The Pained Trader: what a Croc

The Pained Trader’s emerging markets never quite emerge.

  • By The Pained Trader
  • 23 Nov 2017
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Now, that, America, is how you get rid of a mad, old president. 


While Robert Mueller plods laboriously on with his endless investigation into Donald Trump and the Russians, the Zimbabweans led the way and showed the Americans exactly how it’s done by threatening a judicial reckoning and managing to jettison their own senile fool in less than a fortnight.

Given the obvious decrepitude and near narcolepsy of the nonagenarian Mugabe, though, I think a coup could have been successfully orchestrated by simply not waking him up from his daily nap or pushing him into a cupboard and closing the door.

When the end came for Mugabe it was like getting drunk or going bankrupt: very slowly at first but then all at once.

I don’t want such a swift despatch for Trump; I want his demise to be protracted and the concessions drawn out in tiny increments until the final, violent catharsis when, heavily-sedated and straitjacketed, he is stretcher-borne from the White House.

Analogies between Trump and Mugabe are easy to draw: dotards, narcissists, megalomaniacs, anti-democrats both and, of course, bizarrely coiffured —although in the instance of Mugabe the offending hair was not the small woodland creature that sleeps on Trump’s head but the toothbrush moustache, emblem of evil, which forested his philtrum and always made it seem as though he had contracted an especially virulent dose of herpes.

Who trumps whom?

The similarities between Mugabe and Trump are legion but I think when it comes to wit, the African probably had the edge.

This is a man capable of a level of gnomic utterance to which Trump could never aspire: “When one’s goat goes missing, the neighbour’s soup smells of suspicion.” 

Mugabe himself was above all suspicion, however.

He once won a state lottery for a prize of of Z$100,000 organised by the state bank, the chairman of which drily noted, “Master of ceremonies Fallot Chawawa, [no joke] could hardly believe his eyes when [he] picked the jackpot ticket and saw His Excellency RG Mugabe written on it.” 

I’ll bet.

Unfortunately, those Zimdollars were depreciating faster than he could spend them, because his surreal interpretation of Marxist-Leninist economics precipitated hyper-inflation and economic collapse in a way that made the Weimar Republic look like Switzerland.

Mugabe oversaw a 99% depreciation in the currency, the printing of a Z$100tr bank note; 90% unemployment and inflation (and, in July 2008, of 231,000,000%). Venezuela’s president, Nicolás Maduro, looks like John Maynard Keynes in comparison. The British electorate should pay close attention to Mugabe’s economic template, because I think Comrade Corbyn has something similar in mind for us.

Rather surprisingly, considering the wealth demolition which has taken place, the Zimbabwean stock market has taken a dim view of Mugabe’s ousting and has fallen about a third since the political turbulence began. If that seems a little ungrateful, I suppose one could argue it had rallied about 300% earlier on this year and the Zimbabwean exchange has never had a reputation for accurately reflecting the country’s economic fortunes.

It’s a fairly relaxed regime down there on the floor in Harare. They only open for a couple of hours in the morning and even then they may not bother if someone has forgotten the chalk.

This represents a development from the 1990s, though, when a friend of mine went to Zimbabwe to look into opening a brokerage firm. He abandoned the project when he discovered a few white farmers opened the exchange every other Wednesday after lunch for 15 minutes.

Where the wild things are

Is now the time to revisit the wilder shores of frontier markets?

You know me: I’m always on the lookout for an escape route from this endless stuffing of chickens and polishing of turds. I can only withstand this daily waterboarding at my desk if I think there’s a stockmarket somewhere in which I might operate happily and profitably.

The City, on the eve of MiFID II, is no place for a pioneering broker and those of an entrepreneurial bent are deserting the Square Mile like rats from a sinking ship. I wrote recently about the possibility of relocating to NEOM, Saudi Arabia’s megacity and business zone in the desert, but perhaps Zimbabwe offers the chance to make your fortune without running the risk of public flagellation if you’re caught with a crafty hip flask.

The only problem with opening Zambezi Securities is that with three-quarters of the population earning $5 daily, there is not the limitlessly credulous and perennially excitable retail investor base required to churn and burn. Asia has an inexhaustible supply of enthusiastic punters keen to gamble recklessly and get rich or go broke trying. This does not apply in Africa.

I’ve operated in emerging markets almost as long as — but less successfully than — Robert Mugabe governed Zimbabwe.

Experience, painfully accumulated, tells me the present moment probably represents peak optimism. I recall idealist investors piling into Ukraine in the immediate aftermath of the Orange Revolution in 2005, and look how that ended.

The touted successor to Mugabe, ‘Crocodile’ Mnangagwa is not a champion of free market economics and liberal democracy. He may be more open to capitalism than Mugabe (and John McDonnell for that matter) but I suspect what he thinks of as free enterprise and laissez-faire government, we would call kleptocracy.

Emerging markets never emerge. The term is almost always an oxymoron. Better must come but worse comes first. I have a highly sophisticated black box trading algorithm for the asset class, back-tested into oblivion.

It has one input: hope.

It has one output: despair.

Limpopo Capital Management is a lovely concept but it will never happen.

Thanksgiving is a big afternoon on the hit-and-miss in the City and heralds the start of the holiday season, and this is the last such before the MIFID apocalypse lays waste to the industry.

Walking out for my boozy lunch this afternoon, I sensed an elegiac note in the psithurism along Gresham Street. We shall never hear its like again. Or, you might. I won’t.

I think because of this fin-de-siecle feeling, this season the City will yield itself up to revelry with unprecedentedly gay abandon. I shall do the same.

Between the revolution and the firing squad, there is always time for a glass of champagne. Santé!

  • By The Pained Trader
  • 23 Nov 2017

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 416,634.23 1594 9.03%
2 JPMorgan 379,647.36 1732 8.23%
3 Bank of America Merrill Lynch 359,625.73 1304 7.80%
4 Barclays 267,126.92 1079 5.79%
5 Goldman Sachs 267,110.09 921 5.79%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 HSBC 45,314.03 193 6.64%
2 Deutsche Bank 37,536.19 138 5.50%
3 BNP Paribas 36,532.54 211 5.36%
4 JPMorgan 34,490.59 115 5.06%
5 Bank of America Merrill Lynch 33,700.87 110 4.94%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 JPMorgan 22,398.41 104 8.66%
2 Morgan Stanley 19,092.40 102 7.38%
3 Citi 17,812.08 111 6.89%
4 UBS 17,693.89 71 6.84%
5 Goldman Sachs 17,256.05 98 6.67%