are useful when they can be shipped, not when stuck due to a blockade: War and Industrial Policy @CreditSuisse Zoltan Pozsar
Law & Politics


How can the U.S. control its lowflation/QE-based economic destiny when the emergence of a multipolar world order is fracturing global supply chains, which frustrates its ability to obtain chips for missiles to defend the existing world order?
Chips are like soft drinks: Coca-Cola and Pepsi are both fizzy drinks made to quench your thirst, and similarly, (most) chips are chips whether they were made by TSMC or SMIC, and Russian missiles can fly perfectly fine with either of them. 
Like energy flows, chip flows were also re-drawn by the war. Re-drawn. Not blocked or eliminated: Russian piped natural gas was replaced with U.S. LNG for continental Europe, Taiwanese, South Korean, and Japanese chips with Chinese chips for Russia.

Consider chips in a military context: China’s recent blockade of Taiwan and South Korea’s “strategic ambiguity” means that “chips from our backyard, your problem” is a clear and present danger for the U.S. and the broader West.

For the current world order and its trade arrangements and network of global supply chains to survive the challenge, the challenge must be squashed quickly and decisively, in the spirit of the Powell Doctrine. 

But Ukraine and Taiwan aren’t Kuwait, Russia and China aren’t Iraq, and Top Gun 2 isn’t the same movie as Top Gun...

the U.S. “buys 70% of its most sophisticated chips from Taiwan. Those are the chips in military equipment. There’s [about] 250 chips in a Javelin launching system. You want to be buying all that from Taiwan? That’s not secure. 

Pass the bill, Congress, pass CHIPS and let’s get to the business of making those chips in the U.S. to secure our future”. 

Either way, you care, especially if you are a bond house or if you depend on fixed income. These are the scary times when the “euthanasia of the rentier” is a risk

To ensure that the West wins the economic war – to overcome the risks posed by “our commodities, your problem”; “chips from our backyard, your problem”; and “our straits, your problem” – the West will have to pour trillions into four types of projects starting “yesterday”:
(1) re-arm (to defend the world order) (2) re-shore (to get around blockades) (3) re-stock and invest (commodities) (4) re-wire the grid (energy transition)

Friend-shoring won’t work, as stuff from friends will have to sail through straits, and what’s the point of friend-shoring if straits can be subject to blockades?

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Currency Markets at a Glance WSJ
World Currencies

Currency Markets at a Glance WSJ

Euro 0.996700
Dollar Index 109.566
Japan Yen 140.315
Swiss Franc 0.98083
Pound 1.154075
Aussie 0.678720
India Rupee 79.77505
South Korea Won 1363.735
Brazil Real 5.2423327 
Egypt Pound 19.229300 
South Africa Rand 17.28034

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Household incomes are on course to fall by 5% this year, and by 6% next year. This two year income fall – equivalent to £3,000 for the typical household – would be the deepest living standards squeeze in a century. @resfoundation
World Of Finance

Without further significant interventions from Government,  household incomes are on course to fall by 5% this year, and by 6% next year. This stark two year income fall – equivalent to £3,000 for the typical household – would be the deepest living standards squeeze in a century.

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Jul 3 One can create inorganic cascade like price moves in the derivatives market and thereby control the physical commodity.
Commodities


Jul 3 One can create inorganic cascade like price moves in the derivatives market and thereby control the physical commodity. 

The challenge is where the Supply/Demand balance is precarious and a small adjustment [reduce Supply or increase Demand] tips the situation into disequilibrium. 
The Tail will no longer wag the Dog and the Dog will simply run amok.

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Russia will not supply oil and oil products to those countries that support the price cap - Deputy Prime Minister Novak @DagnyTaggart369
Commodities


Russia will not supply oil and oil products to those countries that support the price cap - Deputy Prime Minister Novak @DagnyTaggart369



"The idea of capping the price of Russian oil is completely absurd, it will destabilize the industry, and consumers in the EU, the USA will pay"

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As the Federal Reserve hikes interest rates - emerging market credit stress rises with a strong dollar - but have NO fear — the IMF is there to clean up the mess: @Convertbond
Frontier Markets


As the Federal Reserve hikes interest rates - emerging market credit stress rises with a strong dollar - but have NO fear — the IMF is there to clean up the mess: @Convertbond



IMF BOARD APPROVES $1.3 BILLION FACILITY FOR ZAMBIA, Chile $18B yesterday.

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Pakistan: The IMF has approved $1.1b loan- deal extended to Jun 2023 - bailout package raised to $6.5b @ZiadMDaoud
Frontier Markets


Pakistan: The IMF has approved $1.1b loan- deal extended to Jun 2023 - bailout package raised to $6.5b @ZiadMDaoud


The rupee is the best-performing currency in emerging markets in August 

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@IMFNews Staff Reaches Staff-Level Agreement on an Extended Fund Facility Arrangement with Sri Lanka
Frontier Markets


@IMFNews  Staff Reaches Staff-Level Agreement on an Extended Fund Facility Arrangement with Sri Lanka


IMF staff and the Sri Lankan authorities have reached a staff-level agreement to support Sri Lanka's economic policies with a 48-month arrangement under the Extended Fund Facility (EFF) of about US$2.9 billion.

 The agreement is subject to the approval by IMF management and the Executive Board in the period ahead, contingent on the implementation by the authorities of prior actions, and on receiving financing assurances from Sri Lanka’s official creditors and making a good faith effort to reach a collaborative agreement with private creditors. 

Debt relief from Sri Lanka’s creditors and additional financing from multilateral partners will be required to help ensure debt sustainability and close financing gaps.
“Sri Lanka has been facing an acute crisis. Vulnerabilities have grown owing to inadequate external buffers and an unsustainable public debt dynamic. 

The April debt moratorium led to Sri Lanka defaulting on its external obligations, and a critically low level of foreign reserves has hampered the import of essential goods, including fuel, further impeding economic activity. 

The economy is expected to contract by 8.7 percent in 2022 and inflation recently exceeded 60 percent. The impact has been disproportionately borne by the poor and vulnerable'' 

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@IMFNews Executive Board Approves New Extended Credit Facility (ECF) Arrangement for Zambia
Africa


@IMFNews Executive Board Approves New Extended Credit Facility (ECF) Arrangement for Zambia 


The Executive Board of the International Monetary Fund (IMF) approved a 38-month arrangement under the Extended Credit Facility (ECF) in an amount equivalent to SDR 978.2 million (around US$1.3 billion, or 100 percent of quota). 

Board approval will enable immediate disbursement of USD 185mn

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Eritrea, Ethiopia Start Tigray Offensive, Dissident Group Says @business
Africa


Eritrea, Ethiopia Start Tigray Offensive, Dissident Group Says @business 


Eritrean and Ethiopian forces began an offensive in four areas in Ethiopia’s northern Tigray region, a senior member of the dissident Tigray People’s Liberation Front said.
The attacks started early on Thursday morning in northwestern Tigray, Getachew Reda said on Twitter. 

Eritrea’s information ministry and Ethiopian Prime Minister Abiy Ahmed’s spokeswoman, Billene Seyoum, didn’t immediately respond to requests for comment sent by text message and email respectively.

Ethiopia and Eritrea are “coordinating their efforts to turn this into a regional conflagration,” Getachew said. “We are ready to defend ourselves.”

Eritrea joining the conflict would signal an escalation in the conflict in Tigray, a week after the eruption of clashes that ended a five-month humanitarian cease-fire. 

Last week, Ethiopia’s air force said it shot down a plane ferrying weapons that crossed the border from neighboring Sudan, whose government has been at odds with Abiy’s administration over Ethiopia’s construction of a massive hydropower dam.
The resumption of fighting will hamper efforts by Ethiopia’s government to improve relations with international financiers, as it awaits an International Monetary Fund loan amid efforts to revamp its debt. 

Yields on Ethiopia’s $1 billion of Eurobonds due in 2024 have surged more than 500 basis since the conflict resumed on Aug. 24. The bonds traded at 38.04% by 08:50 a.m. in London on Thursday.

Eritrea is a long time foe of the TPLF, which effectively ruled Ethiopia from 1991 until 2018. 

The two nations went to war in 1998 over a border dispute. 

That conflict officially ended in 2018, when Abiy came to office and signed a peace deal with Eritrea, and won the Nobel Peace Prize as a result. Eritrean President Isaias Afwerki, then backed Ethiopia when Abiy ordered an incursion into Tigray after TPLF forces attacked a federal army base.

The US on Thursday called for an immediate end to the latest hostilities.

“We remain deeply concerned at the resumption of fighting and the lives that it puts at risk,” Secretary of State Antony Blinken said in a statement.
Getachew said heavy artillery is being used around Shiraro town close to Eritrea’s border. 

The area flanks Western Tigray, a flat swathe of fertile farmland bordering Sudan that was seized by forces from Ethiopia’s Amhara region and Eritrea soon after the civil war began in November 2020.
Tigray forces have insisted Western Tigray be given back to the region before peace talks can commence with Abiy’s government. 

Taking control of the town of Humera on the border with Sudan is also considered highly strategic by the Tigrayans because it can open up supply corridors and allows them to potentially launch their own offensive on Eritrea.

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The falcon cannot hear the falconer;
Africa


The falcon cannot hear the falconer;


Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere The ceremony of innocence is drowned;
The best lack all conviction, while the worst Are full of passionate intensity.

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GCC support to Egypt @ZiadMDaoud
Africa


GCC support to Egypt @ZiadMDaoud



Long-term deposits = $15b, from:
- UAE = $5.7b
- Saudi = $5.3b
- Kuwait = $4n

Short-term deposits = $13b, from:
- UAE = $5b
- Saudi = $5b
- Qatar = $3b

Context:
Total international reserves = $33b

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20 JAN 20 :: The Intrusion of Middle Powers
Africa


20 JAN 20 ::  The Intrusion of Middle Powers


 And [how the] U.A.E. approached Sisi and outlined the terms of their financial support before Morsi’s overthrow.
“I think there’s every reason to believe he staged a coup,” I was told by one former diplomat. “For a tiny country in the Persian Gulf to overthrow the ruler of Egypt and put their guy in, that’s a big achievement.”

The main Theatre for Proxy operations in Libya. Gaddafi charac- terised Libya as a Cork and he said to Tony Blair that if he was toppled Libya and Africa would be uncorked. It was a prescient prediction.

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Lhornpublishers Longhorn Kenya Ltd reports FY 22 Profit after tax 39.918m +434%
N.S.E Equities - Industrial & Allied


Lhornpublishers Longhorn Kenya Ltd reports FY 22 Profit after tax 39.918m +434%


Closing Price:           3.76

Total Shares Issued:          369940476.00
Market Capitalization:        1,390,976,190
EPS:             0.113
PE:                 188.000



.@Lhornpublishers reports Full Year results through 30th June 2022 versus FY results through 30th June 2021

FY 22 Total Assets 2.685167b versus 2.877729b

FY 22 Pre-Publishing costs 861.924m versus 802.370m

FY 22 Trade and other receivables 487.184m versus 873.136m

FY 22 Inventories 748.697m versus 684.516m

FY 22 Cash and bank balances 160.414m versus 54.018m

FY 22 Other assets 426.948m versus 463.689m

FY 22 Borrowings 979.999m versus 1.194154b

FY 22 Trade and other payables 922.297m versus 942.654m

FY 22 Total liabilities 1.902296b versus 2.136808b

FY 22 Revenue and other income 1.741109b versus 1.246949b

FY 22 Cost of sales [1.085514b] versus [746.501m]

FY 22 Gross profit 651.595m versus 500.448m

FY 22 Operating expenses [443.654m] versus [299.427m]

FY 22 Finance costs [133.339m] versus [183.247m]

FY 22 Profit before tax 74.602m versus 17.774m

FY 22 Profit after tax 39.918m versus 7.475m +434%

FY 22 Total comprehensive income 41.950m versus 6.156m

FY 22 Cash and cash equivalents at end of year 160.414m versus 36.866m 



COMMENTARY ON THE RESULTS
Overview:
Across our various markets, we have seen a gradual improvement in the trading environment which supported the overall positive performance of the Group.
In Kenya, the Government’s support for uninterrupted learning in schools, the new school calendar year in July 2021 and a gradual economic recovery drove the recovery of sales in our largest market.
In Uganda, schools reopened in January 2022 since March 2020. 

We have since enhanced our market penetration activities resulting in the highest revenue level in our history of operating in that country. 

We supplied books to over 23,000 public primary and 5,500 secondary schools across the country which further established our brand in the market.
Our ongoing geographical diversification across Africa continues to impact positively on our topline and will remain a key driver of revenue growth. 

In the year under review, we saw increased activity across our other markets relative to the previous year. We are positive that this trend will be sustained.
Financial Highlights:
Revenue for the year recovered robustly with an increase of Kshs 494 million, representing a 40% growth, compared to the previous year. 

The increase was primarily driven by expansion into new geographical markets and increased sales following the resumption of learning in schools. 

The growth trajectory is expected to continue and is sustainable given the investments made to develop new markets under the new curricula.
The increase in operating expenses was mainly attributable to the reinstatement of staff benefits that had been reviewed as a response to the Covid-19 pandemic and increase in selling and distribution costs due to increased sales and marketing activities in the year.
Finance costs reduced by 27% from the prior year on account of the reduction in borrowings, in light of the strong performance in operational cash generation. Cashflows from operations amounted to Kshs 566 million
in the year, reflective of increased collections from customers as our markets recover.
Against the above background, profit after tax improved to Kshs 40 million compared to Kshs 7 million for the prior year, an increase of 434%.
Outlook:
Digital business – We continue to make significant investments in our digital business, with a pipeline of products in the offing. 

We see this segment of the business as a key driver of our performance going forward. 

We are currently at the fundraising stage for our digital portfolio. 

This will allow our current and new business to scale in partnership with like-minded venture builders.
Product portfolio – Our approved products continue to increase across the Group. 

The additional approvals for titles secured in our markets in the year included CBC Grade 6 and 7, set books and complementary titles in Kenya, 51 secondary titles in Uganda, 9 titles in the Democratic Republic of Congo (DRC) and the revised Kamusi Kuu in Tanzania. 

We are looking forward to additional approvals in all markets in the next financial year. 

Our successful market entry to DRC followed by Ghana adds significant coverage to our existing markets. 

This will position the Group as the main African platform to access over 70 million learners across the continent. 

Our digital solutions will further enable us to scale the range of solutions provided in the market. 

The recent addition of new business segments (Longhorn Language Services, Longhorn Publishing Services and international titles distribution) will broaden our reach outside the textbook business. 

It also creates a network of interdependent businesses that leverage on the existing value chain. 

This integration of several solutions across Africa is the key to unlocking the full potential of our Group. We are well positioned to serve our customers and register significant growth moving forward.

Conclusions 

A strong improvement 

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