Ushahidi.com, an up to the minute informative website that allows anyone to upload eye witness accounts of what’s happening on the ground. Ory Okolloh’s idea and through the collaborative efforts of techies like David Kobia, Daudi Were and Erik Hersman, the site was up and running in a record two days!after the idea was birthed and thus far has gained enormous press coverage and attention.
BBC audio interview link
A group of Kenyans led by my girl, Karimi Gituma- a med student at Harvard- are planning a benefit concert in Boston to feature Kenyan artists. The objective is to raise awareness and necessary funds needed to channel to the Kenya Red Cross which is spearheading the relief efforts and providing temporary shelters for the multitudes of displaced families and individuals nationwide.
Key here is also to reach out more to the grassroots’ organizations who are working with paltry budgets because they don't have don't have the same stature and goodwill that KRC has. There's also a special emphasis on medical supplies as well not only to treat and contain but also prevent any medical outbreaks. No final dates confirmed yet but the alacrity displayed by organizers leaves little doubt that it will be a great success.
Finally, people an inspired bunch heeding to the call of action!
www.onenationoneparty.com, from the TRIO, that is Trueblaq entertainment, Kenya vibe and I forget who the other partner is. My buddy Dicki and company organize various entertainment events nationwide particularly in LA/San Diego area. Looking forward to rudge as usual and this will not disappoint!....although haven’t got word yet whether they are going to be donating profits to the same cause or not.
Tuesday, January 15, 2008
Monday, December 31, 2007
A plea to protect and preserve Kenya!
Wanainchi, our beloved country is under siege. There’s no question the elections clearly marred in controversy, with strong public perception and evidence that the process was, flawed and rigged with impunity in favor of the incumbent/ PNU. Neither party is however entirely credible because there were also reports of PNU agents being locked out of polling centers in Raila strongholds. However, thats behind us and we are now staring down the path of civil war following the announcement that the incumbent Kibaki is once again our President.
Violence has erupted in various parts of the country, pitting neighbor versus neighbor, friend versus friend. We know where the road will take us if the situation is not contained. Our peaceful way of life may come to an end as the tribal vitriol, riots, chaos and confusion spiral and escalate into war; setting Kikuyus against everybody else.
This is not acceptable. Bloodshed will not solve the problem; it will simply fuel the incendiary and turn us into another banana republic.
I understand the consternation and betrayal felt in people’s hearts, that the democratic process was subverted at the expediency of a few consequently invalidating the wanainchis inalienable right to freely choose their leader. However, my brothers and sisters, Kenya transcends our egos and ethnic affiliations; we cannot possibly allow ourselves to disintegrate and fall because we have chosen to retaliate and let our self importance foreshadow our conscience and love for the nation.
Let us stand against tyranny and clamor for justice. Let us oppose leaders who have no moral and constitutional authority to govern, who have forcibly thrusted themselves upon us. Let us fervently protest and ensure our voice is heard from the hill crests to the valley troughs.
However, let us do so in peace and condemn wanton acts of violence that threaten to rip the fabric of our nation apart.
“Violence as a way of achieving racial justice is both impractical and immoral. I am not unmindful of the fact that violence often brings about momentary results. Nations have frequently won their independence in battle. But in spite of temporary victories, violence never brings permanent peace. It solves no social problem: it merely creates new and more complicated ones. Violence is impractical because it is a descending spiral ending in destruction for all. It is immoral because it seeks to humiliate the opponent rather than win his understanding: it seeks to annihilate rather than convert. Violence is immoral because it thrives on hatred rather than love. It destroys community and makes brotherhood impossible. It leaves society in monologue rather than dialogue. Violence ends up defeating itself. It creates bitterness in the survivors and brutality in the destroyers.”
Let us heed and digest these words of the late great Martin Luther King Jnr..
Violence has erupted in various parts of the country, pitting neighbor versus neighbor, friend versus friend. We know where the road will take us if the situation is not contained. Our peaceful way of life may come to an end as the tribal vitriol, riots, chaos and confusion spiral and escalate into war; setting Kikuyus against everybody else.
This is not acceptable. Bloodshed will not solve the problem; it will simply fuel the incendiary and turn us into another banana republic.
I understand the consternation and betrayal felt in people’s hearts, that the democratic process was subverted at the expediency of a few consequently invalidating the wanainchis inalienable right to freely choose their leader. However, my brothers and sisters, Kenya transcends our egos and ethnic affiliations; we cannot possibly allow ourselves to disintegrate and fall because we have chosen to retaliate and let our self importance foreshadow our conscience and love for the nation.
Let us stand against tyranny and clamor for justice. Let us oppose leaders who have no moral and constitutional authority to govern, who have forcibly thrusted themselves upon us. Let us fervently protest and ensure our voice is heard from the hill crests to the valley troughs.
However, let us do so in peace and condemn wanton acts of violence that threaten to rip the fabric of our nation apart.
“Violence as a way of achieving racial justice is both impractical and immoral. I am not unmindful of the fact that violence often brings about momentary results. Nations have frequently won their independence in battle. But in spite of temporary victories, violence never brings permanent peace. It solves no social problem: it merely creates new and more complicated ones. Violence is impractical because it is a descending spiral ending in destruction for all. It is immoral because it seeks to humiliate the opponent rather than win his understanding: it seeks to annihilate rather than convert. Violence is immoral because it thrives on hatred rather than love. It destroys community and makes brotherhood impossible. It leaves society in monologue rather than dialogue. Violence ends up defeating itself. It creates bitterness in the survivors and brutality in the destroyers.”
Let us heed and digest these words of the late great Martin Luther King Jnr..
Saturday, November 24, 2007
Brace Yourself !
After the stock market bloodbath which we have witnessed in the last few weeks, why shouldn't an enterprising investor stay away from the markets temporarily?
It appears investors have been spooked by recent colossal write downs reported by nearly all the major investment banks indicating that the turmoil in the credit markets is far from over. In fact some pundits warn that this is just the beginning and forecast that 2008 will be the year of reckoning.
You remember the controversial summer bailouts-when the major central banks around the world infused over a hundred billion dollars into the markets to ease the liquidity crunch? So much for the band aid solution which did not address the underlying weaknesses in the credit markets but instead sought to act as a temporary reprieve and serve as an artificial stimulus!
Deja-vu all over again? After a second run to past 14,000 a few weeks ago, the Dow has since lost over 1000 points, the NASDAQ and S&P are both down as well.
Outside of the financials, fundamentals seem to be sound as of now with some companies like HP who recently reported a 28% increase in profits in the last quarter. This holiday season is expected to be the slowest since 2002 with retail sales forecasted to increase only by 4% compared to last years 4.8%.
Personally, I don’t think that consumption will slow down. Yes, while it is true that foreclosures and delinquencies are at their highest level and home values have adjusted downwards, the American consumer is tenacious and will borrow to the hilt in an effort to maintain the lifestyle.
I managed to rollout of bed and join avid shoppers the queue at Best Buy at 4am on “Black Friday” not to shop, because I had already done so online, but to gauge consumer sentiment. My erudition yielded results that reinforced my opine-that shopping patterns haven’t changed and will not change much and consequently, we can expect retailers to report blow out earnings next quarter. My portfolio is long AAPL and GRMN because I believe their bottomline will benefit tremendously from this shopping season resulting in some nice capital gains when I exit.
However, I would advise investors with a short time horizon to refrain all together, go short or buy put options. Use ETF’s like QID, DOG, SDS, MZZ…etc which short indices. Avoid shorting individual stocks. Advanced investors should profit from the volatility using combination option strategies like straddles, which allow the holder to profit based on how much the price of the underlying security moves, regardless of the direction of price movement.
I foresee a continuing onslaught on the financials. Look for more surprises in the form of restated earnings and more write downs which have besmirched the balance sheets of otherwise profitable companies like Citi (C), Merril (MER) and Bear (BSC). These events will foreshadow overall good earnings results reported next quarter and hurt consumer and business confidence which will result in another sell off.
In an effort to mitigate risk and reduce exposure to consumer debt, banks will follow suit lowering credit lines thus dampening both consumer and business spending further; the tighter credit markets will result in a drag on the overall economy which will soon spread beyond housing into other sectors.
If the Fed vacillates like last time, the credit squeeze might spell doom for all and spiral us into a recession. Yes I said the R word.
It appears investors have been spooked by recent colossal write downs reported by nearly all the major investment banks indicating that the turmoil in the credit markets is far from over. In fact some pundits warn that this is just the beginning and forecast that 2008 will be the year of reckoning.
You remember the controversial summer bailouts-when the major central banks around the world infused over a hundred billion dollars into the markets to ease the liquidity crunch? So much for the band aid solution which did not address the underlying weaknesses in the credit markets but instead sought to act as a temporary reprieve and serve as an artificial stimulus!
Deja-vu all over again? After a second run to past 14,000 a few weeks ago, the Dow has since lost over 1000 points, the NASDAQ and S&P are both down as well.
Outside of the financials, fundamentals seem to be sound as of now with some companies like HP who recently reported a 28% increase in profits in the last quarter. This holiday season is expected to be the slowest since 2002 with retail sales forecasted to increase only by 4% compared to last years 4.8%.
Personally, I don’t think that consumption will slow down. Yes, while it is true that foreclosures and delinquencies are at their highest level and home values have adjusted downwards, the American consumer is tenacious and will borrow to the hilt in an effort to maintain the lifestyle.
I managed to rollout of bed and join avid shoppers the queue at Best Buy at 4am on “Black Friday” not to shop, because I had already done so online, but to gauge consumer sentiment. My erudition yielded results that reinforced my opine-that shopping patterns haven’t changed and will not change much and consequently, we can expect retailers to report blow out earnings next quarter. My portfolio is long AAPL and GRMN because I believe their bottomline will benefit tremendously from this shopping season resulting in some nice capital gains when I exit.
However, I would advise investors with a short time horizon to refrain all together, go short or buy put options. Use ETF’s like QID, DOG, SDS, MZZ…etc which short indices. Avoid shorting individual stocks. Advanced investors should profit from the volatility using combination option strategies like straddles, which allow the holder to profit based on how much the price of the underlying security moves, regardless of the direction of price movement.
I foresee a continuing onslaught on the financials. Look for more surprises in the form of restated earnings and more write downs which have besmirched the balance sheets of otherwise profitable companies like Citi (C), Merril (MER) and Bear (BSC). These events will foreshadow overall good earnings results reported next quarter and hurt consumer and business confidence which will result in another sell off.
In an effort to mitigate risk and reduce exposure to consumer debt, banks will follow suit lowering credit lines thus dampening both consumer and business spending further; the tighter credit markets will result in a drag on the overall economy which will soon spread beyond housing into other sectors.
If the Fed vacillates like last time, the credit squeeze might spell doom for all and spiral us into a recession. Yes I said the R word.
Thursday, October 25, 2007
Fallen from the skies; Maurice Odumbe
I came across a disheartening storo a few weeks ago in the local dailies. The pulse magazine insert in the Standard that was about matchmaking celebrities appropriately titles “soul mates and fall mates.”
Starring in it was Maurice Odumbe, the disgraced cricket star who was banned from the game for five years after allegations of match fixing and book making were finally substantiated by unearthing overwhelming evidence against him.
Forget the matchmaking prediction, the next couple of paragraphs aroused my emotions, causing me to cuss out in angst……I believe my exact words were “you dumb fu**”, which I yelled atop my voice to amazement of my co-workers who were now curiously looking on, probably thinking I was going to pull out a machete and massacre them? Read on and you’ll understand why…..
“Once upon a time in 2003 during the Cricket World Cup, Maurice Odumbe was a sporting superstar with a white wife, Katherine Maloney — a teacher at the ISK, two kids and two white side dishes —Caitlan Patterson and Katja Nielsen.
He traveled the world, played cricket, played white chicks, rented a mansion in Runda and owned a BMW 520i, two other BMWs and a Mercedes Benz.
Then the International Cricket Council came calling, accusing him of bookmaking and match fixing. Hell hath no fury like a white Chiquitta played, and all the three of his women got together, not for a ‘menage-a-quartet’ but to testify against Maurice.
Five-year cricket ban, and Odumbe was sank.
He’s moved from Runda to a flat in Kileleshwa, and sold his three ‘Beamers’ and the Benz (Assuming the show-room cars cost him a total of Sh10 million, why Maurice didn’t simply floss with a Sh2.5 million ‘Beamer’ and invest Sh6 or 7.5 million of his cheddar in his own home, we will never know).
Anyway, our concern is his women and fiancÈes, not his finances. And white chicks aren’t good for our Odumbe lad.”
I don’t care about the white mamaz, my concern is his finances!
I am consternated by how he managed to scupper resources in a relatively short amount of time-a classic case of rags to riches to rags again. Stories like these are ubiquitous and transcend ethnicity, background, sexual orientation and religion. It can happen to anyone, a sure recipe for financial ruin is of course outta control spending without regard for thrift, saving and investing in assets. Odumbe frittered a small fortune away by choosing to keep up with the wabenzi instead. Robert Kiyosaki observed that his rich dad invested in assets while poor dad invested in liabilities. The outcome of both choices is known.
Assuming that Maurice had sought wise counsel from a financial planner, how would he have fared? Lets go back to in time, to the peak of his career and assume he had that 10 million in cash.
There are numerous avenues through which an investor may choose to diversify their portfolio of assets to include but not limited to equity stocks, real estate-land, commercial and residential properties, government securities, unit trusts etc. According to a research report carried out by city villas, real estate is the most preferred form of investment followed by shares.
This would have been my asset allocation recommendation.
4.5 million—Home
500 K—emergency funds stash
500 K—Operating cash
3 million—equities
1.5 million—Vehicle
House: 4.5 million back then would get you a 3 bed house in Kilimani/Hurlingham area or a posh flat in Westlands, Lavington surbubs.
Emergencies: Its always advisable to have 3-6 months worth of living expenses set aside in a savings or money market accounts for emergency purposes.
Moti: Since jangos love to floss, 1.5 M would have got him a used 200 Merc or 5 series Beemer so that he can go toe to toe with the best of them.
Investments: Equities were completely undervalued at the time. The NSE index was roughly at 1500 and although GDP growth was at 2% and interest rates hovering in the 20% range, certain sectors of the economy were still thriving eg Banking.
How would he have fared using this approach:
Property values have since sky rocketed. According to the national property index report, some areas in Nairobi have seen 100% price appreciation due to rising demand and short supply. Three bedroomed flats in Kilimani, Lavington, Westlands are now going for 6.5-11 million Ksh!
The NSE has been one of the world’s best performing stock exchange. According to Standard and poor’s, the Index rose 787% in dollar terms from 2002 to 2007. $1 dollar invested in 2002 would equal $787 at the beginning of 2007!
Odumbe Then>>>>>>>>>>> Odumbe Now
4.5 million House>>>>>>>>> 7.5 Million
3 million invested in the NSE >>>>>23.61 Million
Change in Net worth:
20.61 + 3 = 23.61 Million!! The idiot would have had a net worth of 23.61 million!! Today, he close to nada.
In the words of Ben Franklin, wealth is created by industry and frugality. Save, Plan ahead, buy assets which grow in value or produce income not liabilities which loose value and reduce income. Unfortunately for Maurice, the lesson is a bitter pill to swallow but what better way to learn than from experience huh mate?
Starring in it was Maurice Odumbe, the disgraced cricket star who was banned from the game for five years after allegations of match fixing and book making were finally substantiated by unearthing overwhelming evidence against him.
Forget the matchmaking prediction, the next couple of paragraphs aroused my emotions, causing me to cuss out in angst……I believe my exact words were “you dumb fu**”, which I yelled atop my voice to amazement of my co-workers who were now curiously looking on, probably thinking I was going to pull out a machete and massacre them? Read on and you’ll understand why…..
“Once upon a time in 2003 during the Cricket World Cup, Maurice Odumbe was a sporting superstar with a white wife, Katherine Maloney — a teacher at the ISK, two kids and two white side dishes —Caitlan Patterson and Katja Nielsen.
He traveled the world, played cricket, played white chicks, rented a mansion in Runda and owned a BMW 520i, two other BMWs and a Mercedes Benz.
Then the International Cricket Council came calling, accusing him of bookmaking and match fixing. Hell hath no fury like a white Chiquitta played, and all the three of his women got together, not for a ‘menage-a-quartet’ but to testify against Maurice.
Five-year cricket ban, and Odumbe was sank.
He’s moved from Runda to a flat in Kileleshwa, and sold his three ‘Beamers’ and the Benz (Assuming the show-room cars cost him a total of Sh10 million, why Maurice didn’t simply floss with a Sh2.5 million ‘Beamer’ and invest Sh6 or 7.5 million of his cheddar in his own home, we will never know).
Anyway, our concern is his women and fiancÈes, not his finances. And white chicks aren’t good for our Odumbe lad.”
I don’t care about the white mamaz, my concern is his finances!
I am consternated by how he managed to scupper resources in a relatively short amount of time-a classic case of rags to riches to rags again. Stories like these are ubiquitous and transcend ethnicity, background, sexual orientation and religion. It can happen to anyone, a sure recipe for financial ruin is of course outta control spending without regard for thrift, saving and investing in assets. Odumbe frittered a small fortune away by choosing to keep up with the wabenzi instead. Robert Kiyosaki observed that his rich dad invested in assets while poor dad invested in liabilities. The outcome of both choices is known.
Assuming that Maurice had sought wise counsel from a financial planner, how would he have fared? Lets go back to in time, to the peak of his career and assume he had that 10 million in cash.
There are numerous avenues through which an investor may choose to diversify their portfolio of assets to include but not limited to equity stocks, real estate-land, commercial and residential properties, government securities, unit trusts etc. According to a research report carried out by city villas, real estate is the most preferred form of investment followed by shares.
This would have been my asset allocation recommendation.
4.5 million—Home
500 K—emergency funds stash
500 K—Operating cash
3 million—equities
1.5 million—Vehicle
House: 4.5 million back then would get you a 3 bed house in Kilimani/Hurlingham area or a posh flat in Westlands, Lavington surbubs.
Emergencies: Its always advisable to have 3-6 months worth of living expenses set aside in a savings or money market accounts for emergency purposes.
Moti: Since jangos love to floss, 1.5 M would have got him a used 200 Merc or 5 series Beemer so that he can go toe to toe with the best of them.
Investments: Equities were completely undervalued at the time. The NSE index was roughly at 1500 and although GDP growth was at 2% and interest rates hovering in the 20% range, certain sectors of the economy were still thriving eg Banking.
How would he have fared using this approach:
Property values have since sky rocketed. According to the national property index report, some areas in Nairobi have seen 100% price appreciation due to rising demand and short supply. Three bedroomed flats in Kilimani, Lavington, Westlands are now going for 6.5-11 million Ksh!
The NSE has been one of the world’s best performing stock exchange. According to Standard and poor’s, the Index rose 787% in dollar terms from 2002 to 2007. $1 dollar invested in 2002 would equal $787 at the beginning of 2007!
Odumbe Then>>>>>>>>>>> Odumbe Now
4.5 million House>>>>>>>>> 7.5 Million
3 million invested in the NSE >>>>>23.61 Million
Change in Net worth:
20.61 + 3 = 23.61 Million!! The idiot would have had a net worth of 23.61 million!! Today, he close to nada.
In the words of Ben Franklin, wealth is created by industry and frugality. Save, Plan ahead, buy assets which grow in value or produce income not liabilities which loose value and reduce income. Unfortunately for Maurice, the lesson is a bitter pill to swallow but what better way to learn than from experience huh mate?
Sunday, September 23, 2007
The Parable of Diversification
He that resteth upon gains certain shall hardly grow to great riches; and he that puts all upon adventure, doth oftentimes break and come to poverty: it is good therefore to guard adventures with certainties that may uphold losses. -Sir Francis Bacon
Diversification is a portfolio management strategy designed to hedge against risk by investing in different asset classes such as stocks, bonds, mutual funds, real estate and precious metals, which are negatively correlated i.e unlikely to move in the same direction. Because different classes of assets move up and down in value at different times, the goal of diversification is to reduce exposure to risk in any one asset class which allows for less volatility and more consistent performance under different economic conditions.
Systematic risk, the risk inherent in the market due to factors we can’t control can never be diversified. On the other hand, diversification eliminates the other kind of risk, unsystematic risk-the risk specific to an individual stock.
Granted that spreading your eggs limits both the upside and the downside potential; a diversified portfolio will however ensure a sustainable long term growth strategy and benefit investors over the long run over holding individual stocks.
It is not just enough to diversify; an investor must ensure that their portfolios are optimized by picking securities that have the highest projected rate of return for their given level of risk. This philosophy is derived from the modern portfolio theory that is widely in use today by money managers.
The parable of diversification.
In early 1975, a man called jack wins $200,000 in a lottery. He decides to invest his windfall conservatively because 1973 and 1974 were terrible bear markets, he opts for purchasing long term government bonds.
In 1979, interest rates skyrocket, and the value of his bonds plunges to $144,000. Well, he decides, I’m going to get out of the bond market and cut my losses. But what to do now? He remembers that gold was selling for $35 an ounce in 1972; today It’s almost at $800 an ounce. Moreover, he just heard someone on the radio predict that it will soar to $2,000 an ounce so he decides to buy 180 oz of gold with his $144,000.
Now the year is 1982, and gold has fallen to $300 an ounce. Jack sells his gold and has only $54,000 left of his lottery winnings, but this time he’s going to be smart. In the early 1980’s, he knows, the only investments that have performed well are oil & gas and real estate. As jack sees it, only one investment makes sense. He decides to buy a condo in Houston. He locates a $200,000 condo and puts $54,000 down and takes out a mortgage of 146,000.
The years pass and it’s 1987. He’s paid his mortgage down to $110,000 but Houston’s real estate prices have crashed and his condo is only worth $120,000. jack decides to cut his losses. He sells the condo for 120,000, pays off his $110,000 mortgage and moves out of Houston with his remaining $10,000.
It’s now 1995 and jack is living in Silicon Valley. Everyday, he hears stories of this thing called the internet. He decides to invest his remaining $10,000 in a mutual fund, the extremely aggressive all internet fund.
By early 2000, we find jack thinking early retirement-his mutual fund is up 50% just in the past month! Given very strong returns, his fund is now worth $80,000!! But then the dot com bubble bursts and his fund looses over 95% of its value in the next two years. Jack has just $4,000 left. But he keeps telling himself: all I need is one good investment”
The moral of jack’s story: diversify, diversify, diversify!
This is what would have happened if jack had diversified his winnings. If jack had invested in :
25% real estate
25% Gold*
25% small cap stock
25% long term bonds
For the period from 1975 to 2000, his portfolio would have been worth $3,245,524
*Gold index inception: May ,1985
Friday, September 21, 2007
Siasa mbaya, maisha mbaya!
I recieved this foward from a friend-The author is famed columnist and management consultant Sunny B. The article presents a rather clear illustration of the malefic political time-warp we are bound in, even without analyzing the ulterior motives which drive the rampant political horse trading that charactarizes the murky game of politics ultimately feeding on the gullible and oft venerable mwanainchi.
Let's have a history lesson for the youngsters this Sunday.
In the 1980s, Daniel arap Moi and Mwai Kibaki led the same government. In the 1990s and in 2002, they were on opposite sides, and vociferously so. In 2007, they are together again, praising each other's statesmanship. In the 1980s, Moi and Kibaki were leading the government that was routinely> locking up Raila Odinga. In the 1990s, Moi, Kibaki and Raila were all on different sides.
Before 2002, Raila was with Moi against Kibaki. In 2002, Raila was with Kibaki against Moi, endorsing him with his famous 'Tosha' cry against Moi's chosen successor, Uhuru Kenyatta. In 2005 Raila led the constitutional referendum vote against Kibaki, with Moi's support. In 2007, Raila is Kibaki's main challenger for the presidency. Moi is on Kibaki's side. In 2002, Uhuru Kenyatta was pitted against Kibaki and Raila. In 2005, he was with Raila but against Kibaki.
In 2007 he has left Raila and looks set to join the Kibaki camp. In the 1990s, Kalonzo Musyoka was firmly with Moi and Uhuru, fighting Raila and Kibaki. In 2002, he was with Raila and Kibaki, fighting Moi and Uhuru. In 2005, he was with Moi, Raila, and Uhuru, fighting Kibaki. In 2007, he appears to be fighting Raila, Kibaki, Uhuru and Moi. In the 1990s, Musalia Mudavadi was firmly with Moi, Kalonzo and Uhuru, fighting Raila and Kibaki. In 2002 he was with Moi and Uhuru against Raila, Kalonzo and Kibaki. In 2005 he was with Raila, Kalonzo, Uhuru and Moi, fighting Kibaki. In 2007, he is with Raila, fighting Kalonzo, Kibaki, Uhuru and Moi. Do I need to carry on? You get the picture, young ones.
This is the matatu race called Kenyan politics. Every so often, a few leaders climb aboard a matatu together and paint it in bright colours. They join other equally loud> and garish matatus in a race around a circular race track. The music begins. After some time, the matatus come back round. Race viewers now note that some leaders have jumped to a different matatu with different fellow passengers. Nevertheless, they are waving at you with great gusto, and you are waving back. Why should they be doing this? There is one reason, and one reason only. There is no principle at work here. The only thing driving every one of these people is the need to take power. Why do you pull other people onto the matatu with you? Only because they can help you win the race. If they can't, you push them off, or jump onto another matatu yourself. When you are thrown off, you run alongside, throwing stones until you get tired. Then you sit down and wait. Another matatu will be along soon.
I wrote last year: 'Our parties cannot even be called institutions in any sense. They have no structures, no procedures that anyone respects, no elections that they bother to hold, and no vibrant membership that puts any pressure on them. They are matatus, decrepit vehicles that carry the ambitions of a few bigwigs whilst not caring two hoots for legality..The people on the party political matatu do not own it and do not care for it. They do not invest money in it, and they do not maintain it. They have no idea whether its engine is sound, or if the electricals are working.
They couldn't care less. It's a mere vehicle, a quick ride to riches.' If ordinary human beings behaved like this, we would consider them fickle and lacking in character. Do you make friends, drop them, befriend them, dump them when it suits you? If you did that, you would get no respect at all from society. When politicians do it, we say 'that's politics' and> accept it as normal behaviour. It's time we set our standards higher. It's time we began judging politicians by their strength of character and adherence to principle. Who has said the same thing, had the same allies, stood on the same platform and upheld the same agenda? The development race, which is not the same as the political race, is not won by loud people in loud matatus. It is won by preparing sleek and sturdy vehicles that are kept well-oiled and are maintained by the same people.
Different race-cars may take the lead at different times; but all are serious contenders and are in for the long race, not the individual lap. We can't do much about the quality of our contenders, but we can do something about the way we judge and reward them.
Stop applauding when a matatu is resprayed and appears with different passengers. Stop laughing when you see a collision in the race. Take your eyes off the political free-for-all run on the cow-field. Focus instead on the race that will take the country to second- and first-world status. The race that improves our education, our health, our livelihoods and our knowledge base is the only one worth cheering. Everything else is an irrelevant side-show. The sooner we realise it, the better.
Let's have a history lesson for the youngsters this Sunday.
In the 1980s, Daniel arap Moi and Mwai Kibaki led the same government. In the 1990s and in 2002, they were on opposite sides, and vociferously so. In 2007, they are together again, praising each other's statesmanship. In the 1980s, Moi and Kibaki were leading the government that was routinely> locking up Raila Odinga. In the 1990s, Moi, Kibaki and Raila were all on different sides.
Before 2002, Raila was with Moi against Kibaki. In 2002, Raila was with Kibaki against Moi, endorsing him with his famous 'Tosha' cry against Moi's chosen successor, Uhuru Kenyatta. In 2005 Raila led the constitutional referendum vote against Kibaki, with Moi's support. In 2007, Raila is Kibaki's main challenger for the presidency. Moi is on Kibaki's side. In 2002, Uhuru Kenyatta was pitted against Kibaki and Raila. In 2005, he was with Raila but against Kibaki.
In 2007 he has left Raila and looks set to join the Kibaki camp. In the 1990s, Kalonzo Musyoka was firmly with Moi and Uhuru, fighting Raila and Kibaki. In 2002, he was with Raila and Kibaki, fighting Moi and Uhuru. In 2005, he was with Moi, Raila, and Uhuru, fighting Kibaki. In 2007, he appears to be fighting Raila, Kibaki, Uhuru and Moi. In the 1990s, Musalia Mudavadi was firmly with Moi, Kalonzo and Uhuru, fighting Raila and Kibaki. In 2002 he was with Moi and Uhuru against Raila, Kalonzo and Kibaki. In 2005 he was with Raila, Kalonzo, Uhuru and Moi, fighting Kibaki. In 2007, he is with Raila, fighting Kalonzo, Kibaki, Uhuru and Moi. Do I need to carry on? You get the picture, young ones.
This is the matatu race called Kenyan politics. Every so often, a few leaders climb aboard a matatu together and paint it in bright colours. They join other equally loud> and garish matatus in a race around a circular race track. The music begins. After some time, the matatus come back round. Race viewers now note that some leaders have jumped to a different matatu with different fellow passengers. Nevertheless, they are waving at you with great gusto, and you are waving back. Why should they be doing this? There is one reason, and one reason only. There is no principle at work here. The only thing driving every one of these people is the need to take power. Why do you pull other people onto the matatu with you? Only because they can help you win the race. If they can't, you push them off, or jump onto another matatu yourself. When you are thrown off, you run alongside, throwing stones until you get tired. Then you sit down and wait. Another matatu will be along soon.
I wrote last year: 'Our parties cannot even be called institutions in any sense. They have no structures, no procedures that anyone respects, no elections that they bother to hold, and no vibrant membership that puts any pressure on them. They are matatus, decrepit vehicles that carry the ambitions of a few bigwigs whilst not caring two hoots for legality..The people on the party political matatu do not own it and do not care for it. They do not invest money in it, and they do not maintain it. They have no idea whether its engine is sound, or if the electricals are working.
They couldn't care less. It's a mere vehicle, a quick ride to riches.' If ordinary human beings behaved like this, we would consider them fickle and lacking in character. Do you make friends, drop them, befriend them, dump them when it suits you? If you did that, you would get no respect at all from society. When politicians do it, we say 'that's politics' and> accept it as normal behaviour. It's time we set our standards higher. It's time we began judging politicians by their strength of character and adherence to principle. Who has said the same thing, had the same allies, stood on the same platform and upheld the same agenda? The development race, which is not the same as the political race, is not won by loud people in loud matatus. It is won by preparing sleek and sturdy vehicles that are kept well-oiled and are maintained by the same people.
Different race-cars may take the lead at different times; but all are serious contenders and are in for the long race, not the individual lap. We can't do much about the quality of our contenders, but we can do something about the way we judge and reward them.
Stop applauding when a matatu is resprayed and appears with different passengers. Stop laughing when you see a collision in the race. Take your eyes off the political free-for-all run on the cow-field. Focus instead on the race that will take the country to second- and first-world status. The race that improves our education, our health, our livelihoods and our knowledge base is the only one worth cheering. Everything else is an irrelevant side-show. The sooner we realise it, the better.
Wednesday, September 19, 2007
Don't rejoice just yet....
The Feds decision yesterday to slash the funds rate to 4.75% from 5.25% was applauded by many and buoyed the indices sending the Dow up 336 points!
The funds rate is the rate at which depositary institutions lend money to each other and oft used to control the available supply of funds thus influencing interest rates on both commercial and consumer loans.
That the decision by the FOMC was anonymous tells us that they finally realized making a preemptive move to forestall a recession was much smarter than waiting for the worst then using a series of financial fibulators thereafter in an eleventh hour attempt to jolt back the economy to life. What difference a month can make, during their last meet, economic weakness took a back seat to inflationary pressures which they still have to deal with now that they have loosened up the supply of money.
I expected 25 basis points and a statement littered with fed jargon that leaves room for more cuts in future meetings based on careful introspection of the now manifest hazards borne from careless lending standards whose effects we are reeling.
In cutting the all important rate, the Fed choose to deal with the larger evil, thwarting a recession that was caused by lenders with loose credit standards who primed their balance sheets by charging high rates and packaging exotic mortgages to the hoi polloi borrowers who were plagued with poor credit and otherwise afford homes. In my opine, it is not the job of the central bank to bail out speculators and greedy banks but rather maintain sound fiscal and monetary policies with an aim of ensuring growth while balancing inflation.
I guess since the credit mess was going to trickle down and start nibbling away at the economy, especially since consumerism is the key driver for growth-Well, when people are at risk of or loose their homes, they can no longer use them as ATM’s or feel comfy about future prospects, budgets are ultimately tightened and that lack of spending will eventually hit most sectors of the economy hard thus slowing growth rates and earnings. Alarm!
In the short term the rate cut will help the hoi pollioi, who took out ARM's, breath easy because payments will adjust downwards in tandem with the interest. in the long run, housing still remains weak. Individual home builders say it’s too soon to know when conditions will begin to pick up again. On Tuesday, the NAHB reported that its index of builder confidence fell in September to the lowest level on record! At an investor conference on Tuesday, Robert Toll, Chairman of Toll brothers (TOL) said its too early to call a bottom just because of the rate cut. Ultimately, the governors have provided a much needed psycological boost for consumers and investors but housing fundamentals still remain weak.
So giddy up Uncle Ben, but be careful of the “moral hazard”. This is a condition economists attribute to chopping away at the rates too quickly which would lead to a re-pricing of risk and consequently incubate favorable conditions that led to this credit squeeze.
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