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Post by mank on Dec 13, 2014 7:04:14 GMT 3
Amigo, there is a common saying from a me hood that I find perfected by governments when it comes to borrowing. It goes like this: "kaíndí kaarwa katirekaa kwaarwa." In Her Merjesty's lingo, "an ass that once dirrhoered doesn't cease." Once they start on borrowing, only a very painful outome will stop them. It doesn't end well, and it doesn't end when all is well. Once they discover borrowing, they fall into binge borrowing ... until it churns the belly enough for a bout of terrible cramping and vomiting.
But the global tendency is the least of what worries me about our all out venture into borrowing as a source of funds. The greatest of my concerns is that what we borrow for is not always worth investing in. But there, we have a mixed bag - i have no qualms with borrowing to finance infrastructure, for that is really worth it, if the infrasture projects are properly prioritized. We may not have borrowed much during the agonizing years of Nyayo, but we built lots of white elephants in that era. At least for Kibaki we have a few useful roads to brag about. The other concern is ofcourse the ease with which borrowed funds find their way into pockets of individuals in unfair pricing of projects and outright looting. Then there is what Githae talks about in this story ... we, taking up someone else's junk and paying for it in the name of borrowing. That's extreme, and it is not the first time we are hearing of it. I recall we once talked about sourcing of fax machines and typewriters from companies that apparently needed a fool to sell obsolete equipment to. Its a scam. That's disease the "kaíndí" or our good government contracted eons ago.
What about those riches of ours under the ground? The crude stuff? Are we still feeling rich? Watch out ... its a buggy buggy world out there in the oil economies.
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Post by jakaswanga on Dec 13, 2014 10:08:48 GMT 3
Amigo, there is a common saying from a me hood that I find perfected by governments when it comes to borrowing. It goes like this: " kaíndí kaarwa katirekaa kwaarwa." In Her Merjesty's lingo, " an ass that once dirrhoered doesn't cease." Once they start on borrowing, only a very painful outome will stop them. It doesn't end well, and it doesn't end when all is well. Once they discover borrowing, they fall into binge borrowing ... until it churns the belly enough for a bout of terrible cramping and vomiting. was that in red a mistaken automatic censor, but was from this innocent word ' diarrhoea', American, '' diarrhea'' Amigo Mank, www.theeastafrican.co.ke/news/Highs-and-lows-of-Kibaki-regime-economic-record/-/2558/1428960/-/2cal8xz/-/index.html You will bear with me Amigo, that I revisit this thread. May be you thought it was dead, and was complacent to let it so. Not with me bwana BiL! –--you know that machete I specially keep to chase down you economists with? I sheathe it sometimes, but within reach where I can unco.ck it with ease, you know, like those tense cowboy bars where they drink, but the other hand keeps on hovering around the holster, on the look out for a shoot out! So help me out here. When Kibaki and Raila took over, they initiated some grand infrastructural programs, of the roads and airports kind. The ones you can say we can boast of, and I do agree with you above. But even in this spending binge, this David-Mwiraria-led expansionist policy, and in spite of all the (it is our time to eat) scams we remember then –-which we will list later, the crook from Othayaa and his side-kick crook from a Nyanzaa royal family presided over a RELATIVE sharp decrease in Kenya's dependence on FOREIGN LOANS. We have seen a graph –-linked by you Man Mank I believe, where by 2011, the domestic share of the public debt overtakes the external as a% of GDP. Yet the crooked duo Raila&Kibaki, albeit many finance ministers later, were still racing on with their great infrastructurals unabated, –-not least of them the LAPSSET corridor which, amazingly in the plans, would be funded by something called a public/private joint venture, to top up the Chinese soft loan. Now the current finance cabinet secretary has a different read. He says: ''….. Domestic borrowing is not feasible. –--If we went the domestic way, it would probably take 100 years to get development in this country,” the minister said. (Rotich). (No sooner had the Uhuruto complex achieved ascendancy to state power, than private investors seem to have pulled out or, on another reading, became lackluster in enthusiasm, citing the corruption portfolio of the Kenyan government, and financial-centres hostility due to other reasons, may be to do with ICC. Furthermore, the infrastructural deals with the Chinese were revised and were now not only qualified as DELIBERATELY inflated at the Nairobi end, but also so opaque it became a dangerous risk for big private investment capital. To make it worse, for the case of the SGR, the projected locomotive speeds of barely 50km/hr are slower than a haulage trailer on a bad road! The Chinese themselves tightened the conditions of the loan, from soft to hard! –-Whether the SGR is a profit or not, we will repay the loan at a profit rate!)I too think debt is good. And I accept the preconditions you have set above, for this goodness to mature into reality. I think Rotich is not telling us what he is really funding! And why he lurches from one cash strap to the next. –- Mpigs salaries and perks, new multi-billion scams, devolution looting, and as small change, the CBA's negotiated by us teachers and doctors and nurses during the Kibaki-Raila era, and which the two crooks ignored totally until the death of their regime. Is the local pot really dry, or is it that the markets know if Uhuruto borrows locally, they will default and be forced into Fimbonomics, print worthless paper and hyperinflate. Foreign debtors, like we saw with the Anglo-leasing cash transfer, have other methods of coercion, and will extort foreign currency from Kenya one way or another. So the good old London School of Economics and Makerere don showed he knew a thing or two about healthy foreign- and domestic debt to GDP ratios, and the boosting of private FDI confidence –-even as the flight of John Githong'o should have been a crash! Now enter the doctor from Harvard's Kennedy School where they cook up these Fimbonomics of Quantitative Easing, teaching debt is sustainable forever Amen. No such thing as odious debts! From the university students unrests, one gets a hint the governement is neglecting the greatest infrastructural structure, brains.
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Post by mank on Dec 14, 2014 5:24:29 GMT 3
Amigo, there is a common saying from a me hood that I find perfected by governments when it comes to borrowing. It goes like this: " kaíndí kaarwa katirekaa kwaarwa." In Her Merjesty's lingo, " an ass that once dirrhoered doesn't cease." Once they start on borrowing, only a very painful outome will stop them. It doesn't end well, and it doesn't end when all is well. Once they discover borrowing, they fall into binge borrowing ... until it churns the belly enough for a bout of terrible cramping and vomiting. was that in red a mistaken automatic censor, but was from this innocent word ' diarrhoea', American, '' diarrhea'' Indeed! I get tired with the spell checkers and accept whatever they offer at times, or I may even erroneously correct their suggestion in the haste, as long as I don't think it loses the idea. But the global tendency is the least of what worries me about our all out venture into borrowing as a source of funds. The greatest of my concerns is that what we borrow for is not always worth investing in. But there, we have a mixed bag - i have no qualms with borrowing to finance infrastructure, for that is really worth it, if the infrasture projects are properly prioritized. We may not have borrowed much during the agonizing years of Nyayo, but we built lots of white elephants in that era. At least for Kibaki we have a few useful roads to brag about. The other concern is ofcourse the ease with which borrowed funds find their way into pockets of individuals in unfair pricing of projects and outright looting. Then there is what Githae talks about in this story ... we, taking up someone else's junk and paying for it in the name of borrowing. That's extreme, and it is not the first time we are hearing of it. I recall we once talked about sourcing of fax machines and typewriters from companies that apparently needed a fool to sell obsolete equipment to. Its a scam. That's disease the "kaíndí" or our good government contracted eons ago. What about those riches of ours under the ground? The crude stuff? Are we still feeling rich? Watch out ... its a buggy buggy world out there in the oil economies. Amigo Mank, www.theeastafrican.co.ke/news/Highs-and-lows-of-Kibaki-regime-economic-record/-/2558/1428960/-/2cal8xz/-/index.html You will bear with me Amigo, that I revisit this thread. May be you thought it was dead, and was complacent to let it so. Not with me bwana BiL! –--you know that machete I specially keep to chase down you economists with? I sheathe it sometimes, but within reach where I can unco.ck it with ease, you know, like those tense cowboy bars where they drink, but the other hand keeps on hovering around the holster, on the look out for a shoot out! So help me out here. When Kibaki and Raila took over, they initiated some grand infrastructural programs, of the roads and airports kind. The ones you can say we can boast of, and I do agree with you above. But even in this spending binge, this David-Mwiraria-led expansionist policy, and in spite of all the (it is our time to eat) scams we remember then –-which we will list later, the crook from Othayaa and his side-kick crook from a Nyanzaa royal family presided over a RELATIVE sharp decrease in Kenya's dependence on FOREIGN LOANS. We have seen a graph –-linked by you Man Mank I believe, where by 2011, the domestic share of the public debt overtakes the external as a% of GDP. Yet the crooked duo Raila&Kibaki, albeit many finance ministers later, were still racing on with their great infrastructurals unabated, –-not least of them the LAPSSET corridor which, amazingly in the plans, would be funded by something called a public/private joint venture, to top up the Chinese soft loan. Now the current finance cabinet secretary has a different read. He says: ''….. Domestic borrowing is not feasible. –--If we went the domestic way, it would probably take 100 years to get development in this country,” the minister said. (Rotich). I had not read or heard this opinion from our money man, but it is quite consistent with the Eurobond venture. When I heard that we were tendering an eurobond I wondered what the thesis was, given that almost every bond offer that the CBK writes gets an oversubscribed! I think it was our PODP who expressed a feeling of being left out in the bids because offers were not sufficiently publicized. In short amigo, I can't figure what it is behind the appetite for foreign over domestic debt. Or could it be economics of scale, i.e. to do with issuing massive amounts of debt in fewer packages hence lower cost of administration? That might explain why mama mbogas Ksh. 50,000 contracts have to be overlooked. I don't need to repeat the analysis you laid out to conclude that the man's 100 yr horizon for development with domestic borrowing is without basis, as I don't see any economics of scale making up for the additional forex costs of foreign relative to domestic borrowing. Clearly, not only did we did not attempt to exhaust domestic potential, but we did not even attempt to satisfy it, before exporting our borrowing. It is disturbing that we cannot find a good explanation for the taste for foreign over domestic borrowing. I too think debt is good. And I accept the preconditions you have set above, for this goodness to mature into reality. I am pleased to know this is not the issue for which you draw your evil machete I think Rotich is not telling us what he is really funding! And why he lurches from one cash strap to the next. –- Mpigs salaries and perks, new multi-billion scams, devolution looting, and as small change, the CBA's negotiated by us teachers and doctors and nurses during the Kibaki-Raila era, and which the two crooks ignored totally until the death of their regime. !!! Remember that’s where we started, but at the time we were just conjecturing that we had set ourselves in a way that we might have to do stupid things in finance. Now the red flags are mounting that we might already be in the thick of it. I am ok with a little generosity toward you guys who remove the stupid from our children, and those others who reengineer our bodies when they malfunction. Unfortunately many others don’t have voices, and remain under appreciated, but all those are matters for another thread. Is the local pot really dry, or is it that the markets know if Uhuruto borrows locally, they will default and be forced into Fimbonomics, print worthless paper and hyperinflate. Foreign debtors, like we saw with the Anglo-leasing cash transfer, have other methods of coercion, and will extort foreign currency from Kenya one way or another. If anyone argues the local pot is dry, s/he speaks against empirical evidence. Disturbingly, we have no good alternative explanation for the change in taste. Now, the one you suggest is a very alarming one! Of course borrowing externally, as opposed to internally, does not in any way caution us against default! In fact it increases the risk of default because, with all the cost of domestic borrowing, foreign borrowing adds at least the cost associated with foreign exchange risk (risk is a cost that is little appreciated outside economics, but it is a serious cost). But would Rotich be insensitive to it? Absolutely! Not because he would not appreciate it … but because of the political hook and line he’s held on. And should that be the explanation of all the crazy, then you know were are already sank! So the good old London School of Economics and Makerere don showed he knew a thing or two about healthy foreign- and domestic debt to GDP ratios, and the boosting of private FDI confidence –-even as the flight of John Githong'o should have been a crash! Now enter the doctor from Harvard's Kennedy School where they cook up these Fimbonomics of Quantitative Easing, teaching debt is sustainable forever Amen. No such thing as odious debts! From the university students unrests, one gets a hint the governement is neglecting the greatest infrastructural structure, brains. So we have a major unanswered question. And did you suggest that domestic lenders have also answered in kind, that they are not as interested as they used to be? That would be telling! Markets have a unique brain capacity that evades their individual players … the decisions made at the market level usually reveal knowledge of fundamentals that may not be as clear to the individual participants in the markets. Therefore, BIL, it is quite likely that the Kenyan lender has seen folly in the investments we make with our borrowing. oops! You had said it all already! No sooner had the Uhuruto complex achieved ascendancy to state power, than private investors seem to have pulled out or, on another reading, became lackluster in enthusiasm, citing the corruption portfolio of the Kenyan government, and financial-centres hostility due to other reasons, may be to do with ICC. Furthermore, the infrastructural deals with the Chinese were revised and were now not only qualified as DELIBERATELY inflated at the Nairobi end, but also so opaque it became a dangerous risk for big private investment capital. To make it worse, for the case of the SGR, the projected locomotive speeds of barely 50km/hr are slower than a haulage trailer on a bad road! The Chinese themselves tightened the conditions of the loan, from soft to hard! –-Whether the SGR is a profit or not, we will repay the loan at a profit rate!) Another reason to be worried about imminent default! We need economic statistics like the ones in the story you linked ... I will see what I can uncover in the next few days. Who knows what volume of printing we may have to do then, to meet our euro-denominated obligations? By the way, that story you linked ends with an alarming implication: that we have been tempted to prioritize speed to public spending over diligence in planning public investment! Investment planning, including economic feasibility studies, should be the priority. That might be what's lacking, and hence an indicator to domestic lenders that there is danger in lending to the republic. Foreigners are easily duped because they may not realize how much we leave to chance tomorrow's matters.
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Post by mank on Feb 2, 2015 8:32:57 GMT 3
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Post by jakaswanga on Feb 2, 2015 19:47:19 GMT 3
BiL, how much of an old who-re dog do you reckon our beloved Kenya is? --the second republic freshly liberated! I am told you can not teach an old dog new tricks. You try, you fail. like a crack-who-re is addicted to, so is our treasury to credit! A crack addict sells asss, what is our republic selling?
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Post by jakaswanga on Oct 9, 2015 19:55:17 GMT 3
Amigo Mank,
You are sorely missed Omera BiL,
will you please resurface, there are fine points to be argued!
Both Kamau Thugge and Henry Rotich are out of the country. They could not appear in parliament to explain stuff. Joseph Kinyua --the Prime Minister had to defend the fort best he could. I can only assume Rotich and Thugge are out peddling their arz-holes if there are any takers out there for a friendly rate. There are takers it would appear --SYNDICATED LOANS (what was that again in the fine print!?) are coming. The caveat being the prohibitive interest rates ... which, to date, has consumed all the famous Eurobond earnings which, originally, was to cater for infrastructural and technological support investment! --Evaporated! Reminding me of Loans to Greece meant to pay interest on loans meant to service some old debt. Rotich, Thugge and Njoroge (CBK)! You will remember George Saitoti --brainier than you cheap crooks from Harvard and Yale, did not have the guts to tell his boss, Arap Moi, that he was sinking Kenya. (Moi had to borrow from loan sharks in the city of London!)
Who, Mank, do you think Thugge and Rotich are meeting in secret out there? My bet is stop-gap financers! Old word: loan-shark!
All collected revenues are going to service maturing loans. New loans are to pay the public wage bill. Now, guys who went to harvard and Yale should look at the president running such a regime and tell him, boss, it can't last long! lets do this!
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Post by OtishOtish on Oct 10, 2015 1:34:46 GMT 3
The prospects of the government going broke is definitely not a trivial matter. But priorities. We shall get back to it as soon as we solve the more pressing problem of who fixed His Deputy Excellency.
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Post by OtishOtish on Oct 16, 2015 5:06:33 GMT 3
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Post by OtishOtish on Oct 18, 2015 20:34:57 GMT 3
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Post by jakaswanga on Feb 21, 2017 20:43:08 GMT 3
Since the days of referendum politics I feel increasingly uneasy with the prospects that Kenya is fanning its own financial calamity as it ever-reaches for what is unnecessary, unproductive, or inefficient. Before I go any further, let me clarify that I was never against a new constitution – rather I was, and always am for a constitution that is both sensitive to our means and essential. Before I ever took an economics class I had learned enough survival economics from mama. Mama would typically buy in small packages so she would spread her shilling over as much of what we needed in the week as possible – then once in a while mama would have enough of the shilling to go up the scale in some items without sacrificing the range of necessities. If she ever sent one of us to buy some of the items, she would coordinate all the buying so that in whole it would adhere to the principles of survival economics that governed her budgeting. It’s amazing the invisible data crunching that household budgeters like mama go through when there is not much of the shilling to work with. In my view, Detroit and Kenya are ridiculous failures at the simple economics that we learn from mama in the household kitchen. However we should not dare compare the two entities because Detroit can come out of its quagmire within no time, given its means, but Kenya can be doomed for generations upon a slight slip beyond a certain balance. --------------------------------------------- We have the politicians’ so-called-salaries that make other public employees wonder what the heck. With those not tamed, even with the recent pathetic pretence of the Public Service Commission to have tamed them, teachers, doctors, etc, even the government drivers that outnumber government vehicles, will demand higher wages – and they should get them. There is a thirst for tourism that our politicians fund for themselves any time they are bored with their every-day idling in Kenya – recently we have heard about a window-shopping spree in China for office furniture. That’s not how mama would go about buying furniture. But of course they would ask “kwani pesa ni ya mama yako?” This kind of wondering aloud never comes up in projects that support some productive process or even contribute in the synergy of anything that is productive. All this, and much more, and we don’t boast of any industry! We have to wake up or it won’t be long. sO-called salaries! I have news for you Mank! Try finding a name for this! Anybody go to econometric school out there!? I think we staring at bankruptcy!
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Post by jakaswanga on Feb 21, 2017 20:49:15 GMT 3
On the sidelines, here is an important argument Meanwhile how is the debt portfolio of Mr. Rotich? Is he much in milk?
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