And a few others such as JGBs and Eidengnossen (Swiss).
Treasury yields (returns available on govt securities fluctuate depending on a number of factors including inflation, fiscal position, currency movements, wars, pandemics etc. This applies to other asset classes as well.
Oct 15 • 19 tweets • 3 min read
🧵 Medium term thesis on Pakistan economy:
1. Foreign Policy:
The ineptitude of our dear neighbor has done more to ingratiate us to the world than we could ever have done for ourselves.
As it stands, BD, SL, Nepal, China, are visibly against India.
American posture, though it may prove fleeting is also positively inclined towards us.
The generals/marshalls who keep waking up from months of slumber across the border and entertain the masses there with fictional achievements are trying to hold on to their jobs.
Jun 7, 2024 • 13 tweets • 2 min read
🧵
I don't always agree with @AliKhizar . I probably disagree with him more than agree.
Having said that, if you're a person who is part of the recorded economy then you really shouldn't be surprised if the government comes after ever single source that you drive income from.
Were you expecting that the notoriously useless and correct FBR would suddenly, overnight be able to tax all the tax dodging bastards in the country and leave you untouched?
Jun 5, 2024 • 10 tweets • 1 min read
🧵Chinese Proverbs:
1. When short man with Napoleon Complex come to visit in summer, hide the family silver and send lowliest servant to receive him.
2. When man wearing ladies blue brocade come to capital city, pretend he is very wise. Stand up and clap at his jokes. But make him show you his purse before you give him meal.
May 31, 2024 • 15 tweets • 3 min read
🧵
I literally have the shittiest job in the world.
Big bro is always breathing down my neck. I have a son who I'm sure isn't mine. A niece who lives to play Police Bhaarbie, a Deputy who may as well be a Chimp on mushrooms, and a brain-trust composed of Rana, Ahsan and Ata.
The tank drivers are up my chuff all the time about using state machinery to make them seem all cute and loveable. I tried with the national cry-cry day on the 28th.
Then I did the ad-hoc public holiday thingy to commemorate a shaky-cam video of a hill from 25 years ago.
Apr 29, 2024 • 15 tweets • 3 min read
Haan bhai, did I miss the rate cut?
I guess people aren't used to the SBP behaving responsibly.
Frankly, I'm a bit shocked.
Not that I was hoping for a cut or expecting one but there was a part of my brain saying: "It'll be forced on the SBP by the GoP".
The fixed income market has bitten off more than it could chew. The trillions parked in T-Bills and bonds with yields below the OMO funding rate and the marginal deposit rate mean the NII numbers will continue to suffer.
Jan 15, 2024 • 13 tweets • 4 min read
The SBP has injected over 10 Trillion rupees into the interbank market to fund purchases of government securities and fund the fiscal deficit.
The original sin being repeated ad-infinitum.
And we wonder about inflation not going down...
The US can get away with it's debt expansion because the dollar is a global reserve currency and people across the world actually want dollars.
How does Pakistan justify it's massive fiscal black hole? How will the state ever balance it's budget enough to pay back this money?
Sep 27, 2023 • 8 tweets • 2 min read
Pakistani exporters are the dumbest species on the planet by far.
They hoard dollars abroad in anticipation of a devaluation. The devaluation happens. They don't bring proceeds back.
Then the govt and the booties go after the money changers......
The hawala hundi crowd goes underground, the money changers dump dollars into the inter-bank market.
Exporters panic and dump the hoarded money plus sell the next two months of proceeds into the forward market.
Apr 27, 2023 • 11 tweets • 2 min read
🧵Suppose you're a bank and the shareholders of a business come to you for a loan.
They have taken over the company from another group recently.
The company's net income is negative.
The old shareholders and the new ones are at loggerheads.
The company owes tons of money.
The audit function of the company can't figure out if the memorandum and articles of association of the company are being followed or abrogated by the current owners.
The top management of the company doesn't work. All they're good at is red tape and extorting money from clients
Apr 27, 2023 • 4 tweets • 1 min read
Debt Sustainability Analysis.
The assumptions for 2025 are just to die for.
Apr 25, 2023 • 6 tweets • 1 min read
Here's a blueprint for demonetization. 🧵
1. Announce money changers will be closed for business for two weeks, one week from now. T -7
2. Announce closure of prize bond sales for same period. T -7
3. Announce closure of all jewellers for same period. T -7
4. On T 0 (first day of above closures) announce 5000 note is not legal tender for any transaction.
5. 5000 notes must be deposited in Bank account within 5 business days or T+5
6. 5000 notes deposited by any one individual cannot exceed cash on hand disclosed in tax return.
Jan 14, 2023 • 13 tweets • 3 min read
Dear Pakistanis,
It is not normal:
1. To not break the traffic signal virtually every single day 2. To have a receipt given to you by the seller of a good or service 3. To pay tax 4. To drive only on the correct side of the road 5. To not see beggars at every signal
6. To have shops open at 8 and close at 5 7. To travel the world without a tiresome visa process 8. To have a car depreciate in value over time 9. To actually see prices get lower 10. To have uninterrupted electricity 11. To not have your street blocked for Friday prayers
Dec 12, 2022 • 7 tweets • 2 min read
In the coming few weeks and months you're all going to hear lots of rumours about lots of burning issues.
A lot of these will be focused on foreign currency accounts and lockers. Some will be focused on real estate, or new taxes, or demonetization or notices or something else...
Don't believe everything you read on WhatsApp. Don't believe everything you hear second-hand.
This is true for every day but even more so for the coming few days and weeks.
Even more important, don't forward anything that you have not independently verified.
Oct 31, 2022 • 20 tweets • 4 min read
My medium term thesis on where the #Pakistan#Economy is headed:
1. On an immediate basis the problem continues to be the oldest one - the balance of payments and within it the current account deficit.
Global economic conditions have gone against us completely and refinancing the maturing debt is proving to be a very very difficult job.
Oct 20, 2022 • 18 tweets • 3 min read
It is time that the people who have 'actually' been running this country since the 1970s finally discover that they do not have the neurons required to deal with the current situation.
They are used to being relevant because, for the past three decades they were paid to monitor the mental asylum that is Afghanistan. Daddy was playing king of the castle next door and our support was required to ensure daddy's supply lines were not compromised.
Oct 11, 2022 • 7 tweets • 1 min read
So here's something to think about: with the onset of the New-Dar-Order, exporters panicked and sold future proceeds (fwd booking) to the estimated tune of 600 to 800 million dollars in about 12 days. Maybe more.
Some had to sell at cost and some sold at loss too.
These sales are now all-but-exhausted.
We've eaten up a substantial part of the future pipeline just to soothe political ego and generate optics and vibes.
The unnecessary drama of taking the PKR to 200 has actually hurt exporters. If the PKR weakens from here who is to blame
Oct 7, 2022 • 8 tweets • 2 min read
I'm genuinely surprised the country's entire middle class has not called quits and left yet.
There's literally nothing for us salaried people anymore. No safety, no water, electricity is here today/gone tomorrow, gas is cheap but goes away when you're cooking.
Rain is something to dread rather than be thankful for. Every single shopkeeper is trying to rip you off. Every plumber, electrician, mason is trying to pull a fast one. The police are always looking for a quick buck. Government offices are a sinkhole for your money.
Sep 20, 2022 • 7 tweets • 2 min read
Ok so here's a conversation I had today: "bro, should I invest in the 3-month Tbill at 16% today or should I buy dollars?"
So I told him the compound annual yield of the 3-month Tbill is about 17%.
The conservative assessment for USD at the end of 3 months is 270 PKR.
So he says, "So I should buy the Tbill?"
I said, "brah, the annualized return from the dollar moving to 270 PKR in 90 days is 52%. Even if it only goes up 10 rupees, it's 17%."
Jul 20, 2022 • 13 tweets • 2 min read
Dear Politicians/Armed Forces,
Your position(s) in this world is based solely on the existence of this country. Other professions like doctors, teachers, bankers, engineers can be what they are anywhere else in the world. You can't.
Your existence is symbiotic to this country.
Without this country you have no legally marketable skill. Politicians especially should realize this given that almost all of you are dynasts and your power is derived from some long dead relative harking back to independence.
Jul 19, 2022 • 13 tweets • 3 min read
🧵
PSX Boyz learning economics is literally the funniest shit ever.
The country has to come to the very brink of default for this lot to finally understand how the country actually works.
The things we have learnt so far (since my firestarter tweet in November 2021):
1. The relationship between the fiscal deficit and govt borrowing
2. The relationship between govt borrowing and money supply
3. The relationship between money supply and inflation
4. The relationship between inflation and the Policy Rate
Jul 19, 2022 • 5 tweets • 1 min read
What is it that we contribute to the world that it owes us anything at all?
All we give the world are some footballs and some intermediary cotton derivatives.
The only export that had helped the country on an ongoing basis is unskilled labor.
Pakistan can't default....
Why? Because we have nukes?
