Chinese government company looking to build and rebuild in Karbala
The Chinese governmental company (CCCC), specialized in road and infrastructure works, discussed with the Governor of Karbala, Nassif Al-Khattabi, construction and reconstruction in the province.
Al-Khattabi said in a statement to (Al-Mustaqlia) after his meeting with the Chinese government company, we discussed “the extent to which Chinese government companies can contribute and participate in the construction and reconstruction campaign within the governorate’s reconstruction plan for the year 2023 to 2025.” link
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(Vietnam) Central bank joins regional payment connectivity expansion | Vietnam+ (8/25/23)
(Vietnam) Central bank joins regional payment connectivity expansion | Vietnam+ (8/25/23)
Jakarta (VNA) – The State Bank of Vietnam (SBV), has officially joined the Regional Payment Connectivity (RPC) initiative.
The recent development is an expansion of the Memorandum of Understanding on Cooperation in Regional Payment Connectivity (MOU RPC) initiated by the central banks of Indonesia, Malaysia, Philippines, Singapore, and Thailand on the sidelines of the G20 Leaders’ Summit on 14 November 2022 in Bali.
On the sidelines of the 10th ASEAN Finance Ministers’ and Central Bank Governors’ Meeting (AFMGM) on August 25 in Jakarta, Vietnam's central bank signed the Supplemental Pages of the MOU RPC.
The RPC initiative was established to strengthen and enhance collaboration on payment connectivity through the development of faster, cheaper, more transparent, and more inclusive cross-border payments.
According to the MoU, member central banks agreed to promote cross-border payment connectivity based on the application of such payment methods as QR Code, instant payment, and other payment models, as well as cooperation in monitoring and building a sound risk management mechanism in line with the legal framework of member countries. Mechanisms for implementing MoU include dialogue, monitoring, evaluation, and information exchanges.
Within the framework of the Working Group on the ASEAN Payments System (WC-PSS), the members highly appreciated this initiative of the five ASEAN central banks (ASEAN5) and encouraged the participation of ASEAN members.
Appreciating the potential benefits and opportunities from the initiative, the SBV coordinated with ASEAN5 central banks to complete the procedures to officially become the 6th member of the MoU, which demonstrates its commitment to cooperation and integration in the payment field, in line with the orientation of the Vietnamese Government and central bank as well as the current trend of promoting cross-border payments.
FIREFLY: My bank friend said he’s thinking we’re going to see a move either to around 1138 or an even 1000 very shortly from what he’s getting…
FRANK: I believe him…I believe him to be ready to greet you into the banks very soon…
FIREFLY: We seeing we rank 5th in the world in oil reserves and yet we have a program rate
?
FIREFLY: Our government is saying USA defense interest is secured in Iraq for the first time since 2003. Wow! That's when we were at 1 to $3. Iraq agrees on the troops being here in Iraq. I guess Sudani wants you guys here...this is a win-win for all of us.
Global Currency Reset: The Global Currency Reset appeared to be announced on Tues. 22 Aug. 2023 when the BRICS Summit launched BRICS Pay, a decentralized multicurrency digital international payments system.https://www.brics-pay.com/.
Fri. 25 Aug. TNT Call: The three letter agencies are at the highest level of alert possible for the RV. The majority that it will be this weekend or sooner. The Iraqi government has until tomorrow to open the budget. Many people in powerful positions were arrested in Iraq this week.
Fri. 25 Aug. MarkZ said tonight that he has heard that a couple of humanitarian projects have received full funding and are slowly rolling out.
Thurs. 24 Aug. Bruce: Bond Holders were told by authorities in Switzerland that they would be notified Friday 25 Aug. and get access to funds on Saturday 26 Aug.
Tier4b (Us, the Internet Group) should be notified to set exchange/redemption appointments Saturday 26 Aug. or Monday 28 Aug. at the very latest. Within 24 hours of Trump’s arraignment the RV should be started – or by Fri. 25 Aug. 7:00 pm EST
Charlie Ward said that Tier4b would be able to exchange foreign currencies and redeem Zim Bonds after that Global Currency Reset was announced.
Shelton Levert said that Paymasters would start paying Tier3 after the BRICS Summit ended on Thurs. 24 Aug.
Wolverine claimed that on Fri. 18 Aug. Wells Fargo Bank received the cash release codes and the global launch of the funds took place across the Planet, marking the beginning of the registered global asset redemption program.
During this period we have learned that the CBI is targeting a new revalued rate for the dinar of 1132 from 1320 and very soon.
Already they issued a new rate for foreign travel of 1305 to the US dollar.
Is this the last rate change we are looking for prior to the 1:1 coming revaluation and triggering the project to delete the zeros?
If you can remember that on August 1, 2023 article, the Prime Minister, Muhammad Shia’ al-Sudani, described the crisis of the rise in the exchange rate of the dollar against the Iraqi dinar in the local markets as a “battle” not a crisis.
Al-Sudani said and I quote- “The battle of the dollar is between the state, which insists on completing the reform of the financial and banking system and we are going to win the battle”.
So, then an article came out on this past Wednesday August 23, 2023, they are telling us that the Parliamentary finance committee determined a way to reduce the exchange rate of the dinar.
It stressed the implementation of a number of measures in order to reduce the exchange rate of the dollar, whether they are technical or related to the central bank and its procedures.
Committee member Mueen Al-Kazemi said, according to the official newspaper and I quote – “that the important factor for the decline in the dollar exchange rate is the simplification of the central bank’s procedures for merchants to urge them to resort to the currency window and not go to the parallel market that caused the high exchange rate, in addition to simplifying the procedures for granting sums to Iraqi travelers.”
Instead of using the current method.
They then added that another problem that must be discussed with the US Federal Reserve regarding the countries from which the Iraqi merchant imports and does not grant a transfer to them using the new electronic system, given that there is a national interest and need for the Iraqi people with these import vendors.
In other words they need to have the electronic system updated to include these countries.
This way more of the dollars can be accounted for and traced, if in fact they are needed to pay debts to these countries.
It appears they may be finally getting to the root of the problem in order to obtain positive results in reducing the exchange rate of the dinar (which we know means to increase its value closer the real value it should be in the first place. )
We know the value of the dinar is now being artificially suppressed.
Last Thursday (August 17, 2023), the Parliamentary Finance Committee identified the features of ending what it called “dollarization” in the local markets, in reference to the dollar exchange rate crisis, indicating that 80% of the solutions are internal, not external.
Sounds to me like the crisis is just about over, if not over, and they just need to tie up some lose ends.
Is Iraq now de-dollarized enough for stability to move to the next stage of the currency reform process?
I first heard it when I read the 2011 Dr Shabibi plan for the reinstatement process.
He told us then that the de-dollarization is critical in Iraq’s currency reform process.
So, it sounds to me like this phase of the Dr Shabibi plan is ending and they are moving to the next stage of the process.
Update on the Oil and Gas Law:
Last Friday, the representative of the State of Law Parliamentary bloc, Firas Al-Maslamawi, revealed the Oil and Gas laws are to be legislated in Parliament in the coming period.
We have heard this before and so what does the “coming period” mean.
Could it be days, weeks or months?
But to say this means they are very close.
Al-Maslamawi said, “The priority of the presidency of Parliament and the House of Representatives is to legislate the Oil and Gas laws as sent by the government, and they are in the second stage of proposals, and it will end soon”.
I believe the holdup is with the negotiations with Turkey on the operation and maintenance of the northern oil pipeline.
Do you remember this is the “White Paper”?
So, I am reminding everyone once again that this is their path to FOREX.
Are they there yet?
Are we reaching the proverbial vortex of triggering what we want, the RV?
Yes, and we should be very happy at just where we are now.
Since January of this year the main push has been banking reforms and de-dollarization.
It has taken longer than we as investors want, but if you read between the lines in today’s news it says they are moving to the next phase of the plan.
When they move to the next phase of the process it will have to be the project to delete the zeros.
Just a couple weeks ago Ali Alaq, the CBI governor, told us this project is NOT OFF THE TABLE which means also everything else that follows it.
Write, call or text your representatives of how dissatisfied you are with the justice being done in the US about the Biden corruption and where is the justice when they have a double standard of justice.
Where is the punishment for his crimes and of those who surround him?
I believe in this regards that September thru December are going to be huge for straightening out his mess in the US government.
As I stated many times already the VALUE and RATE of the dinar are two different issues.
Yes, the RATE should reflect a true VALUE but it does not today.
They know it and we know it.
Iraq does not have to rebuild their economy for the rate to change accordingly as the value is already present, just with the resources they can now exploit and sell.
Once they do rebuild Iraq cities and grow their economy the dinar should also then adjust its rate and go even higher as thy plan to put it on a FLOAT when it is reinstated.
No, it is not possible to float the dinar starting at the program rate.
Kuwaiti does not export even 1/3 of the oil that Iraq does nor is the oil as rich as their oil needs more refining.
Kuwait has very little exports and Iraq alone will very soon catch up to them without even trying.
So why does the IMF and the US still hold back the liberating of the Iraqi dinar?
I will tell you why – It is nothing more than “blackmail” and a “corruption” scheme that is shortly coming to an end.
They need to keep Iraq under their thumbnail and suppressed.
They need them as a puppet state not as an independent and sovereign nation.
The CIA reported almost a decade ago as it stated that Iraq would be “a detriment to security of the middle east, should it ever become independent and wealthy state”.
So, go figure what is happening just by this statement alone.
They can’t hide it .
We only need to use our God given brains to see through this mascaraed.
Don’t you think the Iraqi citizens and politicians see it too?
I know, I know, I give you other possible scenarios but these are just developments in the craziness of goals set for Iraq to obtain.
These goals should not be something that holds them back.
There are other carrots that can be dangled and used to help push them along.
They are a very young democracy and they will make mistakes.
But they must also learn from the mistakes and to be a self-governing after nearly 20 years past since 2003, it is about time.
Not having an international currency is serious and we can clearly see it is impacting all aspects of Iraqi life.
It is time to liberate the dinar.
The CBI knows it as the citizens know it, as we investors know it.
Stocks have enjoyed a very positive run this year. Driving this shift, in sentiment, appears to be optimism about Fed policy and a corporate earnings picture that is far better than many feared.
Many in the market justifiably see the Fed moving towards concluding its extraordinary cycle in the next few months. Improved visibility on this front has prompted many in the market to buy quality stocks at discounts. This narrative is sanguine about the Fed, sees inflation as steadily heading in the right direction and views nothing egregious with valuations, given improved visibility for interest rates and a stable earnings outlook that has smoothly adjusted lower.
Market bears see this emerging optimism in the market as without a solid basis and view the positive stock market gains of recent days as nothing more than a bear-market rally in a long-term downtrend. This line of thinking sees inflation as far ‘stickier’, which requires the Fed to continue tightening for a while. Valuation worries also figure prominently in the bearish view of the market.
The interplay of these competing views will determine how the market performs in the coming months and quarters. To that end, let’s examine the landscape of bullish and bearish arguments to help you make up your own mind.
Let's talk about the Bull case first.
Inflation & the Fed: The outlook for inflation and what that means for the path of interest rates and economic growth represent the biggest points of difference between market bulls and bears at this point in time. The bulls see favorable developments on the inflation question, with the steadily decelerating trend of the last many months as confirmation of progress towards the Fed’s goal. We saw proof of this in the internals of the recent Q2 GDP report and consensus expectations for the coming periods.
It is hard to argue with the bulls’ view that the heightened post-lockdown demand in a number of product and service categories was bound to eventually normalize, with its attendant beneficial effect on prices. Related to the above argument are favorable developments on the supply side of the equation and reversal of China’s zero-Covid policies, with continued disruptions caused by the war on Ukraine partly offsetting the gains.
With interest rates already at or past the neutral level, investors are looking at incoming economic data through the prism of what it tells them about inflation and growth. The market correctly sees the Fed’s July 26th rate hike as effectively concluding this tightening cycle even though the central bank can’t publicly acknowledge it.
In other words, we are at the ‘pivot’ stage already, without the Fed explicitly telling us in so many words. After the July 26th hike, they will be 25 bps away from their indicated peak rate, meaning at most one more increase at the following meeting.
The stock market optimism in recent months, that has been reinforced by the reassuring Q2 earnings results, is likely an early attempt to do just that.
Continued . . .
The Economy’s Strong Foundation: The seemingly strong Q2 GDP report notwithstanding, the U.S. economy’s growth trajectory has shifted gears in response to the combined effects of aggressive Fed tightening, the runoff in the government’s Covid spending and some lingering logistical bottlenecks. This is beneficial to the central bank’s inflation fight, particularly the demand-driven part of pricing pressures, as we saw in the decelerating trend in the Q2 GDP report’s price deflator reading.
Many in the market are legitimately concerned about recession risks as a result of the unprecedented Fed tightening. While such risks are undoubtedly real, a recession is by no means the only, or even most likely, outcome for the U.S. economy. Underpinning this view is the rock-solid labor market characterized by strong hiring and a record low unemployment rate. It is hard to envision a recession without joblessness.
The purchasing power of lower-income households has likely been eroded by inflationary pressures, as confirmed by a number of companies during their earnings calls. But household balance sheets in the aggregate are in excellent shape, with plenty of savings still left from the Covid days. This combination of labor market strength and ample savings cushion should help keep consumer spending in positive territory in the coming quarters.
While questions remain about the economy’s growth trajectory over the next few quarters, estimates for the current period (2023 Q3) have been going up lately and currently represent a modest acceleration from the first half’s pace.
All in all, the strong pillars of the U.S. economic foundation run contrary to what are typically signs of trouble ahead on the horizon.
Valuation & Earnings: Tied to the economic and interest rate outlook is the question of stock market valuations that still remain attractive after the gains in the first half of the year.
The S&P 500 index is currently trading at 20.1X forward 12-month earnings estimates, up from 15.5X at the end of September 2022, but down -12.1% from the peak multiple of 24X some time back. It is hard to consider this valuation level as excessive or stretched, particularly given aforementioned optimism on the Fed front.
Granted there are parts of the market that have gotten rerated as the full effects of the Fed’s tightening cycle have diffused into the economy, resulting in cooling consumer and business demand and moderating economic growth. But not all sectors are exposed to the Fed-centric negativity in outlook to the same degree, as sensitivity to interest rates and the macroeconomy are much bigger drivers for some sectors than others.
We have been seeing this bifurcation in earnings outlook in recent earnings reporting cycles, including the ongoing Q2 earnings season, with operators in the at-risk sectors unable to have adequate visibility in their business. But there are many other companies that continue to drive sales and earnings growth in this environment.
We have seen many of these leaders from a variety of sectors and industries, including Technology, come out with strong quarterly results in recent days.
Contrary to fears ahead of the start of the Q2 earnings results, the actual results are turning out to be fairly stable and resilient. Earnings estimates came down steadily after peaking in April last year. The latest development on the revisions front has been a notable stabilization since the start of Q2, with estimates for a number of key sectors including Technology actually reversing course and starting to go up again.
While it is reasonable to expect some further downward adjustment to estimates for macroeconomic reasons, the overall earnings outlook is now largely in-line with the economic ground reality. In the absence of a nasty economic downturn, the earnings picture can actually serve as a tailwind for the stock market in an environment of diminishing Fed uncertainty.
Let's see what the Bears have to say in response.
Endemic Inflation & Fed Tightening: The recent Q2 GDP report showed that the U.S. economy was still far too strong to ease the Fed’s inflation worries. While a big part of the strong ‘headline’ GDP growth number was due to factors that tend to be volatile, the report nevertheless showed plenty of strength in household and business spending.
The decline in inflation readings in recent months has resulted from pullback in commodity prices, the easing of logistical bottlenecks and moderation in demand for the ‘goods’ part of the economy. The much tougher part of the inflation fight is on the ‘services’ side of the economy. Given ongoing trends in wages, inflation is likely a lot stickier than most people assume.
Many in the market believe that the Fed’s tough policy stance last year was meant to counteract the damage to its inflation-fighting credentials as a result of its earlier ‘transitory’ narrative. Given this, the central bank simply can’t afford to declare a premature victory and risk the inflation scourge to reemerge.
The Valuation Reality Check: A big driver of the stock market’s earlier bull run was the Fed’s ability to flood the market with liquidity. The central bank achieved that by keeping interest rates at zero and buying a boat-load of U.S. treasury and mortgage-backed bonds that expanded its balance sheet to almost double the pre-Covid size.
Fed tightening and the associated higher interest rates have a direct impact on the prices of all asset classes, stocks included. The ‘higher-for-longer’ view of interest rates in light of much stickier inflation means that investors need to adjust to an extended period of above-average interest rates.
Everything else constant, investors will be required to use a higher discount rate, a function of interest rates, to value the future cash flows from the companies they want to invest in. This means lower values for stocks in a higher interest rate environment.
The Growth Question: Since Fed rate hikes work with a lag, the central bank’s aggressive tightening moves since March 2022 likely haven’t fully seeped into the economy.
Current projections of GDP growth for this year assume that the Fed is successful in executing a ‘soft landing’ for the U.S. economy. This favorable view has been strengthened by resilient GDP growth readings even as inflation has steadily come down.
There is no basis for us to doubt this confidence in the central bank’s abilities, but we shouldn’t lose sight of history that tells us that economic growth typically falls victim to the Fed’s inflation-fighting efforts.
A handy metric to keep an eye on for growth outlook is the spread between the 2-year and 10-year treasury bond yields. Inversion in this metric, as is the case at present, will suggest the need for reigning in growth expectations.
Where Do I Stand?
I am very skeptical of the bearish Fed tightening outlook and see this scenario as nothing more than a worst-case or low-probability event.
My base case all along, saw the Fed moving from the then ‘stimulative’ policy stance to one that was only modestly ‘restrictive’. Following the already implemented rate hikes, the level of interest rates is at the ‘neutral’ policy level already, when Fed policy is neither ‘stimulating’ nor ‘restricting’ economic activities.
Estimating an accurate level for ‘neutral’ policy is very difficult in real time, but most analysts believe that we will be getting into ‘restrictive’ territory after the July 26th hike.
While the Fed has left another rate hike as a possibility, we think they are most likely done tightening at this stage, particularly if incoming data continues to show progress on the inflation front. This appears to be the most plausible scenario given the risks to growth as a result of premature tightening, a threat to the Fed’s second ‘full employment’ mandate.
The positive momentum in the stock market in recent months reflects this interpretation. The resulting stability in financial conditions and interest rates should keep the economy’s growth trajectory in place, admittedly at a moderate pace.
Regular readers of my earnings commentary know that the earnings picture continues to be resilient, with the steady downward revisions to estimates since the April 2022 peak having brought them in-line with the economic ground reality. In the coming months, the market will start looking past this year’s moderating earnings growth picture to the eventual recovery on that front.
The market’s recent positivity reflects a growing convergence to our favorable views on the Fed and the growth questions. We don’t envision these questions to be put to rest next week, but we do see investors eventually coming around to our view of inflation, earnings and the much more positive times ahead after a short period of volatility.
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Iranian Foreign Ministry: Iraq releases significant portion of frozen funds
Shafaq News / The Iranian Foreign Ministry announced on Friday that Iraq has released a substantial amount of Iranian funds that were previously frozen. This move comes as part of an agreement reached between Tehran and Washington, mediated by a third party, which involves the release of Iranian prisoners and the unfreezing of funds.
Ali Bagheri Kani, the Political Assistant to the Iranian Foreign Minister, stated to the the semi-official "Mehr" news agency that, in addition to South Korea, a substantial portion of Iran's funds was also held in Iraq.
He elaborated, "Our agreement with the American side to release Iranian funds frozen in South Korea triggered discussions about the release of Iranian funds in Iraq. The process of their release has already commenced."
Kani went on to detail, "Over the last three weeks, we have successfully unlocked nearly seven times the total funds we utilized in Iraq for economic activities last year. We anticipate this momentum to expedite further."
Earlier this month, official Iranian sources disclosed the intricacies of a mediated agreement between Tehran and Washington, involving a prisoner exchange and the release of Iranian funds frozen in South Korea and Iraq.
A source familiar with the accord reported to Iran's official news agency "IRNA", "The terms of this agreement stipulate the liberation of five American prisoners in exchange for the freedom of five Iranian detainees in the United States."
The source provided insight, noting that "in addition, approximately $6 billion of Iranian assets frozen in South Korea are set to be released, along with a substantial share of Iranian funds held in Iraq's TBI Bank." The source further indicated that "the preliminary stages for the unfreezing of Iranian assets in European financial institutions are already underway."
Furthermore, Prime Minister Mohammed Shia Al Sudani disclosed on July 11 that ongoing negotiations with the US aim to settle Iran's outstanding payments for gas imports from Iraq. The sum totals 9.25 billion euros.
Al Sudani revealed Iraq's contribution, stating, "We have already disbursed around 1.842 billion euros within the first seven months of the current government term, per our agreed-upon mechanism."
Moreover , PM Al Sudani informed that a joint delegation from Iraq's central bank (CBI) and the Iraqi Trade Bank embarked on a mission to Oman, working towards a consensus on the transfer of these funds to Oman, in coordination with the US Treasury.
