'Leke Olushuyi
@LekeOlushuyi
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Finance | Audience-oriented Writer | Upcoming Finance Bro | Tweets and threads about business, finance, and economics. Views = 100% Mine
Joined August 2022
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Once upon a time, in a faraway kingdom lived Mr Sili who owned Silicon Valley Bank(SVB).
SVB is a big bank that keeps big money for big people and businesses, especially tech businesses. SVB was a regular bank until 2019 when the unexpected happened. . .
Break down the Silicon Valley Bank debacle for me like I'm 5 years old.
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“When two elephants fight, the grasses suffer” is probably the most famous African proverb.
Perhaps, it's a prophecy mistaken for a proverb. Because Sudan’s crisis is a case of two elephants brawling. And no, I’m not joking.
Today, I tell you a tale of blood and gold.
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If you found this post a little hard to understand, get in here, let me try to explain this “ways and means” news.
So you know when you are broke, your account balance is on tomato red, and you need some quick cash urgently…You usually have someone you can go to for urgent 2k.
Tinubu Ignores CBN Investigator’s Recommendation, Writes Senate To Approve Conversion Of N7.3trillion ‘Ways And Means Revenue’ Without Assessment | Sahara Reporters
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Have you ever noticed that some rich people dress like maids when they go to the market?
This is because once the market senses an excess supply of money, it will make you pay more.
If you are a fan of simple explanations, you'd love this.
I’m still puzzled about how a country that prints its own currency can be in debt. Somebody please school me 🤷🏾♂️
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In a faraway kingdom lived a wealthy king who was called the emperor, the conqueror, the champion, and the lion.
This king cared for his people like a young man would care for his PS 5.
All was going well in that kingdom until one fateful day
Can someone explain this removal of fuel subsidy thingy to me like I’m 5?
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Four years ago, someone was signing “Otedola o lori meji o.”
But they stopped as soon as they started. I guess it didn’t take them long to realize. . .
On this Femi Otedola and Tony Elumelu matter:
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I bring you a simple explanation of the CBN bank recapitalisation exercise:
I’d cover what it means; what the CBN is trying to achieve; and what it means for you as a Nigerian and a bank customer.
Stay with me as I cook. . .
BREAKING: CBN increases capital base for mega banks to N500 billion, smaller banks N200 billion -
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Teni, Mark and Aki asked their teacher about this CBN policy and this was what the teacher said:
Sometimes, we must first visit the past in order to comprehend the present.
It’s best if we first understand what was happening in the FOREX market before this new policy.
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The recent happenings in the Israel-Palestine conflict have confirmed that the first casualty in war is truth.
The Israel-Palestine conflict has been on for decades.
And if you are trying to understand the origin of the whole conflict, this thread is for you.
Please my people what's the origin of this Israel vs Palestine war
Explain it to me like I'm 5 years old
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Victor’s business success and boujee lifestyle had always fascinated Simisola, Mr Denodeh’s daughter.
One day, Simi called Victor to ask him how he built a successful franchise, and he replied, “I’m unavailable, Denodeh Simi. Come to my office tomorrow, let's talk.”
Can someone explain how franchising works to me like I'm five years old?🤔
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To become a Dr - Degree
To become a lawyer - Degree
To become an engineer - Degree
To get a job - Degree
To govern the affairs and control the resources of 200M+ people - No degree
Nigerian Lawmakers Oppose Bill To Increase Education Qualifications Of President, Governors, National Assembly Members | Sahara Reporters
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The news of Soboma’s murder broke the heart of every Nigerian.
The nation mourned a great loss.
The occurrence added sorrow to the common man’s sapa and in a bid to restore happiness, the government printed money and distributed it to everyone.
(A thread)
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What will become of Mr Wahala who is currently on the run?
. . .To be continued . . .
Image source:
SignHouse
Fred
Was it simple to understand?
If this was clear, gift me a retweet and a follow.
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If having a quiet profile with loud achievements was a person, that person would probably be Adebayo Ogunlesi.
In case you are wondering who Adebayo Ogunlesi is and you have been looking for a summary of the BlackRock-GIP $12.5B deal, this post is for you.
BlackRock agrees to buy Adebayo Ogunlesi’s Global Infrastructure Partners for about $12.5 billion
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"Can you see my screen?"
- The one who is yet to share their screen
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Unlike most short people, “Short selling” or “short trade” is easy to understand.
Sometimes knowing the opposite of a concept makes the concept in question easier to understand.
This is why I will tell a story to explain both long trade and short trade.
Have you met Shukurah?
Please, can any finance expert explain "short selling" to me like I'm 5. Every explanation I've read online doesn't cut it for me.
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For the past two years, international and local bodies have been predicting food crisis in Nigeria.
I think the crisis is about to hit every region.
Let me try to explain (2-minute read).
World bank projects seven states in the Northern Nigeria to face severe food crisis in 2024 -
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Hi, sorry I'm a little late. The traffic was something else.
Business plan and business proposal are often used interchangeably but they are NOT the same.
I will explain the difference in a simple way.
A short thread (1-minute read)
Wats the difference between a business plan and a business proposal? 🤔
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I always appreciate readers' feedback.
Tell me - was this piece simple to understand?
Would you love to read more educative content like this? Then, don't forget to follow and retweet.
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You’ve been seeing CBN’s policies left and right and you’ve wondering, “What’s going on??”
Get in here; let me give you the layman’s breakdown you’ve been looking for.
I’d try to compress all that has happened in the FX space over the past 9 months here:
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If you found this helpful, reward me with a retweet and a follow.
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If you found this helpful, please like and repost.
Hit follow for more simple and easy to understand business, economics and finance-related content.
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In case you are wondering what’s so special about Sudan - it’s the 3rd largest producer of gold in Africa.
And just like in the movies - men pick up swords in the presence of gold
“Two fighter Amala two shege” best describes Sudan’s crisis.
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Two people were having a conversation about the prices of houses in Lagos.
The first person said, "Houses are expensive because of inflation. Cement is now twice the price of what it used to be a few years back."
The other person responded with a question I will never forget:
Semi Direct
Newly built 2 bedroom with contemporary facilities at Mogana, Elebu, Off Akala Express, Ibadan.
Just like a self-compound, the landlord stays abroad
Rent: 500k.
Agreement: 100k.
Note: Married, Christian, and not a Yahoo client is required.
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If you found this insightful and simple, gift me a retweet and a follow.
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I hope this explanation was simple enough.
If you enjoyed reading this, reward me with a retweet and a follow.
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DISCLAIMER: The Emperor and the Firewood story above is purely fictional and does NOT in any way describe the situation of any group of people whether past or present. The story is there to make the concept more understandable. That's all.
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DISCLAIMER: This piece is solely educative.
This thread contains information obtained from various sources. For those who wish to fully establish the facts of this crisis, further research is encouraged as the accuracy of this thread may be slightly less than 100%.
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What is going on in Sudan is a war between Sudan’s Army and Sudan’s Rapid Support Forces (RSF).
“Wait, Sudan is fighting itself?!”
Yes, something like that. Two military units are at war.
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It’s a whole lot and it’s too early to conclude how the crisis will unfold but as it stands, it seems this crisis will continue for a while.
Do you think there is more to this than meets the eye?
If this explanation was helpful, encourage me with a retweet and a follow.
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We must take risks!! All great men must take risks. Let's put the money in 2 – 10 years' investments. In a decade, we will be able to buy the world if we choose.”
Mr Sili was sceptical but Wahala, like most Lagos boys, was a master in the arts of persuasion.
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Was this explanation simple and clear?
If you found this helpful, reward me with a retweet and a follow.
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I made this post less than 12 hours ago and my follower count has grown by over 1k.
If you plan to make educative content and you think nobody will be interested, I want to let you know that your audience is out there.
Feel free to give it a try.
If you found this post a little hard to understand, get in here, let me try to explain this “ways and means” news.
So you know when you are broke, your account balance is on tomato red, and you need some quick cash urgently…You usually have someone you can go to for urgent 2k.
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They calculated their expected profits and said, "we will be so rich even the government would envy us." But little did they know that their “egungun” was headed for the motorway.
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Mr Wahala, his associate who rode a bicycle, gave a suggestion that was going to alter the course of the banking industry forever.
His associate coughed and said, “Let us put all this money in a long-term investment that will bring us so much money.”
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Multiple reports state that the war in Sudan can be best explained as these men(the leader of the army and the leader of RSF) fighting to be the next leader of Sudan.
In other words, it's one big power struggle.
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As it happens in every war, the first casualty is the truth. Every party tells a story that paints them as saints and it's not any different in this case.
It started on April 15, 2023, when both forces started accusing one another of attacks on their base.
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"If the houses in Lagos are expensive because of the cost of cement, were the new houses in Ibadan built with dusting powder?"
One day, I am going to write about house rents in Lagos and what is truly driving the pricing/valuation of real estate.
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Well, the government also has “someone” they go to when they need quick cash. That someone is the CBN.
So, the government can borrow from CBN through “ways and means.” Way and means sounds like a fancy term but don’t let it confuse you.
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From 2017 till 2022 W&M has been far greater than 5% of previous year's revenue.
In 2022, the W&M was over 100% of government revenue in 2021.
Meaning the government has been borrowing much more W&M than the law permits
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If you found this helpful, please reward me with a retweet and a follow.
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Sudan’s Army is headed by Gen Abdel Fattah al-Burhan while the RSF is headed by Mohamed Hamdan Dagalo, also known as Hemedti.
News from
@BBC
's website a few days ago:
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So, What’s RSF?
Sudan’s RSF(Rapid Support Forces) is a special squad in Sudan.
They receive military-like training and they even go on operations with the army. But they are distinct. It’s more or less another division of the Sudan army.
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More people started keeping their money with SVB. And by 2022, SVB’s deposit had skyrocketed and its revenue followed suit.
Mr Sili was full of smiles as more people kept bringing in money and his bank kept making huge profits.
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But the same way the person you go to for urgent 2k will never lend you more than a certain amount, there is also a limit to what the government can borrow from CBN.
At least, there should be a limit.
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This way, we are certain that we will always have cash and. . .”
(Mr Sili’s argument is valid and it’s an aspect of risk management called liquidity management).
"No, Mr Sili,” Wahala interrupted, “these 1 - 3 month investments won't allow us to make so much money.
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Mr Wahala convinced Mr Sili to invest too much money in long-term investment schemes.
(The name of this scheme is called a bond. It’s a legit scheme. All banks do it, but the problem is they invested too much in long-term investments. You will understand why soon.)
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Rumours have it that the bank will be sold to raise more money to sort out their “issues”. Some say the government will intervene.
Will the issues be solved? Will the SVB survive? What will happen to the customers? Will Mr Sili's silly choices send him to go jail?
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There you have it – Two factions of the Sudan army are at war.
If you want to know more, then, your reading continues:
In 1989, a military coup made Omar al-Bashir the president of Sudan. A man who will later rule the country for the next 3 decades.
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a democracy but till date, the transition is yet to fully happen.
Sudan thought Omar’s removal was the demise of military rule in their nation but little did they know that they were up for a masterclass on what is dead may never die.
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I hope this clarifies it for you.
If this was helpful, gift me a retweet and a follow.
You can follow this account if you are interested in reading about business and finance.
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Better put, someone who buys the same investment today will make more money than SVB who bought it two years ago.
To put it in simple terms, their investments came crashing before their very eyes. Better put, their egungun found itself in the middle of a motorway with 12 lanes.
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People who kept money at SVB started demanding their money in the same period.
SVB could actually keep the bank going if the mass panic was absent. But sadly, like Precious of Lekki, SVB’s gist was already flying and this led to a “bank run” – a situation where
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Once I reach 20k followers like this, nothing wey I no go dey explain for this app.
Even if una talk say make I explain quantum physics and time travel, I go run am.
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Section 38 (2) of the CBN Act says that “the total amount of such advances outstanding shall not at any time exceed five per cent of the previous year’s actual revenue of the Federal Government.”
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But he didn’t know that in the twinkle of an eye, his smile was going to turn upside down.
One fateful day, Mr Sili called his associates and said, “many people have kept their money with us; we can't keep this money idle. What should we do?”
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Well, what this means is that at every point in time, the total W&M must not be more than 5% of the money that the government made in the previous year.
So there should be a limit to how the government borrows through W&M? Yes there should be.
But guess what...
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“I know that a bundle of fire firewood cost five cowries. But whenever the people come to buy firewood from you, sell it to them for three cowries."
"I, the king, the emperor, the champion, and the lion will pay the remaining balance for every bundle you sell to my people."
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Many reports have called this borrowing irresponsible and illegal as it violates the CBN Act.
Now, here’s the problem with loans:
When you borrow, you have to pay back the amount you borrowed. Settled.
But that’s not all.
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The day Mr Sili feared the most was already by his corridor – the day everyone wanted their money at the same time.
Word on the street is Mr Sili had lost so much money if you are smart, go and withdraw.
The panic had begun already!
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Everyone seems to understand the dangers of fire but the dangers of water seem to be a less popular discourse.
I present to you a summary of the Titan submersible chronicles.
Perhaps, I shall begin at the very beginning.
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Mr Sili responded, “what if a large number of our customers come for their money at the same time? How will we pay them? Their monies will be locked in the long-term investment and we won't be able to pay them. Maybe we should put them in 1-3 months investments.
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DISCLAIMER:
This piece is solely educative. This thread contains information obtained from various sources.
For those who wish to fully establish the facts of this conflict, further research is encouraged as the accuracy of this thread may be slightly less than 100%.
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war is a spin-off from the US and Russia's “crisis.”
It has also been commonly said that the US and Russia are interested in two of Sudan’s major resources – gold, and control of a portion of the red sea.
Gold is money. The red sea is a good place to set up a naval base.
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In late 2022, the real “kasala” had already begun.
Remember that it is a legit scheme but the same scheme (bonds) started offering rates that were far higher than it did two years back when Mr Sili made his investment.
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What does this mean for you?
First, your funds are safe. There is no need to panic. We will likely see smaller banks merging to become big ones, big banks taking up small banks.
(Afterall, Emeka already hinted that “big banks take lil bank is the law of the…).
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everyone rushes to withdraw their money from a bank because of the fear that the bank might fail.
The government had to temporarily shut down the bank and the regulators are trying to see what can be done to salvage the situation.
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Barely two years after Omar was removed, Sudan’s Prime Minister was removed and the military took full control of power again in late 2021.
Sudan is rich in gold and it seems a military uniform is not enough to take away the lust for gold and power.
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Every year you don’t pay back, you have to pay interest on the amount you owe. And this is an additional cost. The more you borrow the more your interest cost.
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The people were happy with this single act it was giving rich and caring king vibes.
So whenever the people went to buy firewood, they paid 3 cowries for each bundle they bought and their king would pay the balance of 2 cowries on their behalf.
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Think of it as ways and means (allow me to call it W&M) of raising funds. See how
@MerriamWebster
defines it below:
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If you found this helpful, please reward it with a retweet and a follow.
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Many speculators have claimed that the US and Russia have both picked sides in this army vs RSF squabble.
And that both countries are encouraging the current Sudan crisis for selfish reasons.
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Who attacked first remains a mystery. But both forces have been trading bullets and explosives since April 15.
And many sources say it has become a battle for Sudan's control.
The Sudan army declared RSF a rebel group and RSF also declared its intention to subdue the army.
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The same also applies to W&M. There is an interest of (MPR +3%) on the W&M. MPR is the Monetary policy rate.
Meaning that if MPR is 10%. Interest on the way and means will be 13% (10% + 3%
Currently, MPR is at 18.75%. So it means way and means attract 21.75% interest.
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In 2019, Omar was removed by a coup executed by the army and the RSF.
But these forces didn’t return to the barracks afterwards. Hence, the reason for the power of the leaders of the army and the RSF.
The plan in 2019 was that the military will oversee a transition into
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But in simple terms, this is what it means:
“Hey do you want to invest? The government actually owes this amount. They don’t have it now but will in future. So come and pay this debt now, and when we finally have the money, we will pay you back, with interest of course.”
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U.S SAYS INVEST IN (BUY) THIS $10, COME BACK IN 5 YEARS, WE WILL GIVE YOU $15 INSTEAD OF THE PREVIOUS $11. MEANING THAT THOSE WHO INVESTED A FEW YEARS BACK ARE AT A LOSS RELATIVE TO THE MARKET).
NOTICE HOW RATES INCREASED IN 2022/23 IN THIS CHART
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On Saturday morning, Hamas launched surprise attacks on Israel via land, water and air. If they added fire, the world would have mistaken it for an avatar attack.
Hamas said the attack was a payback for Israel's crimes.
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when the price of firewood suddenly increased and the people couldn't afford it.
Everybody needed to cook else they would die of hunger.
And no king wants his people to die of starvation.
The king was rich so he went to all the firewood suppliers in his kingdom and said:
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Since April 15th, it’s been different shades of original “rogbodiyan” in Sudan, Especially in Khartoum – Sudan’s capital.
On April 21,
@CBSNews
estimated that this crisis had claimed over 400 lives.
If you are only interested in what’s only going on.
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Right now, the government is trying to securitise the W&M debt. I don’t want to complicate this post or make it long.
I won't explain the specifics of securitisation. Maybe in another post.
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Multiple reports have accused Sudan’s military of thirst for power and reports also confirm that this war is a war of who will rule Sudan next.
The talks of transitioning to democracy never ended in Sudan. One of the major problems of this transition was the army and the RSF.
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Let me make it easy for you to understand: If you don’t like maths, you can skip the text in uppercase. You will understand even if you skip the text in all caps.
(THE PROBLEM BEGAN WHEN THE RATES ON THE U.S BONDS INCREASED. LET ME TRY TO EXPLAIN WITH AN ANALOGY:
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I did a compilation of the old and new capital requirements here:
This capital requirement is no joke.
Some banks will find it easier to raise the capital than others.
But some small banks may have to hawk their shares in Mile 12 traffic to raise capital, no cap.
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That part that the king was paying on behalf of his people is called a SUBSIDY.
So if the emperor pays 2 cowries to balance the firewood purchase of 100 people in his kingdom one day. It means he spent 200 cowries on subsidy (2 cowries * 100 people) that day.
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I have a friend seeking for an accommodation in mainland areas in Lagos - Gbagada, Shomolu, etc
If you are moving out of a self-con or mini flat, you can DM as it will help the person.
The person is also open to joining as a flatmate in a 2-bed apartment.
Bio: Male, mid 20s
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LET’S SAY THE U.S SAYS TO THE BANKS: BUY (INVEST IN) THIS $10, WHEN IT MATURES IN 5 YEARS, COME BACK, AND WE WILL GIVE YOU $11.
TWO YEARS DOWN THE LINE, THE U.S INCREASES THE RETURN FOR NEW INVESTORS.
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In the end, the solution is a strong economic team that can design and implement a strong economic plan. Of course, with accountability and prudence taking the lead.
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And before you pick a side based on religion, know this - Not all Israelis are Christians and not all Palestinians are Muslims!!
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You see, a country cannot just print its way out of debt or poverty. Well, any country can try to, but it will end in premium economic tears. The "egebere" kind.
Printing excess money will cause inflation. And the country will end up worse off. And here is why:
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It was agreed that the military should absorb the RSF.
The RSF said this absorption should be gradual and should happen over the space of 10 years but the military insisted that 2 years was enough.
Many political speculators agree that this disagreement
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The investors in this securitized W&M will be paid a 9% interest rate as against the 21.75% on the actual W&M.
This is a huge cost saving for the government.
But this is where the challenge is - why does the government have so much W&M borrowing than the law allows?
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Also, this strategy is simply just borrowing money to pay what was initially owed. So in the end, the government is still in debt.
That's the simple explanation of this news.
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2020 was an unusual year. As COVID was COVIDing, benefit boys were also benefitting.
That year, Rab was broke and broken. He was depressed and “sapastrated” so he decided fraud was his way out.
Unlike most fraudsters, Rab cared about his image.
I need someone, for the last time, to explain to me how money laundering works 😭 cause I genuinely don’t understand
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The price was 5 cowries but the people paid 3 cowries.
Price of firewood - 5 cowries
People paid - 3 cowries
King paid - 2 cowries
Price was 5 cowries but the king kept sponsoring a 2 cowries "discount" for every firewood purchase.
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But the government sets a huge amount aside to pay the balance for Nigerians just like the king was doing.
Removing the subsidy means that nobody is paying the balance for Nigerians. And Nigerians will buy fuel at the normal price.
In simple terms, fuel becomes more expensive.
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on a timeline is one of the reasons for the crisis. Many claim that these two factions of the military don’t want to let go of power.
In all this, there is another less popular report concerning this crisis - that this
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