Zimbabwe Stock Market Crashes 35% As "Euphoric" Nation Awaits New Leader

Despite reported "euphoria" in the nation as former Mugabe deputy Emmerson Mnanagwa was expectd to arrive and be sworn in on Friday, Zimbabwe stocks fell another 10% today, having now erased more than third of the country"s market cap in the last few days.

Several hundred people gathered in anticipation of his arrival. Some carried signs with images of him, suggesting a certain level of organization behind the jubilant turnout.

Signs read "Welcome back, our hero" and "True to your word, you"re back. Welcome."

As The Washington Post reports, the morning after ecstatic celebrations over the resignation of the long-ruling President Robert Mugabe, the people of Zimbabwe awaited Wednesday the arrival of his former vice president, expected now to become the interim leader.

Emmerson Mnangagwa, believed to be in South Africa, was expected to arrive in the afternoon and then be sworn in Friday as the country"s second president since independence from Britain in 1980.

 

Mnangagwa is a longtime Mugabe ally, nicknamed "the crocodile" for his reputation for shrewd but often brutal tactics as the president"s enforcer. But when the 93-year-old Mugabe fired him earlier this month — likely to ensure the succession of Mugabe"s unpopular wife — the military moved in.

 

Even as the sense of euphoria in Zimbabwe lingers, the question looming over everyone is whether Mnangagwa will be an improvement over Mugabe"s nearly four decades of misrule that impoverished the once affluent country.

And judging by the stock market"s dismal reaction, investors are more anxious than the average Zimbwean...

Source: African-Markets.com

However, not every Zimbabwean is happy, as Blkoomberg points out, Zimbabwe Lawyers for Human Rights “notes with apprehension and concern’’ reports of arrests during military intervention that saw President Robert Mugabe resign to make way for Emmerson Mnangagwa, Harare-based human rights watchdog says in emailed statement.

ZLHR urges the military to refrain from torture, or abuse of pre-trial prisoners’ rights, adding that the military should “prevent the occurrence of any enforced disappearances or in-communicado detention."

So far in the current political turmoil Mnangagwa has used inclusive language, saying in a statement hours before Mugabe"s resignation that all Zimbabweans should work together to advance their nation.

"Never should the nation be held at ransom by one person ever again, whose desire is to die in office at whatever cost to the nation," Mnangagwa said.

We shall see.

Zimbabwe President Robert Mugabe Resigns

Zimbabwe’s Speaker of Parliament Jacob Mudenda had barely finished reading the rules and regulations of how impeachment proceedings would proceed against President Robert Mugabe when the 93-year-old leader and former revolutionary surprised his colleagues by officially resigning the presidency – something he had been reluctant to do even after the military placed him under house arrest last week.

Both Reuters and the Associated Press confirmed that Mugabe had resigned, citing an announcement made by Mudenda.

 

BREAKING: President Robert Mugabe has resigned, Speaker of Parliament confirms

— Zim Media Review (@ZimMediaReview) November 21, 2017

 

"I Robert Gabriel Mugabe in terms of section 96 of the constitution of Zimbabwe hereby formally tender my resignation... with immediate effect," said speaker Mudenda, reading Mugabe"s letter.

"My decision to resign was voluntary on my part."

Zimbabwe"s Parliament has erupted in cheers as the speaker announces the resignation of President Robert Mugabe. The speaker stopped impeachment proceedings to say they had received a letter from Mugabe with the resignation "with immediate effect." It is an extraordinary end for the world"s oldest head of state after 37 years in power.

Mugabe’s resignation came days after the Zimbabwe African National Union-Patriotic Front party fired him as its leader and ordered him to step down. In his place, Emmerson Mnangagwa, 75, who Mugabe dismissed as vice president earlier this month, will take over as interim leader and the leader of ZANU-PF, the country"s ruling party. Mnangawa will also be ZANU"s candidate in presidential elections next year, the party said.

 

Drama! Drama!

As The Speaker was presiding over the impeachment, Justice Minister Bonyongwe interrupted him, carrying a letter. Speaker Mudenda then asked MPs to excuse him. They grumbled.

But this was it. He announced the letter had come. Mugabe has resigned!

— Zim Media Review (@ZimMediaReview) November 21, 2017

 

Mugabe came to power in 1980 after Zimbabwe gained its independence from the UK. He was ousted earlier this month after he fired Mnangagwa and appointed his much-younger wife, Grace, 52, in his stead. Mugabe, it was widely believed, was positioning Grace to succeed him as ruler of Zimbabwe.

Once an shining example of economic progress, Zimbabwe"s economy began crumbling in the early 2000s as Mugabe seized land from white farmers and turned it over to friends of his government. The country"s currency experienced a hyperinflationary spiral that rendered the savings of millions of Zimbabweans worthless. The recent unrest has sent many Zimbabweans scrambling to buy bitcoin, which recently traded at $13,000 on Golix, the country"s primary bitcoin exchange. That"s a more than 50% premium over its global price. Bitcoin"s global price of around $8,000.

Mugabe baffled many of his countrymen on Monday when he refused to resign during a widely watched public address, insisting instead that he would lead the next Congress. In response, both opposition and Zanu-PF lawmakers said they would immediately begin impeachment proceedings.

The president furnished his resignation after only three cabinet ministers showed up for a cabinet meeting he called for Tuesday.

 

@ZimMediaReview
Me: How many ministers attended today"s cabinet meeting?
Zim "journalists" : ????
Me: hmm...#Zimbabwe pic.twitter.com/wUTdPjmpnG

— Thandekile Moyo (@Mamoxn) November 21, 2017

The BBC tweeted footage of Mudenda reading Mugabe"s resignation letter aloud:

Zimbabwe Stock Market Crashes - What Happens After Mugabe?

In the last two days, the Zimbabwe stock market has crashed almost 10% as a "not-military-coup" has ousted 93-year-old President Mugabe - the question is, what happens next?

Bloomberg reports that Zimbabwe President Robert Mugabe’s refusal to publicly resign is stalling plans by the military to swiftly install a transitional government after seizing power on Wednesday, two people familiar with the situation said.

That uncertainty is clearly showing up in Zimbabwe stocks...

The military wants Mugabe, who’s under house arrest, to agree to step aside so it can claim its action isn’t a coup and head off tension with the Southern African Development Community, which includes Zimbabwe and South Africa, the people said. The group previously intervened when the army took over in Lesotho.

However, as a reminder, Pedzisayi Ruhanya, the director of the Zimbabwe Democracy Institute, warns,

“Mugabe wants to die in office and is not interested in seeing his successor."

 

“He is not a student of democratic processes.”

Bloomberg goes on to note that the new rulers, headed by armed forces commander Constantino Chiwenga, plan to try and negotiate the establishment of a transitional government with the opposition until elections can be held to restore stability, the people said.

But first they want a deal with Mugabe, whose 37-year rule left an economy that has halved in size since 2000, a severe cash shortage that’s choking businesses and a collapse in government services.

The military has declined to comment on its plans.

“The military, or the people who are now in charge, obviously they have some respect for Mugabe -- he is someone who has led them for so many years,”Alex Magaisa, a Zimbabwean law lecturer who helped design the southern African nation’s 2013 constitution, said in a interview with Bloomberg Television in London.

 

“I think there is still some residual sympathy for him. They wouldn’t want to be seen to be mistreating him.”

The operation to take power had been planned for weeks but was accelerated after Mugabe fired his deputy Emmerson Mnangagwa, according to the people.

Many ordinary people simply hope that the authorities can improve daily life in Zimbabwe, where an estimated 95 percent of the workforce is jobless.The country doesn’t even have its own currency and relies mainly on the dollar.

“I hope and pray this takeover will bring lasting solutions for us,” said James Saunyama, as he collected his weekly allocation of $50 in coins from a bank in Harare.

 

“We’ve endured enough so this takeover must give us better and improved lifestyles going forward.”

The new rulers also want to repair relations with Western countries, who used to be among the biggest investors in the country, and international lenders, the people said.

They will seek investment from the more than 3 million people who left Zimbabwe because of the economic collapse including the white farmers driven off their land, the people said.

Mark Bohlund, Africa economist with Bloomberg Intelligence in London, expects Zimbabwe’s economic challenges to persist even if there is a power shift and the country adopts more orthodox economic policies.

“Expectations for quick progress toward receiving financial support and potential debt relief should be tempered,” Bohlund said.

 

“The huge challenges ahead and continued political uncertainty is likely to deter inward investment for many years to come.”

We leave it to Pedzisayi Ruhanya to sum things up...

“The chaos happening in Zimbabwe and ZANU-PF is what happens when the end of an authoritarian era approaches."

Military Coup Reportedly Under Way In Zimbabwe

Zimbabwe is on edge amid speculation that a military coup is in progress, with army tanks seen outside the capital a day after the army commander threatened to "step in" to calm political tensions over the president"s firing of his vice president. The Associated Press said it saw three tanks with several soldiers in a convoy on a road heading toward an army barracks just outside the capital, Harare, while Reuters reported that four tanks were seen heading toward the capital.

According to Reuters, two other tanks were seen parked beside the main road from Harare to Chinhoyi, about 20km from the city. Eyewitnesses also saw military vehicles blocking major roads outside the city.

BREAKING: Tanks and military vehicles are blocking the roads leading to Zimbabwe capital of Harare, reports of a possible standoff between the army and President Mugabe pic.twitter.com/7sX3ZsOD0Q

— News_Executive (@News_Executive) November 14, 2017

The alleged coup takes place one day after Zimbabwe"s army chief demanded a "stop" to the purge in President Robert Mugabe"s ruling Zanu-PF, following the sacking of vice president Emmerson Mnangagwa. Mnangagwa was well-supported by the Zimbabwean national forces. On Monday, Amry General Constantino Chiwenga told a media conference attended by at least 90 senior army officers at the army headquarters in Harare on Monday that: "The current purging which is clearly targeting members of the party with a liberation background must stop forthwith."

According to New Zimbabwe.com, Chiwenga recently returned from a trip in China to find Mnangagwa fired from government and expelled from Zanu-PF. The report said that the army had been seen to be backing Mnangagwa to succeed Mugabe, 93, but the nonagenarian"s wife Grace had emerged as a top contender. Mnangagwa was kicked out of both government and the ruling party last week following accusations that he was plotting to topple Mugabe from power. 

This prompted the army chief to accuse Zimbabwe"s ruling party of expelling senior officials who participated in the 1970s war against white-minority ruled Rhodesia, saying "counter revolutionaries" were plotting to destroy the party. This was the first time Zimbabwe"s military directly criticised the infighting in Zanu-PF and marked a rift between Mugabe and an institution that has been a key pillar of his power.

"The current purging and cleansing process in Zanu-PF which so far is targeting mostly members associated with our liberation history is a serious cause for concern for us in the defense forces," said Chiwenga, at a press conference, reading from his statement.

 

He then warned those "behind the current treacherous shenanigans that when it comes to matters of protecting our revolution, the military will not hesitate to step in. The current purging of which is clearly targeting members of the party with a liberation background must stop forthwith."

It appears that one day later, Chiwengae has made good on his threat, with tanks deployed around the capital. Local media also reported that heavily armed military personnel had sealed off state TV broadcaster ZBC.

#Zimbabwe We might see the fall of the old men #RobertMugabe pic.twitter.com/foaSF3lZ4K

— NAZEEM GROOTBOOM (@Unathi_007) November 14, 2017

As AP adds, while it is routine for tanks to move along that route, Tuesday"s timing heightens unease in this country that for the first time is seeing an open rift between the military and 93 -year-old President Robert Mugabe.

Meanwhile, reports on the ground from Zimbabwe suggest that a coup may indeed be taking place. A flurry of photos – shared by journalists across Twitter – show a fleet of the armoured vehicles making their way to the country’s capital.  The convoy has taken to the streets just a day after the head of the armed forces said he was prepared to “step in” to end a purge of supporters of ousted vice-president Emmerson Mnangagwa.

It seems like finally Zimbabwe"s military is beginning to have some sense,something that should have perhaps happened 20yrs ago.The culture of allowing leaders to turn countries into personal property should never be tolerated!!

— Cappy Gerald ™ (@CappyGerald) November 14, 2017

Tank movement in #harare #zimbabwe pic.twitter.com/SMZA34eU60

— IamDumbToo (@IamDumbToo) November 14, 2017

A journalist in Harare has told News24 that "it seems the army is angry". He says the situation is a bit "tense" in the capital.

Zimbabwe: Army chief calls for end to #Zanu-PF purges By SALLY NYAKANYANGA pic.twitter.com/0EkhF4hE29

— Francisco A.González (@FcoAGonzalez) November 14, 2017

Some on Twitter are saying that although a coup is almost never a good thing, it brings an end to Mugabe"s much despised regime.

Meanwhile, in a sign that events may turn violent, earlier on Tuesday, The Zimbabwean reported that Zimbabwe’s Zanu-PF youths said they were “prepared to die” in defence of President Mugabe’s government. In a statement on Tuesday, Zanu-PF’s secretary of the youth league Kudzai Chipanga said that Zanu-PF youths did not take lightly the military’s threats.

“We as Zanu-PF youth league are a lion which has awakened and found its voice, therefore we will not sit idly and fold our hands whilst cheap potshots and threats are made against Mugabe,” Chipanga said.

* * *

Here is Al Jazeera with a brief explainer of the political crisis in Zimbabwe that threatens to sweep Robert Mugabe from his post:

Zimbabwe is facing a political crisis with the ruling Zanu-PF party, as a very public showdown over who is likely to succeed President Robert Mugabe plays out. The current standoff is between the Youth faction, loyal to his wife, Grace Mugabe, and the former liberation fighters, loyal to Emmerson Mnangagwa, the vice president who was fired last week. Al Jazeera"s Hannah Hoexter explains.

Readers can track live updates from the alleged coup at the following live feed.

Make It Liquid, Please

By Chris at www.CapitalistExploits.at

Most of you know the story of Africa"s great jewel.

Zimbabwe, presided over by the charming, charismatic, democratically elected leader Robert Mugabe.

So great is the country that under his leadership it has reached dizzying heights. The highest inflation in Africa, the highest unemployment in Africa, and, of course, the highest rates of poverty, which on the dark continent is really quite something.

Think about it, your neighbouring nations are themselves doing such a sterling job of raping and pillaging the populace and destroying wealth even before its past incubation point that in order to beat them you"d be forced to work so hard you"d probably have to quit drinking on the job.

It was under this backdrop that in late 2009 I, together with a bunch of mining engineers from South Africa and some ex-military gents, sensed opportunity.

You see, Zim had been running a government program which released its white citizens of the cumbersome obligations of ownership of all sorts of assets - things like farms, factories, land, and mines. And THIS was what we were interested in - gold mines to be precise. Many, but not all, of these assets had landed up in the hands of Mugabe"s henchmen. Many "whities" with a strongly held desire to keep their heads attached to their shoulders while simultaneously being mad as hell realising that all they"d worked for was to go to some illiterate thug with a panga and an IQ of 70 essentially had two options.

A small number actually took to a scorched earth policy. They sold what they could and destroyed everything they"d worked for as they were unwilling to see it go to thieves.

Others went the legal route of transferring land titles to blacks. In doing so, they got to choose the new land owners and so typically handed the assets over to longtime loyal employees, farm managers, mine managers, and so forth. The assets, now in the hands of black Zimbabweans, were that much safer from roaming thugs targeting white owned assets. The previous owners (those who could) fled to wherever they could. Amazingly, even previously war torn Mozambique received an influx of white talent though many went to Europe or South Africa. Pretty much anywhere looked better. Some had no options (no foreign passports) and either died or still eek out a living in the country today.

What"s the Liquidity on an Asset No Sane Person Would Want?

That"s the question we asked ourselves... figuring it to be near zero.

As a white non-Zimbabwean citizen (actually white Zim citizens were and are in the same boat) you really didn"t want to "own" these assets. You wanted to control them but you sure as hell didn"t want to own them.

The black guys who ended up with the assets couldn"t quite figure this out, the mindset being that they now had gone from having few assets to owning massive operations which were only a few years prior worth tens or hundreds of millions of dollars. So they just wanted to cash in and sell them.

It"s worth mentioning that most of these poor guys had no financial acumen at all, and when we explained to them that we placed the assets in the liability column on the balance sheet (they needed to be maintained, which costs money) we drew blank stares. A balance sheet wasn"t something they knew too much about but when it sunk in that we believed the assets to be worthless unless we could go through an extraction of product, they realised that they"d have to go back to work (producing on a revenue share) they weren"t overjoyed. Visions of big houses, Land Cruisers, and holidays in Europe seemed further out of reach.

Those assets in Zimbabwe can"t be easily bought or sold due to Mugabe and his minions creating all sorts of headaches requiring copious bottles of Klipdrift (a South African brandy) and a certain amount of hard currency changing hands with "officials". That"s if they don"t just simply take what they want outright. The impact on liquidity of assets is typically like that of a safe being dropped on your guts. Oofff!

Now, this is where it gets interesting.

Liquidity should have been zero. After all, what white guy would want to buy something that could and probably would be stolen from under him within a few years, if not months, and could quite easily involve the removal of his head from his shoulders?

But It Wasn"t...

Enter some other gents going by the names of Ivan, Anatoly, and Vsevolod.

These guys descended on Zimbabwe in waves. Perhaps there was a flyer in Moscow. Our own "soldier of fortune" explained to us where these guys came from and even some of their history, which was fascinating to me since he knew so much from just watching them across a table at a restaurant.

Any dope could see they were well dressed thugs who could snap you in two without taking their attention off their lunch but it turns out that tattoos reveal a lot. Apparently when you leave the employ of the KGB or Spetznaz your employment options are somewhat limited. Mercenary work in 3rd world hell holes looks and pays a lot better than licking stamps at the post office and smiling at Babushkas.

Anyway, the Russkies, after enjoying the collapse of the Soviet Union had a template on how to deal with such opportunities. You roll into town, use overwhelming muscle, and secure assets, then strip them and sell them. Hey, it worked in the ex-USSR, so why not Zim?

Indeed, why not?

Ivan and his mates were working for whatever "brains" had employed them, and they actually just went in and paid cash for all sorts of stuff. No need for any limbs to get snapped. This, as it turns out, was an excellent example of a truly terrible idea, and Ivan and most of his buddies have since departed, their tails between their legs. A few still hold onto assets (because nobody will buy them) which they paid waaaay too much for and to which their particular "skillsets" are not well suited.

It became patently clear that these guys firstly had money to burn (presumably "acquired" by conducting other "business")and didn"t seem to have a plan as to what to do once they"d bought the new assets. Clearly they wanted to just sell them on, and in the beginning, many "Ivans" approached our group with this in mind. Perhaps not giving thought to why on earth we, for our part, would pay a premium price on an asset which would could just as easily have bought (and indeed passed on) ourselves.

The point here is that even though liquidity of the assets should have been rock bottom it wasn"t... yet.

There is a solution here to all of this which we found, though it still had liquidity issues. How do you go about creating value in such a setup? The ultimate answer I think lies in code. Yup, computer code.

Now, keep that story in mind because later this week, I"ll explain to you another weird thing that happened in Mugabe"s paradise. Both of these are important due to an entirely new technology that you"ve probably heard about but perhaps haven"t given much thought to.

- Chris

"Focus on the movement of liquidity… most people in the market are looking for earnings and conventional measures. It’s liquidity that moves markets." — Stanley Druckenmiller

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Geophysicists Say the Earth’s Magnetic Poles Could Be About to Flip

(ANTIMEDIA) Life on Earth would likely not exist without the geomagnetic field that encases the planet. The product of iron convection churning deep within the planet’s outer core, the magnetosphere creates a literal force field that prevents solar winds from breaking down our atmosphere and allowing radioactive particles to besiege the surface. It has functioned in perpetuity for over 3 billion years, but every few hundred thousand years or so, the poles flip, weakening the field and leaving the Earth vulnerable to charged particles. The last magnetic pole flip took place during the Stone Age, 780,000 years ago. New evidence suggests the next reversal may be close.

According to geophysicists, over the last 160 years the strength of the geomagnetic field has declined at an accelerating rate. The most salient example of this weakening is the South Atlantic Anomaly, the name given to a geographic expanse stretching from Zimbabwe to Chile, where the field has grown so weak that satellites are no longer protected from radiation. In 2012, SpaceX’s Dragon spacecraft experienced such extreme disturbance that it had to shut down and reboot.

Recent observatory and satellite data show that a magnetic pole reversal has already occurred beneath Southern Africa. If a compass were burrowed deep below the surface here and pointed north, it would register south.

Numerical simulations show circumstances like the South Atlantic Anomaly appearing just before pole reversals.

This evidence suggests to scientists that the next magnetic field reversal — which is long overdue — could be closer than expected, though the timeframe for that in geological terms is still in thousand-year increments. The poles flipping would not likely portend the apocalypse, but there would be significant global consequences.

According to two geophysicists familiar with the recent observations:

“Such a major change would affect our navigation systems, as well as the transmission of electricity. The spectacle of the northern lights might appear at different latitudes. And because more radiation would reach Earth’s surface under very low field strengths during a global reversal, it also might affect rates of cancer.”

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