Open RAN, El Padrino, Chinese Securities, Western Sahara, Covid-19, Ethiopia and the Week in Review

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Open RAN, El Padrino, Chinese Securities, Western Sahara, Covid-19, Ethiopia and the Week in Review

Lots to talk about this week, so let’s jump right into it…


Open RAN. The U.S. House of Representatives unanimously passed a bill to provide $750 million in funding over the next 10 years to support a domestic 5G equipment market and Open Radio Access Network development.

What it means: Yes, you read that correctly. Unanimously! The U.S. can’t pass a stimulus bill to provide support for small businesses to save its life, but it can agree to spend $750 million over 10 years for a 5G network. $750 million over 10 years is a drop in the bucket compared to the scale of is being envisioned here – it won’t, for instance, do anything to help the U.S. get to 5G faster than China or to make Open RAN a globally scalable 5G solution – but if there is enough bipartisan support on this issue, there is going to be a lot more federal money forthcoming on 5G and Open RAN in the future.

El Padrino goes free. The Attorney General of the United States will dismiss all charges against former Mexican Secretary of Defense General Salvador Cienfuegos Zepeda.

What it means: If you don’t know who Cienfuegos is or why this matters, click here for our quick re-cap from the week he was arrested and here for our analysis of Mexico’s threats to review security cooperation agreements if the U.S. did not reverse course.

We don’t often get totally surprised by a geopolitical development. This one shocked us. It was already surprising that the U.S. was willing to arrest such a high-ranking former Mexican official without informing the Mexican government ahead of time – but to turn around a month later and let the dude walk because of “sensitive and important foreign policy considerations” is arguably even more surprising. It is also a telling indicator of how U.S. power has declined in relative terms. This is a major win for Mexican President Andrés Manuel López Obrador, who can now use Cienfuegos to buttress his own anti-corruption bona fides while also presenting himself as the leader who faced down the U.S.


Stay away from Chinese securities. U.S. President Donald Trump issued an executive order barring future transactions in public traded securities of any company deemed a “Communist Chinese military company.”

What it means: This is a major new development in the decoupling of the U.S. and Chinese economies. Let’s be 1000 percent clear: we don’t give investment advice! Suffice to say however that now might be a good time to double-check your IRA and see if you have any exposure to Chinese stocks and to discuss how this affects your investments with your adviser. (If, BTW, you’re looking for an adviser more attuned to geopolitical risks in investing…drop us a line at, we can hook you up.)


Another war in a place you’ve never heard of. Western Sahara’s pro-independence group declared war on Morocco a day after Morocco launched a military operation in a UN-patrolled buffer-zone between them.

What it means: Take note, those in agribusiness or farming: Morocco is the 5th largest fertilizer exporter in the world, and 10 percent of Moroccan phosphates are mined in Western Sahara. Western Sahara’s mine at Bou Craa by itself produced around 15 percent of the world’s phosphate as recently as 2011. The total stock at Bou Craa is estimated at 500 million tonnes (current annual production averages around 2.2 million tonnes). Also, lest you’ve forgotten, Belarus is the 6th largest exporter of fertilizers and anti-government protests there in recent months have affected Belarusian production. We’ve focused on higher food prices as a potential global political risk but increases in the prices of fertilizer should be on your radar now too.  


A second vaccine and a second wave. Moderna announced preliminary results from the Phase 3 study of its COVID-19 vaccine showed 94.5 percent. More importantly, Modern believes its vaccine will retain its efficacy when stored in a refrigerator for up to 30 days. Meanwhile, COVID-19 cases are rising in all U.S. states except Hawaii. New York City closed public schools. The seven-day average for reported deaths has increased to 1,246: the last time it was that high was May 21st.

What it means: Take the good news with the bad. With Pfizer and Moderna both demonstrating success in their vaccine trials, uncertainty has been reduced considerably. We can argue about when the vaccines will be deployed, how the supply chain for cold storage will transform, and when the vaccines will generate enough immunity for life to get back to normal, but that debate is now a tangible one – an argument about months versus years as opposed to “whenever a vaccine is available.”

On the flip side, the COVID-19 situation in the U.S. looks increasingly grim, and more importantly, fear is increasing alongside the increases in cases, deaths, and anecdotes of hospitals becoming overwhelmed. Fear makes people and governments do irrational things that may have significant long-term ramifications. For better and for worse, the U.S. chose to mitigate rather than suppress COVID-19, but mitigation only works if people actually distance and wear masks. Mitigation also means accepting that there are going to be deaths and tragedies and not pretending like any one approach is going to get rid of the virus completely.


The Ethiopian Civil War. Fighting continues without a clear result in sight. Ethiopian Prime Minister Abiy Ahmed promised a “final and crucial” operation before the end of the week.

What it means: We’ve got nothing new to say, just reminding you from a geopolitical perspective that the 12th most populous nation in the world and the most important nation in East Africa is in the midst of a worsening civil war and from a human perspective that refugees that have escaped from the region are telling reporters harrowing stories about massacres and potential ethnic cleansing.

Honorable mention:

Russian President Vladimir Putin congratulated Brazilian President Jair Bolsonaro on how he faced COVID-19 “like a real man and showed the best qualities of masculinity, such as strength and willpower.” Get a room, guys.

Initial results from a study suggest that injections of a drug called cabotegravir every 8 weeks prevented HIV infection in women by approximately 99 percent.

China published a list of 14 grievances it has with Australian government policy towards Beijing; China’s Foreign Ministry spokesman Zhao Lijian said Australia should “reflect on this seriously.”

Zambia missed a $42.5 million interest payment on $3 billion of dollar-denominated debt.

Francisco Sagasti became Peru’s third president in a week.

New Turkish Central Bank Governor Naci Agbal raised the one-week repo rate to 15 percent from 10.25 percent; the Turkish lira appreciated as much as 2.5 percent on the dollar

Michigan Governor Gretchen Whitmer revoked an easement granted 68 years ago that extended a 4 mil section of an oil pipeline that carries oil beneath a channel linking two of the Great Lakes.

Iraq and Saudi Arabia reopened their land border for the first time since the First Gulf War led to Riyadh closing the border 30 years ago.

Renewed anti-government protests turned violent in Thailand after the Thai parliament rejected a constitutional amendment designed to reduce the powers of the monarchy.

The U.S. Secretary of the Navy said he is pushing for a reactivation of the U.S. 1st Fleet, with a potential headquarters in Singapore.

Chinese state-owned Yongcheng Coal and Electricity Holding Group defaulted on a 1 billion yuan (~$150 million) bond just one month after being given the highest possible rating by a domestic credit rater.

Polish Prime Minister Mateusz Morawiecki reportedly sent a letter to heads of major EU institutions and warned that Poland would not approve the 2021-2027 budget if “any discretionary mechanisms that are based on arbitrary, politically motivated criteria.”

Argentina’s lower house, the Chamber of Deputies, approved a one-time tax on individuals with more than $2.3 million in assets at a progressive rate of up to 3.5 percent for assets in Argentina and 5.25 percent on assets outside the country.

The Israeli government fined Chevron NIS 3.8 million (~$1.12 million) for violating its permit on discharges from the Leviathan gas platform into the sea.

Inflation in Nigeria climbed to 14.23 percent, a 30-month high.