The Weekend Edition

We’re on break this weekend, but thought it would be nice to end the year with a Weekend Edition that touches on everything from the list we hope to be on at the end of 2017, to chessboxing, the story of India pale ales — and the very terrifying notion that the world may be running out of coffee. Thank you, each and every one of you, for reading us this year. It is an honor to write you every morning.
Happy New Year to all of you.

Do you want to move your possessions away from Egypt? What budget rate are you using for next year? Will you be investing more in 2017? How do you think you’ll be faring against the competition in six months’ time?

Enterprise readers answer these questions and more in our 4Q2016 reader survey, which we released in our Wednesday issue, along with some of the best comments left us by participants in the survey. If you missed it, we guarantee it’s worth reading.

Here’s a list we hope to top in 2017: The Economist’s pick for its 2016 country of year is Colombia, for the “colossal achievement” of making peace during the year. “At one point the country was on the brink of becoming a failed state—something that is now inconceivable… The nightmare ended in 2016—touch wood.” The country reached a peace agreement with FARC rebels and although it was rejected by voters, the two sides sat down again and answered some of the objections. “Like most negotiated peace deals, Colombia’s is incomplete and involves ugly compromises. But the alternative is worse,” The Economist says, “Colombia is a worthy winner.”

To win the award, the newspaper says, “it is not enough to be peaceful and rich. We aim to reward improvement. Previous winners include Myanmar and Tunisia, for escaping tyranny and building something resembling democracy. Switzerland, Japan and New Zealand, which were just as lovely a decade ago, need not apply.” Contenders for the award this year included: Estonia for its educational attainment, Iceland for being the fastest growing rich country in 2016, Canada for staying “sober and liberal even as other rich countries have been intoxicated by illiberal populism,” and, more controversially, China for competently reducing poverty and Taiwan, for dealing with “China’s bullying.”

Will our local investment bankers bring this to Cairo? Chessboxing has started growing in popularity among London investment bankers in the past five year. The sport is a hybrid between boxing and chess where “participants alternate four-minute rounds on the board and three-minutes in the ring until someone takes a knock-out blow on the canvas, or gets checkmated. If the game of chess ends with a tie, it is settled with the points earned in the boxing rounds. If the boxing fight ends with a tie, the player who had black on the chessboard wins.” The Financial Times’ Emma Jacobs says chessboxing is an evolution of “white-collar boxing” that first gained popularity among Wall Street professionals in the 1990s and spread to the City, but it has the added appeal of showing “you are mentally as well as physically agile.” Sounds odd? Here are the highlights of the World Chess Boxing Championships from Germany in 2008 (part one, runtime 10:07) and (part two, runtime 06:16).

The world’s oldest bank is getting a government bailout: The oldest bank in the world still operating is Italy’s Monte dei Paschi di Siena (MPS). It was founded in 1472 under the auspices of the Republic of Siena and is now the third largest lender in Italy by assets. ​Since the start of the year, however, MPS shares have already lost more than 80% of their value and was running out of time to meet a European Central Bank deadline of the end of this year to raise EUR 5 bn from investors through the sale of new shares to stay in business. So the government of Italy decided to step in with a EUR 20 bn bailout package “as a last-gasp private sector rescue plan,” according to The Financial Times. “The government is expected to inject capital, taking its stake in the bank much above the current 4 per cent. Rome could even take a majority stake, according to people close to the bank.” MPS’s fortunes have “declined since the ill-timed [EUR 9 bn] cash acquisition of its local rival Banca Antonveneta on the cusp of the financial crisis.” The move by Italy’s government is already facing opposition, particularly by Beppe Grillo’s Five Star Movement, which calls for the full nationalisation of struggling banks.

…Another historical banking story: The Knights Templar were the first international bankers in the world, minus the crazy Dan Brown storyline. Tim Harford, one of the smartest and best orators in our view, presented their impact on the history of modern banking on his new-ish BBC podcast 50 Things That Made the Modern Economy. They dedicated themselves to the defense of Christian pilgrims to Jerusalem, providing them with a service that allowed them to rid pilgrims of carrying large amount of cash that would make them targets for robbers by issuing them letters of credit. “A pilgrim could leave his cash at Temple Church in London and withdraw it in Jerusalem … The Knights Templar were the Western Union of the Crusades,” Harford explains. The power the Knights Templar accumulated did not leave European kings happy. Eventually, “Templars were tortured and forced to confess any sin the Inquisition could imagine. The order of the Templars was disbanded by the pope. The London temple was rented out to lawyers, and the last grandmaster of the Templars … publicly burned to death” (runtime 12:16).

The backstory of those delicious IPAs we never get in Egypt: Few beers incite and enrich conversation as much as India pale ales (IPAs), The Economist writes. “Their distinctive character — the ‘firm bitterness [that] lingers long and clean’ in one, the ‘complex aromatic notes of citrus, berry, tropical fruit and pine’ in another — spur discussions that spill over from tap rooms to websites with ease.” IPA is the child of Britain’s industrial revolution and imperial expansion — and it almost vanished with the spread of lager.

It all began in the 18th century, with the British East India Company. “Boredom between the comings and goings of the ships led company men in India to make an ‘art-form of feasting and boozing’ … To help this art-form along, wily entrepreneur-seamen packed the holds with hams and cheeses, crockery and glassware and good supplies of drink … The Company encouraged the imports, even taking an interest in guaranteeing their quality.” The troops in India may have preferred darker, sweeter porter, but the wealthier traders hankered after more refinement and George Hodgson’s Bow Brewery, which by the late 18th century had become the main supplier, managed to give them what they wanted.

Hodgson provided them with pale ale, a lighter-coloured bitter that was a recent innovation. “Its (relative) pallor came from its malt, which is a grain, usually barley, which has been heated and dried. Sometimes called the ‘soul of beer’, malt imparts sweetness, colour and the starch that is broken down into alcohol.” The key step in being able to create the pale ale was developing coke, a coal from which impurities have been baked out, which made it possible to move away from wood or straw that were used in malting but had “a devilish lack of consistency.” Coke’s “clean burning produced a paler, subtler and more consistent product, and though darker, sweeter styles still predominated, brewers started to aim those pale ales at the palates of wealthier drinkers.” But then, however, Hodgson overreached and began to operate close to being a monopoly and started to export beer on his own ships to exert more control over the trade and expand his business. So in 1822 Campbell Marjoribanks, one of the Company’s directors, sat down to dinner with Samuel Allsop, a brewer from Burton-on-Trent, “hoping to clip Hodgson’s wings.” Allsop succeeded in creating a similar ale and, joined by other Burton breweries, drove Hodgson’s out of favour. This is how “East India ales” or “Ales for the Indian Market” reached some global dominance.

This was short-lived. Rival drinks became more popular and “industrial refrigeration made it possible to brew beers year round [it had previously been a seasonal business unsuited to summers] and to make more beers of the crisp, light lager style popular in Germany and Bohemia.” Enduring a severe rout, IPAs made a comeback in the late 20th century. “Born in monopoly, IPA is triumphing through diversity. Everyone can have a home-town brew and an opinion. That is bad news for the vast brewers that dominate the large but shrinking global lager market. The competition flourishes at a local level and on a modest scale that the big brewers hardly know how to understand,” The Economist says, “the tipple that helped create the world’s first brewing giants could yet undermine the beermaking behemoths of today.”

Blockchain has the power to disrupt the music industry: The technology could defy the eternal problem of artists getting paid way less than they should. “In the music industry, the blockchain could transform publishing, monetization and the relationship of artists with their communities of fans,” writes Ben Dickson for TechCrunch. It’s fine to be asking what Blockchain is: “Blockchains are ledgers (like Excel spreadsheets), but they accept inputs from lots of different parties,” according to Portia Crowe’s visually excellent piece as she seamlessly demystifies it for Business Insider. To change data, there has to be consensus among those involved in any transaction, hence security and decentralization. Data is stored in blocks, each block with its own ID, identifying which transactions are taking place and by who, hence transparency.

Replace “data” with “published music.” It means no piracy and direct interaction between the artist and fans. “Users can select the record of their choice and immediately reward the stakeholders with cryptocurrency upon playing it,” writes Dickson. Hallelujah. Problem solved? Not yet. “The challenge with using the blockchain for music isn’t a technological one. It’s a set of interlocking business problems that have been around since the beginning of music listening,” according to Digital Music News’ Matthew Hawn. Too many people benefit from the way the industry works — and blockchain won’t make people more willing to pay. “It’s going to be a long, hard battle, and the blockchain is not a silver bullet.”

The scariest of all horror stories we could think of: Vice scared the living hell out of us with a video segment suggesting the world could be running out of coffee. Coffee leaf rust, a fungal infection, could potentially wipe out the world’s coffee plants by 2050. “Coffee rust kills plants by depriving them of nutrients. And in 2014, the disease destroyed up to 70 percent of harvests in Mexico and Central America. It’s been a problem for coffee growers around the world for centuries, but unpredictable rainy seasons caused by climate change have intensified the spread of the fungus and affected farmers of varying means.” The infection mainly affects Arabica coffee beans — the good, expensive stuff, but lower quality Robusta beans, while more resistant to rust, are less economically feasible for farmers to grow (runtime 04:42).

Why Christmas music sounds “Christmassy”: There is one chord that makes Christmas music special, Vox explains, looking at Mariah Carey’s "All I Want for Christmas is You," the only modern Christmas song to be widely played. There are special chords that could be responsible for that, starting with the key of C. “It’s these jazzy chords … the classic early twentieth century Christmas jazzy sound… just the most christmassy thing in the world” (runtime 04:55).

The biggest ad fraud ever: A group of Russian hackers are reportedly making somewhere between USD 3-5 mn a day, security firm White Ops claimed, “it’s the biggest digital ad fraud ever uncovered and perpetrated by faking clicks on video ads.” Forbes’ Thomas Fox-Brewster, writes the perpetrators, Ad Fraud Komanda or AFK13, started by creating more than “6,000 domains and 250,267 distinct URLs within those that appeared to belong to real big-name publishers, from ESPN to Vogue. But all that could be hosted on the page was a video ad. With faked domain registrations, they were able to trick algorithms that decided where the most profitable ads would go into buying their fraudulent web space. Those algorithms typically make bids for ad space most suitable for the advertisement’s intended audience, with the auction complete in milliseconds. But AFK13 were able to game the system so their space was purchased over big-name brands” The hackers then invested in a “bot farm” firing traffic at the ads, driving up their revenue through the pay per clicks system.

These bots “watched” as many as 300 mn video ads a day, replicating actions of real people with “clicks, mouse movements and social network login information” raking in an average payout of USD 13.04 per 1,000 faked views. Fox-Brewster adds “to make those bots appear more real, and thereby bypass normal anti-fraud detection measures, the group obtained hundreds of thousands of IP addresses and associated them with major U.S. internet providers so it looked like they were based in American homes. Those IP addresses were fraudulently obtained from at least two of the world’s five regional Internet registries.” The fraud could have been bigger even because White Ops was only able to analyse data directly observed by it, “the total ongoing monetary losses within the greater advertising ecosystem may be exponentially greater.”

The most ‘interesting’ stories of 2016: Brexit and the election of Donald Trump alone made 2016 a year for the history books. In its end-of-year episode, Bloomberg’s Odd Lots podcast gathered five reporters and editors from Bloomberg News to find out what they thought were the most interesting and important stories of the year that you might have missed. One story that made the list was #sprayathon; portfolio manager Brett Barna’s Wolf of Wall Street-style pool party that trashed a USD 20 mn mansion in the Hamptons in July. Page Six says it was “awash with Champagne, scores of bikini-clad women and costumed gun-toting midgets.” The list of their ‘interesting’ stories included reports on the how private prisons are run and the impact of Trump’s election on them, how Goldman Sachs lost Libya’s sovereign wealth fund a lot of money, the momentous turn by the Bank of Japan, and the incredible significance of the Mexican Peso (runtime 31:08).

BBC’s The Inquiry podcast looked into what ‘went right’ in 2016. The year was one where a lot has gone wrong, it was “terrible,” BBC says, “not talking about Brexit or the election of Donald Trump – both of which split opinion in Britain and the US – we’re talking about terror attacks, the brutal conflict in Syria, and the thousands of migrants who died trying to reach Europe” and how the world became a less peaceful place and threats from climate change became more pronounced. Instead, The Inquiry focused on four stories that were buried under the bad showing the ambition of “a small number of extraordinary people to achieve the seemingly impossible” (runtime 26:20).

Imagine a Shazam for real world sounds that alerts your phone or turns on the lights when glass breaks. That’s what British startup Audio Analytic is all about. Bloomberg’s Hello World host Ashlee Vance speaks with founder and CEO Chris Mitchell on how artificial intelligence (AI) can protect your home (runtime: 3:28). So much glass was broken in the meantime for the technology to recognize the sounds, “windows that would literally fill warehouses [for months]. Different sizes, different thickness, different types of glass,” says Mitchell. Smoke alerts and baby crying can also be detected. For more AI, TechCrunch has top 15 AI stories in 2016 spanning from supercomputers and machine learning, to airspace and drones — Google comes up in 6 of them. And TechRepublic’s Hope Reese has top 2017 AI trends to expect: more AI in our lives, moral issues like algorithmic fairness, and more hacking. The latter is echoed by Bloomberg’s Ilya Khrennikov who writes, “Potential leaks of personal user data collected by internet giants and online services will be one of the major cyber-security threats of 2017, according to computer safety company Kaspersky Lab.” 78 percent of users considered quitting social media over fear of spying but didn’t because of their memories out there, the company found. We hear you, Kaspersky.

The most-clicked stories in Enterprise in the past week were:

• The Enterprise 4Q2016 Reader Survey finds cautious optimism about 2017 (Enterprise)
• Saudi royal family is still spending in an age of austerity (New York Times)
• Egypt’s failed revolution (New Yorker)
• Ballerinas of Cairo (Instagram)
• The Enterprise 2016 timeline (Enterprise)

Sorry, nerds, you can’t call Jediism a religion: The UK’s Charity Commission has rejected an application to grant charitable status to The Temple of the Jedi Order, BBC reported. The commission said Jediism did not "promote moral or ethical improvement" for charity law purposes in England and Wales. Identifying as “Jedi” first began as a tongue-in-cheek response from some atheists on the UK’s 2001 census when a question on religious belief was asked for the first time. By the 2011 census, 177,000 people declared themselves Jedi, making it the UK’s seventh most popular religion on paper. “But others took the message from the Star Wars films further, aiming to build a belief system and religious code inspired by the franchise,” BBC explains.

Ten music industry questions in 2016: Live music generates more revenues than recordings. But setting up a concert is costlier, so less profit-generating. That’s for the record label. For artists, they get more money from live industry, thanks to how profit is distributed, according to Complete Music Update’s Chris Cooke. Why do artists still sign label deals if they think they are so evil? It’s about investment, marketing and distribution, and expertise. Delving deeper into music festivals: “The U.K. and the U.S. dominate the top 50, while Africa, Asia and Latin America are nearly nowhere to be found — for now,” writes Cherie Hu for Forbes. The only featured African festival: Morocco’ Mawazine. The good news is, Africa’s live / background music royalties increased by 33.2% last year.

What about live music in Cairo? Check out Room in Garden City, 3elbet Alwan in Zamalek, Cairo Jazz Club in Agouza, or Madaar in Maadi.

Babbage talking about … Babbage: The Economist’s technology podcast is named after British polymath and mathematician Charles Babbage, who is widely hailed as the father of modern computing. In a year-end special episode, host Emma Duncan is joined by two renowned computer science experts: Adrian Johnson and Doron Swade to explore the life and work of Babbage, including his difference engine, picture above (runtime 1:09).