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US yield inversion deepens, stokes recession fears

US yield inversion deepens, stokes recession fears

The US yield curve inversion deepened on Tuesday to levels not seen since 2007, rekindling fears of a looming recession that spurred a sell-off on Wall Street and stoked even more safe-haven demand for government bonds.

The intense interest in Treasuries supported demand for $40 billion worth of two-year government debt for sale, part of this week’s $113 billion fixed-rate Treasury supply.

The yield curve often inverts prior to a US recession.

“As the curve inverts further, it has inspired more long-end buying,” said Mike Lorizio, head of Treasuries trading at Manulife Asset Management in Boston.

The US Treasury Department sold its latest two-year, fixed-rate note supply at a yield of 1.516%, which was the lowest at an auction of this maturity since September 2017.

The Treasury will sell $41 billion of five-year notes on Wednesday, followed by a $32 billion auction of seven-year debt on Thursday. It will also offer $18 billion in floating-rate notes on Wednesday.

On the open market, 10-year Treasury yields were 1.488%, down 5.60 basis points on the day. They reached a three-year low of 1.443% on Monday.

The yields on two-year notes were 1.531%, down 2.00 basis points. On Monday, they declined to 1.449%, the lowest since September 2017.

The three major Wall Street indexes were lower, wiping out their initial increase.

The spread on three-month T-bill rates over 10-year yields grew as wide as 52 basis points, a level not seen since March 2007, according to Refinitiv data.

The deepening curve inversion reflects investors’ nervousness about a recession and uncertainties over the trade conflict between China and the United States.

“It’s not a sign of confidence in inflation or a pickup in growth,” Lorizio said.

PressTV-US considering tax cuts to avoid looming recession

US President Donald Trump on Monday said he expected a trade deal with China after positive gestures by Beijing following a global stock market rout last week.

China’s Foreign Ministry said on Tuesday it had not heard of any recent telephone call between the United States and China on trade. This raised doubts whether the world’s two biggest economies can reach a trade deal in the foreseeable future.

A closely followed J.P. Morgan survey suggested blistering demand for Treasuries has tapered a tad as the share of investors who said they were neutral on longer-dated US government debt grew to 54% on Monday, up from 49% a week ago.

On the data front, US consumer confidence weakened a bit in August even though consumers’ optimism on their present situation hit its strongest level since late 2000, the Conference Board said.

(Source: Reuters)


Cameroonians outraged by imported rice as local rice left unsold

Cameroonians outraged by imported rice as local rice left unsold

Photos of many sacks of rice stacked in warehouses in far northern Cameroon were posted on Facebook in early August. According to the group that posted the images– which works for food sovereignty– this rice was produced in Cameroon but has never been sold, even though the country imports large quantities of rice every year. The group called it a “scandalous” situation, considering the struggles faced by local rice producers.

These photos were taken on August 2 and 3, then posted online on August 5 by Bernard Njonga, the president of a group that works for food sovereignty and other topics, called ACDIC, or the Citizen Association for the Defense of Collective Interests (in French, Association citoyenne de Défense des Intérêts collectifs).

The photos and videos, which have garnered tens of thousands of views, were taken in Yagoua and Maga, where most of Cameroon’s rice is grown. They show locally produced rice stocked in warehouses belonging to a public organisation that supports local rice growers called the Society for the Expansion and Modernisation of Rice-growing in Yagoua (known as SEMRY, the acronym for the French Société d’Expansion et de Modernisation de la Riziculture de Yagoua).

“The SEMRY shops are full of unhusked rice in YAGOUA and Maga (about 160,000 tons). Some of the stock dates back to 2015”, reads the post. “We import and import rice more and more. More than 800,000 tons in 2017 for a total of more than 150 billion FCFA.”

According to ACDIC president Njonga, who wrote the post, this situation came about because it is more profitable for shopkeepers to buy foreign rice than local rice.

Facebook post by Bernard Njonga (translated from French): “CAMEROONIAN RICE. ‘THE SCANDAL OF THE CENTURY IN YAGOUA & MAGA’ STOP!” These photos were taken in Maga and Yagoua, in far northern Cameroon.

“Cameroonian rice producers don’t get any subsidies”

Bernard Njonga told the FRANCE 24 Observers team about what he calls a “scandalous” situation.

When I went to Yagoua and Maga, I didn’t expect to see so much rice in the warehouses- especially not rice that has been sitting there unsold since 2015!

Currently, the cost of producing rice in Cameroon elevated because rice producers don’t get any subsidies. What’s more, transporting a bag of rice between Yagoua and Yaoundé costs more than if it came from Beijing. So, for shopkeepers, it is more profitable to buy foreign rice than local rice. So, Cameroonian rice producers are becoming poorer and poorer.

We think that three things need to be done. First, we need to impose a quota, insuring that local shopkeepers buy a certain percentage of local rice. [Editor’s note: The ACDIC has already launched a petition calling for this.] We also need to provide subsidies to local farmers, and to promote local rice to improve its image. 

Nothing out of the ordinary, according to SEMRY

The FRANCE 24 Observers reached out to the director general of SEMRY, but he did not respond to our request for comment.

However, SEMRY did release a statement in response to the post by the president of the ACDIC, explaining that SEMRY had “started to store rice in its shops in Maga and Yagoua in 2017”, “in preparation for the launch of […] two new machine lines” purchased by the government to “relaunch the transformation of paddy rice”. This could explain why there was so much rice stocked in the SEMRY warehouses.

However, SEMRY did not respond to the comments made by the ACDIC president about the difference in price between local rice and foreign rice, and the difficulties of rice producers.

The statement by the director general of SEMRY.

“People know that working in the rice sector isn’t profitable but many do it because they don’t have a choice”

Narcisse Guybolo, the founder of Agri-Invest, a company that supports farmers (especially rice producers), spoke the FRANCE 24 Observers team about the difficulties faced by rice producers in Cameroon.

I think the main problem is that SEMRY doesn’t support rice farmers as it should. There are about 100,000 rice producers living in the region around Yagoua and Maga. Currently, SEMRY rents these farmers just under 27,200 acres of land. SEMRY takes care of the irrigation of this land but doesn’t give the farmers information on how to use agricultural inputs or how to access new technology. Moreover, they have very little training in the commercialization of their products.

So rice producers buy their own seeds and inputs at a high price and then they don’t use the best techniques and they fall into debt.

People in this region know full well that working in the rice-producing sector isn’t profitable but many of them do it anyway because they don’t have a choice. It does represent the main economic activity in the region.

“The export of Cameroonian rice to Nigeria stopped in 2015”

Up until 2015, almost all Cameroonian rice was sold in Nigeria. But the exports stopped because of an increase in activities carried out by the terrorist group Boko Haram in the region.

Currently, the aim is to sell the rice internally. However it remains difficult to get intermediaries interested in buying and distributing this rice because it remains cheaper to import rice from abroad.

Source: France 24



US: President Trump terrified looming recession will destroy his re-election bid

US: President Trump terrified looming recession will destroy his re-election bid

US President Trump has reportedly showed concern privately about an emerging economic recession that could seriously dent his chance of reelection in 2020.

Trump has been “anxious and apprehensive” about the prospects for the US economy amid signs of a global economic slowdown, the Washington Post reported Thursday, citing sources familiar with the matter.

Trump has spoken by phone with business leaders and financial executives this week to discuss ways to avoid an economic crash, the report said.

He has even accused the media and economists of skewing data to thwart his reelection, according to the report.

“He’s rattled,” a Republican close to the administration told the Post. “He thinks that all the people that do this economic forecasting are a bunch of establishment weenies — elites who don’t know anything about the real economy and they’re against Trump.”

Trump administration officials are “planning no new steps to attempt to stave off a recession,” while delivering an upbeat assessment of the US economy to the president, according to the Post.

Signs of an economic downturn will  be highly detrimental to Trump’s reelection bid, who won office partly on the pledge to strengthen the US economy through his so-called America First trade policies.

Trump has dismissed negative economic forecasts and has boasted the health of the US economy. In a tweet on Thursday, he blamed the media for trying to provoke a recession and damage his chances of reelection.

“The Fake News Media is doing everything they can to crash the economy because they think that will be bad for me and my re-election,” he tweeted. “The problem they have is that the economy is way too strong and we will soon be winning big on Trade, and everyone knows that, including China!”

Winning reelection during recessions has historically proven to be a tough obstacle. Since the US Civil War, only one president, William McKinley, has been reelected after a recession in the final two years of his first term.

On Wednesday, US stocks tumbled as weak economic data from China and Germany and a key US Treasury benchmark exacerbated global recession fears.
Source: Presstv


Southern Cameroons Crisis: Dangote Cement sees 7% sales drop

Southern Cameroons Crisis: Dangote Cement sees 7% sales drop

Dangote Cameroon has posted a 7.1 per cent drop in sales in the 1H19 when compared with the 1H18.

“Our 1.5 Mta clinker mill in Douala sold about 0.6 Mt of cement in the first half of 2019, down 7.1 per cent from 0.64 Mt sold in the first half of 2018. We estimate that our market share was 40 per cent during the period, “says Dangote.

“The decrease in our sales can be attributed to persistent security concerns in the North West and Southwest regions, which resulted in a reduction in activity, as well as a capacity of 1.6 Mta by new competitors,” the company added.

Published under Cement News


Airbus capitalising on Boeing’s woes is challenging

Airbus capitalising on Boeing’s woes is challenging

With its main rival hobbled by the worldwide grounding of a top-selling jet, Europe’s Airbus could seem poised to emerge as the undisputed global aerospace leader.

Airbus has overtaken the American giant Boeing in some key benchmarks in 2019. And the company is now better positioned to move quickly on a new jet product.

Meanwhile, the American company is mired in efforts to get its crisis-stricken 737 MAX planes back in the sky after two deadly crashes.

Still, experts say the Toulouse, France-based aviation giant faces production constraints that likely limit its ability to grab more market share.

“Airbus is a winner only at the margins,” said Richard Aboulafia, a longtime industry analyst at the Teal Group, an aerospace market analysis firm.

To be sure, Boeing’s suspension of deliveries of its top-selling plane has added luster to Airbus’s solid and unscathed results.

Moreover, as the MAX grounding has dragged on since March, key airline customers are becoming increasingly blunt in expressing frustration.

Airbus delivered 389 planes through the end of June, an increase of 28 percent. During the same period, Boeing deliveries fell 37 percent to 239.

It was the first time since 2011 that Airbus overtook its US rival in plane deliveries, which is when the bulk of revenues are generated, effectively rendering Airbus the world’s largest aircraft maker.

Airbus also has had net orders of 88 planes in 2019, compared with Boeing, which has seen a decline of 119.

At the Paris Air Show in June, Airbus announced orders for 383 planes worth $44 billion, about $10 billion more than Boeing’s take from the show.

Still, a consolation prize for the US company was a letter of intent by British Airways parent IAG to buy 200 new 737 MAX planes, a vote of confidence in the aircraft.

Airbus is primed to move more quickly with commercializing a new mid-distance plane, launching the A321XLR in Paris this year, a single-aisle plane with greater range and passenger capacity of 240.

Boeing also has had a plan under development for a competing jet, but the timeframe has been pushed back because of the MAX.

– No major Boeing cancelations –

But since the MAX crisis, Boeing has seen “no major cancellations of orders,” said Aboulafia.

The Saudi budget carrier Flyadeal reversed a plan to purchase MAX planes but the deal had been provisional, aviation experts said.

Still, some plane contracts allow airlines to cancel the agreement without charge six months after a grounding. That means late September could be a telling juncture.

“That’s when we’ll know whether Airbus really has benefited from this tragedy,” said Michel Merluzeau, an expert at Air Insight Research, an analysis firm and consultancy.

But even if airlines did want to shift to Airbus, they might have doubts about the European company’s ability to deliver higher output.

Ramping up production in aerospace is a capital-intensive process that involves around five years of planning, Merluzeau said.

“I’m not sure Airbus’s supply chain can sustain another increase in production,” Aboulafia said. “It will require additional investments, and we are talking about millions of dollars.”

Airbus has struggled to keep up with some of its production targets due to difficulties at engine makers Pratt & Whitney and CFM International, a joint-venture of General Electric and Safran.

Airbus has said it expects output of MAX rivals under its A320 line to reach 60 per month in 2019 and 63 per month next year.

AFP



Turning waste into a business in the slums of Yaoundé, Cameroon

Turning waste into a business in the slums of Yaoundé, Cameroon

For the past 20 years, a young man from the slums of Yaoundé, the capital of Cameroon, has been running a local waste collection service that has had a transformative impact on the community around him. The residential area of Melen, like most teeming city’s informal settlements, is not connected to the public garbage disposal system.

Through the Tam Tam Mobile, nearly every morning at 6 a.m., a team of young men from Melen make their way through the community. At the end of their shift, they unload their full carts at a municipal waste collection point outside the slum.

The Tam Tam Mobile initiative is supported by UN-Habitat, the United Nations programme working towards a better urban future.

Source: News.UN.Org


Doing Business With A War Criminal: Geovic Mining Corporation Chairman Meets Biya

Doing Business With A War Criminal: Geovic Mining Corporation Chairman Meets Biya

Michael T. Mason, Chairman of the Board of Directors and Chief Executive Officer of Geovic Mining Corporation was received in audience by the President Paul BIYA at Unity Palace on 25 July 2019. Biya and the French Cameroun army are currently carrying out a genocidal campaign in Southern Cameroons that have claimed the lives of thousands of innocent Ambazonian citizens and displaced some half a million people.

State media reported that the manager of the U.S. Company exchanged views with Mr Biya on Geovic’s complete readiness to exploit cobalt, nickel and manganese in the East and South Regions of Cameroon.

Michael Mason revealed to reporters at the end of the talks that the group intends to execute a long term project, with at least a 40-year lifespan and an initial investment worth over 400 million U.S dollars.

The Geovic boss noted that they plan to employ about 700 people, provide schools for training and colleges for technology transfer in order to develop the industry in Cameroon. He emphasised that they wish to do this very professionally.

Michael Mason was accompanied to the Unity Palace by the U.S. Ambassador to Cameroon, Peter Henry Barlerin.

Culled from PRC


CDC: Second Largest Employer Going, Going, Gone

CDC: Second Largest Employer Going, Going, Gone

Cameroon’s second largest employer, the Cameroon Development Corporation, says it has been paralyzed by the separatist conflict in the country’s English-speaking regions.  The agricultural giant has not been able to pay its staff for a year because of falling production and revenue.

The village of Meanja used to be a banana production center in Cameroon’s English-speaking southwest.

Two years ago, 2,000 people lived here, and many worked for the Cameroon Development Corporation’s banana production unit.

Abandoned banana plantation in Buea, Cameroon, July 18, 2019. ( M. Kindzeka, VOA)
Abandoned banana plantation in Buea, Cameroon, July 18, 2019.

But these days, a visiting reporter sees only abandoned houses, empty schools, and silent factories.

Oliver Kogue worked at the Meanja banana factory but says security threats forced them to shut down. Armed separatists attacked the factory in 2017, he says, killing four workers and wounding scores of others.

“This production unit produces averagely 60 tons of banana daily and after this attack, work has ceased.  Workers escaped for their dear lives,” Kogue said. “Five-hundred-and-60 workers were working in this particular section. In the course of stopping work we have deprived 560 workers from employment.”
The Cameroon Development Corporation is the central African country’s second largest employer and runs banana, palm oil, and rubber plantations.

But the three-year conflict between Anglophone Self Defense Groups and French Cameroun government troops has forced the CDC to close farms and factories across Southern Cameroons.

CDC general manager Franklin Ngoni Njie says more than half of his 20,000 workers – fearing attacks – refuse to work, while the remainder work only part-time.

“If you look at the economy of the area, what else do we have? CDC every month directly in form of salaries and wages is 2.2 billion {CFA} francs every month,” Njie said. “All of that activity is dead.”

Cameroon’s Francophone agriculture minister, Gabriel Mbairobe, says the government is negotiating with staff to resume work. He says the government will assure their safety and settle the past year of unpaid salaries.

Cameroon Agriculture minister Gabriel Mbairobe, Buea, Cameroon, July 18, 2019. ( M. Kindzeka, VOA)
Cameroon Agriculture minister Gabriel Mbairobe, Buea, Cameroon, July 18, 2019. 

“I will like to appreciate the willingness of all workers to resume work,” Mbairobe said. “I can assure them that the government will take all the measures to pay their salary arrears and to give money so that the plantations and the factory will be back in activity.”

The conflict in Cameroon’s English-speaking regions was sparked in 2016 by protests against discrimination from the country’s French-speaking majority in education and the justice system.

The government responded with a crackdown and armed separatists fought back.

The Ambazonia Restoration Fighters consider state-run companies such as the CDC and institutions such as schools legitimate targets.

Last month, the Cameroon Employers Association said Self Defense Groups had transformed many CDC plantations into training grounds.

Reported by the VOA with additional editing from Camcordnews


IMF Executive Board Completes Fourth ECF Review for Cameroon and Approves US$76.2 Million Disbursement

IMF Executive Board Completes Fourth ECF Review for Cameroon and Approves US$76.2 Million Disbursement

The Executive Board of the International Monetary Fund (IMF) completed the fourth review of the arrangement under the Extended Credit Facility (ECF) for Cameroon on July 17, 2019. The completion of the review enables the disbursement of SDR 55.2 million (about US$76.2 million), bringing total disbursements under the arrangement to SDR 372.6 million (about US$514.5 million).

The Executive Board also approved the authorities’ request for a waiver for the non-observance of the performance criteria pertaining to the external arrears’ accumulation and the ceiling on net BEAC financing, based on the corrective actions taken by the authorities.

Cameroon’s three-year arrangement was approved on June 26, 2017 for SDR 483 million (about US$666.9million, or 175 percent of Cameroon’s quota—see Press Release No.17/248.) The arrangement aims at supporting the country’s efforts to restore external and fiscal sustainability and to lay the foundations for a more sustainable, inclusive and private sector-led growth.

Following the Executive Board discussion, Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair, made the following statement:

“Cameroon’s performance under the ECF-supported program has improved from a year ago. Most end-December 2018 targets including on the fiscal deficit have been met, and structural reforms are advancing.

Cameroon continues to play a leadership role in the rebuilding of CEMAC’s fiscal and external buffers. Going forward, the Cameroonian authorities’ continued support of the implementation of the BEAC’s foreign exchange regulation will be essential to ensure full repatriation of foreign exchange receipts.

Enhanced fiscal discipline is key to reaching the end-2019 program targets and mitigating risks from external shocks and security challenges. Reducing recourse to exceptional spending procedures and completing the Treasury Single Account reform will support the steadfast implementation of the 2019 budget while improving cash management and the transparency of budget execution.

Refraining from new non-concessional borrowing and strictly adhering to the disbursement plan for contracted-but-undisbursed loans are essential to preserving debt sustainability. Further project prioritization and enhanced investment efficiency will help address developmental needs while supporting prudent debt management. Improving the financial viability of key public enterprises through performance contracts and targeted reforms of administered prices will reduce reliance on subsidies and mitigate risks from contingent liabilities.

Enhancing financial inclusion, the business climate, and governance remains central to promoting private sector development and boosting competitiveness. In particular, further strengthening EITI compliance and the AML/CFT framework are essential to promoting private sector-led growth and attracting foreign investment.

Cameroon’s program continues to be supported by the implementation of supportive policies and reforms by the regional institutions in the areas of foreign exchange regulations and monetary policy framework and to support an increase in regional net foreign assets, which are critical to the program’s success.”

IMF Communications Department



Rubber, Palm-Oil Output Slashed by Ambazonia Revolution

Rubber, Palm-Oil Output Slashed by Ambazonia Revolution

Cameroon top state-owned agribusiness said the Anglophone crisis in the country has had a “disastrous” effect on its operations, cutting output of palm-oil and rubber and leaving most of its banana plantations destroyed.

The majority of about 22,000 workers at the Cameroon Development Corp., the country’s biggest employer after the state, are no longer going to the company’s plantations and haven’t been paid for months, Director-General Franklin Ngoni Njie told reporters on Sunday. Sixteen workers have been killed by separatist fighters since the crisis erupted almost three years ago, and 98 others have been assaulted or maimed, he said.
The CDC grows and processes rubber, palm-oil and bananas on about 42,000 hectares (104,000 acres). Most of its plantations are in the Southwest and Northwest regions, where Cameroon’s minority English-speaking population lives. Economic activities in the two regions have been paralyzed by rebels who want to break away from the larger French-speaking area in the central African nation.
The unrest has left only four out of 11 rubber estates functional, halted operations at two palm-oil mills and slashed output to 2,100 metric tons, from an expected 17,400 tons, the CDC said. Agriculture Minister Gabriel Mbairobe said on July 5 that President Paul Biya would take “urgent measures” to ensure a resumption of activities at the company.
Source: Bloomberg



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