The Weekend Edition

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We publish the Enterprise Morning Edition in English and Arabic from Sunday through Thursday before 7am, with a focus on the business, economic and political news that will move markets each day. What you’re reading now is our Weekend Edition, which is light on news and heavy on stories to read, videos to watch, and podcasts to which you may want to listen on Friday and Saturday (that being the weekend for the vast majority of our readers). The Weekend Edition comes out each Friday between 9:00am and 9:30am CLT. We’re in beta and in English only right now.

We’ll be back on Sunday at around 6:15am with our usual roundup. Until then: Enjoy the weekend.

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SPEED ROUND, THE WEEKEND EDITION

We know, we promised no news in the Weekend Edition, but: Yesterday’s global equities sell-off is continuing this morning, with Tokyo’s Topix index down 5.5% at time of writing and the MSCI All-Country Index down 20% off its May 2015 record. “We’ve entered a different phase in the market,” Bloomberg quoted a senior strategist at Nomura in Tokyo as saying. “We’re not simply in a risk-off mode, the market’s fallen to the point of pricing in a recession in the U.S.”

We don’t often run across explainers from Reuters, but this one is rock-solid: “What’s behind the global stock market selloff?” Worth reading even if you think you know the answer, even though the unsatisfying conclusion is simple: We likely haven’t hit the market bottom yet, and even if we have, 2016 will be lackluster at best for the global economy. And it’s all America’s fault: “The general feeling is that the U.S. economy is nearing a peak and there is not much left as far as trends to be talked about.”

Thinking of drowning your oil-and-equities-linked sorrows in a dram or two of peaty amber liquid? You might want to think again. Whiskey, not real estate, is shaping up to be an outstanding investment theme this year. The Rare Whisky Apex 1000 Index is advancing, with the “supply of older vintages … becoming scanter and more fiercely fought for by wealthy collectors. A bottle distilled in the 1920’s averages more than GBP 7,000 (USD 10,150) at U.K. auction,” Bloomberg reports.

And speaking of investment themes: If you’re a gold bug, you’re not alone, Zero Hedge suggested yesterday, noting that the precious metal just had its best quarter in 30 years in “Lines Around The Block To Buy Gold In London; Banks Placing ‘Unusually Large Orders For Physical’”.

“We want our country back”: Vox editor-in-chief Ezra Klein files a video report that looks at the interplay of demagoguery, Islamophobia and individual fear in support for “The rise of Donald Trump is a terrifying moment in American politics.” Says on Trump backer: “We want our country back. And I don’t appreciate that I have to be not safe in my own country because there are some tenets of their own religion that basically teach that they’re going to kill people who don’t believe what they believe.” In the accompanying story, Klein stops short of calling a spade a spade (U.S. media has given Trump a free pass), but still gets near the heart of the matter as he writes: “It is undeniably enjoyable to watch Trump. He’s red-faced, discursive, funny, angry, strange, unpredictable, and real. He speaks without filter and tweets with reckless abandon. … It’s so fun to watch that it’s easy to lose sight of how terrifying it really is. Trump is the most dangerous major candidate for president in memory. He pairs terrible ideas with an alarming temperament; he’s a racist, a sexist, and a demagogue, but he’s also a narcissist, a bully, and a dilettante. He lies so constantly and so fluently that it’s hard to know if he even realizes he’s lying. He delights in schoolyard taunts and luxuriates in backlash.” Read and watch the accompanying video (run time: 6:54)

To quote the Arab bn’aire: This is really “the mother of all disasters.”

Speaking of the U.S. presidential contest: Bernie Sanders and Hillary Clinton clashed again last night, with Clinton going harder on the offensive than before after a bruising loss in New Hampshire. The two are jostling for position ahead of primaries in Nevada and South Carolina. Politico has a wrap-up of the eight most “important moments” of the debate, while the New York Times criticized Sanders for showing “little capacity to broaden his political message in compelling new directions beyond overhauling the economy, campaign finance and health care” as he faces “pressure to appeal to racially diverse voters in Nevada and South Carolina.” Politico also looks at who stretched the truth and who hit the nail on the head on stage last night in “The Politico Wrongometer.”

Not Egypt: The country “is burning. Our government is wasteful and dysfunctional. Our national debt exceeds our gross domestic product. Our bridges, roads, airports and tunnels are crumbling. Our school system fails to educate our children. Our middle class is shrinking. Our tax code drives our most profitable businesses to relocate to foreign jurisdictions. Our immigration laws force talented young scientists and entrepreneurs to competitor nations. Our incomprehensible regulations fail to protect us from fraud, crime, pollution and abuse of power, while stunting growth and impairing our global competitiveness. Our international standing has deteriorated. Our enemies no longer take our pronouncements seriously and our military supremacy is threatened.” That’s Pershing Square Capital Management chief Bill Ackman winding up in the Financial Times (paywall) to endorse Michael Bloomberg’s potential run for the U.S. presidency as an independent.

Regular readers of Enterprise know we’re awfully pleased there’s a new Harry Potter story coming out, with the two-part stage play Harry Potter and the Cursed Child due to take to the stage this summer in London. Author J.K. Rowling took to el-tweeter this week to announce that while there won’t be a novel version of the story, set some 18 years after events depicted in the series, the script of both parts of Harry Potter and the Cursed Child will be published in book form. You can pre-order the script on Amazon here.

Get ready to be thoroughly depressed: Traders and bankers at Bank of America’s London unit are the least satisfied with their 2015 bonuses while those at Jefferies Group are happiest, according to a survey, Bloomberg writes in “Who Are the Most Miserable Bankers in London’s Bonus Round?” Average bonuses went up last year, ranging from GBP 618k for a managing director, over double the previous year, to GBP 50k for an associate.

Cash is king in society’s underbelly; could wiping out high-value notes be the key to stemming illicit activity? High-value notes “play little role in the functioning of the legitimate economy, yet a crucial role in the underground economy,” the Financial Times (paywall) quotes Peter Sands, former chief executive of UK-based Standard Chartered bank, in a paper published on Sunday. Illegal money flows are estimated at up to USD 2 tn a year, according to the paper, and tax evasion can deprive governments of as much as 70% of their income. “The irony is that [the bills] are provided to criminals by the state.”

“The euro area’s 19 national central banks hold investment assets worth almost half a [tn] euros, according to previously secret information published last Friday by the European Central Bank in Frankfurt,” writes Bloomberg. “Although ANFA was previously a confidential document, the ECB and the national central banks of the Eurosystem took the unanimous decision that publishing the text along with an explanatory document would better serve their commitment to greater transparency,” the ECB said in the statement on its website.

DID YOU MISS AN ISSUE THIS WEEK? Check out our archive on the website.

The UK is not as densely populated as you might think: “The densest part of London is four times less dense than Barcelona, a normal, well-planned European city that Britons all want to visit,” Danny Dorling, an Oxford University professor is quoted in a Guardian investigation about the UK’s “population panic.” The biggest British cities are still growing, but this should not be cause for major concern, Jonathan Portes of the National Institute of Economic and Social Research says. “We’ve forgotten what depopulation feels like,” he explains; in the 1970s, there were concerns over depopulation as the postwar baby boom was ending and with the onset of modern contraception, “manufacturing jobs were disappearing … expectations about the future were diminishing.” What’s the problem then? Dorling believes it is the “poor land use and social division” and “corporate wage squeezes and cuts in state provision” with Britons having the smallest homes in Europe despite the “wasted space” taken up by “the huge, little-occupied homes of the super-rich and empty investors’ properties.” That said, he does not expect this population growth to be sustained, as the economy might cease to be attractive to immigrants, Mediterranean economies will recover, and regional conflicts in the Middle East and Africa are bound to end.

Einstein was just proven right — again — as gravitational “waves” he predicted 100 years ago were discovered. Okay, sounds dry, right? But scientists say this is a discovery on par with that of Watson and Crick figuring out the structure of DNA in 1953. The BBC has the best written take on it here (including exclusive comment from Stephen Hawking), but we’re stunned at how good the New York Times has gotten at video. Dennis Overbye’s story is great, but his accompanying video explainer (run time: 4:36) is science journalism at its best — it brings the physics of it to life in a manner comprehensible even to us.

Remember the Christmas puzzle we noted in December — the annual piece put out there by the U.K.’s signals intelligence agency? The winners were … no one. Not a single soul. But the three people who came closest to getting the whole thing right will get gifts anyway, the BBC reports. The original puzzle is here, and the insanely complicated answer key is here in pdf.

The Financial Times’ John Kay filed a pointless column this week about the relative competitiveness of airport hubs (at least, that’s what we think he was writing about). But before he muddled to a nearly-nonsensical close, he opened strong with the reminder that the U.K. is a force in global finance not because it once had the planet’s mightiest navy, but because of its time zone.

Check out: “A 56-year-old Sports Illustrated model on bikinis, gray hair, and her ‘roundy tummy’” in New York magazine. Then her Instagram feed.

WATCH THIS

If you’re a comic book fan but are also of the olds (or maybe just an old soul like some of us here at Enterprise) you’ll get a kick out of this Batman vs Superman trailer (run time 2:56) that’s been given a retro makeover using clips from the original Batman live-action series starring Adam West and The Adventures of Superman starring George Reeves.

Rugby’s European competition, the RBS Six Nations Championship, began last week. You can watch the highlights from the Scotland vs England (run time 04:50), France vs Italy (run time 06:06), and Ireland vs Wales (run time 05:27). For round two, France plays Ireland and Wales takes on Scotland on Saturday and England faces Italy on Sunday.
With New Hampshire now the first US state to “feel the bern” Bernie Sanders supporters released a video that intertwines one of the Vermont senator’s speeches with images of unity, likely to contrast with Republican forerunner Donald Trump’s, uh, speeches about the exact opposite. The Sanders Twitter account received hundred of retweets and over 1,500 likes on the video (run time 1:00).

WARNING: The cuteness may be too much to handle. Baby orangutans in a sanctuary in Borneo attend school (run time: 1:27) to reacquaint themselves with jungle living. The seven to eight year coursework made up of an advanced curriculum of foraging and nesting should hopefully see these aspiring young critters matriculate into respectable and upstanding members of their Indonesian ecological society. Illegal poaching and destruction of their habitat has left us with very few of these amazing creatures — 45,000-69,000 according to experts. We can’t wait to see the graduation photos.

DOCUMENTARY OF THE WEEK: China’s Capitalist Revolution offers a window into the historical forces that shaped what is arguably the most impactful political and economic transition in modern history. The BBC-produced documentary also provides insights into the architect behind this transformation, Deng Xiaoping, who moved China away from the isolation, chaos and poverty that marked the calamitous reign of Mao Zedong. By injecting elements of free market reforms grounded in a centrally planned economy, not only were mns of Chinese lifted out of poverty but an economic development model was formed outside the constructs of the West’s political systems, catapulting China into the economic behemoth it is today. You can view the documentary in Vimeo. (run time: 1:28:38)

Watch all the documentaries, or at least those nominated for Best Documentary Oscars. Vox has got you covered with where to find them online to stream. Hint: Netflix is your friend.

READ THIS

Don’t be fooled by the ridiculously boring title: “The Unique Language of Newfoundland” is a meditation on how one of the world’s most unique geographies combined with an ethnic melting pot of indigenous people and European settlers to create a unique dialect of English. “Words arrived from everywhere. Spanish fishermen brought bacalao, their name for cod. Dwy, to describe a short, sudden storm was imported from West Country English. A local trickster was called a sleveen, adopted from Irish. The newcomers picked up on terms already tied to place, like tabanask, an anglicized Innu language term for toboggan and the Mi’kmaq word, babbish, referring to the stretched animal hide used in the crisscrossed base of snowshoes, as well as sina, the word the Inuit use to describe the edge of a floating ice field.”

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LISTEN TO THIS

“Imagine Fox News, but everywhere,” Bassem Youssef told NPR’s Terry Gross, describing the media reaction to the January 2011 uprising and his decision to begin his YouTube series. Beyond the platitudes and the multiple references to him being “Egypt’s Jon Stewart,” Youssef spoke about his show in Egypt, his family and upbringing, conspiracy theories, and his view of the current state of both Egyptian and American politics. Youssef is launching a new series, titled, “The Democracy Handbook,” a new satirical web series about American democracy that will premiere in the spring on the Fusion channel’s new digital platform. You can listen to the whole interview here.(Run time 36:19)

Did you follow season one of the Serial podcast? Sarah Koening ducked back into Adnan Syed’s case for a few days to report on court proceedings. “Syed’s attorney will introduce new evidence, and present a case for why his conviction should be overturned” and Koening and producer Dana Chivvis are discussing the daily hearings. You can listen to season one’s day one update here. (Run time 15:55)

SOMETHING THAT MADE US THINK

Use this as a rule of thumb next time you’re bidding for something: When negotiating a price, never bid with a round number as, according to some research, “investors who offer ‘precise’ bids for company shares yield better outcomes than those who offer round-number bids.” The research by Harvard Business School’s Petri Hukkanen and Matti Keloharju posits that a round-number bid signals “that the party doesn’t really know what it’s doing.” “People tend to assume, true or not, that someone must have crunched lots of data to come up with an amount so specific. A round number, on the other hand, suggests that a person is just ballparking it—offering an approximate valuation based on vague knowledge.” h/t Marginal Revolution.

HEALTH

Why Experts Now Think You Should Eat More Fat: “For more than half a century, the conventional wisdom among nutritionists and public health officials was that fat is dietary enemy number one – the leading cause of obesity and heart disease.
It appears the wisdom was off. And not just off. Almost entirely backward.”

ENTREPRENEURS

We have our first African “unicorn”: AIG (Africa Internet Group, not the failed insurance provider) is now valued at USD 1.04 bn, Wamda reports. International insurer AXA bought an 8% stake in the company for EUR 75 mn. AIG’s main subsidiary is online marketplace Jumia, as well as Kaymu, food ordering business Hellofood, and car hailing app Easy Taxi. The company is founded and based in Nigeria, but is also active in North Africa. Rocket Internet, MTN, and Millicom have already invested in AIG.

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PERSONAL TECH

You’re actually only 3.57 degrees away from any other human being, says Facebook: The original “Six degrees of separation” experiment by Stanley Milgram was part of the bigger Small-world problem in 1967. While its scientific foundation is dubious at best, writes Libby Nelson for Vox, and its parameters restricted to people in the US who know each other on a first name basis, Facebook is challenging the notion using one of the richest data sets on the world. After crunching the numbers from the 1.59 bn users, Facebook found that the average degrees of separation between any two people is actually around 3.57. Mark Zuckerberg’s average is 3.17, what’s your average?

TECH

YouTube is taking on Netflix with original content, in the form of YouTube Red, a subscription based service that offers ad-free usage and a Spotify like service for USD 9.99 a month, USA Today reports. The big push for subscription began last Wednesday, with three made-for-YouTube movies and a new series starring YouTube’s most popular online star, Felix Kjellberg, better known as PewDiePie. With competition by Netflix, Amazon, and Hulu, who have morphed from places to watch old movies and programming, to creators of original content, YouTube plans on releasing 15-25 original productions this year, says YouTube Red original programming chief Susanne Daniels. YouTube hope to double this number by 2017, she added. Unlike Netflix and Amazon, YouTube will present new episodes weekly, as opposed to binge viewing.

THE WEEK’S MOST-CLICKED STORIES

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

• An Arab bn’aire shares his explosive views on Obama, Iran, ISIS, and what falling oil prices will do to the Middle East (Business Insider)
• No niqabs, no ‘hot shorts’: Egyptian women have a new dress code (Newsweek)
• In Egypt, second life for independent trade unions, by the murdered graduate student Giulio Regeni (Il manifesto)
• The new Nestle Crunch commercial, with a cameo by copywriter Eslam Hossam (Youtube) (tie)
• Tarek Amer isn’t sympathetic to GM (Youm7)
• In Egypt, medicines disappear from shelves as USD crisis bite (Reuters)

ON YOUR WAY OUT

Already reneging on your new year’s resolution of hitting the gym? Try a simple commitment strategy, economist Tim Harford suggests. Based on Nobel Laureate Thomas Schelling’s work a simple commitment strategy could be “to hand GBP 500 to a trusted friend, with instructions that they are only to return the cash if you keep your resolution.” Although it might encourage habit formation, Harford warns that financial commitment is not necessarily panacea. “Economists Heather Bower, Mark Stehr and Justin Sydnor recently published the results of a long-term experiment conducted with 1,000 employees of a Fortune 500 company. In this experiment, some employees were initially paid USD 10 for each visit to the company gym over a month. Some of them were then offered the opportunity to put money into a commitment savings account: if they kept exercising, the money would be returned; otherwise it would go to charity. The approach was no panacea: most people did not take up the option, and not everyone who did managed to stick to their goals. But even three years later, those who had been offered commitment accounts were 20 per cent more likely to be exercising than the control group.”

Men be shopping: In news unsurprising for any man who has to wear a suit to work every day, men actually spend more on fashion than women do per month — USD 75 for women versus USD 85 for men — according to a new study from Boutique @ Ogilvy. “The men’s wear market is expected to rise 8.3 percent by 2017, to $110.3 bn, eclipsing the projected 4.2 percent growth rate of women’s wear.” Just something else to cite when someone makes yet another tired “women be shopping” joke (video, run time 0:19).