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. Also next week: Enterprise GCC goes into beta. You can sign up here.

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SPEED ROUND, THE WEEKEND EDITION

People will always find a way to bypass capital controls (take note, Egypt): It’s not just using informal underground banks or deliberately overpaying for imports — some Chinese companies are using new ways “to spirit money away from the economic uncertainties of home and toward the safer shores of hard currency.” The WSJ has news that “at least one Chinese company is attempting a new way to beat Beijing’s tightening regime of capital controls: by faking a breach-of-contract lawsuit with an offshore entity which the Chinese company intends to ‘lose.’” The settlement money will be paid to overseas entities affiliated to the Chinese companies.

…Speaking of economic challenges: Daesh is facing budget trouble, sources are telling the AP. The terrorist group has reportedly resorted to measures like asking residents of Raqqa to pay utility bills in black market USD and is now releasing detainees for the price of USD 500 a head. Airstrikes have hit Daesh’s cash, weapons stores and oil infrastructure, which was already being impacted by lower international oil prices. The fighters have also had their pay cut, possibly in half, and they are frustrated: “Their morale is down,” one source said. However, this might not be a “fatal” blow, one researcher believes: “I still don’t see internal revolt as what’s going to be the outcome. It’s more like a scenario of gradual decay and decline.”

Cheap oil will make you fat (and could slow down the global economy): Low oil prices will change the world, Tim Harford suggests. “The rule of thumb has always been that while low oil prices are bad for the planet, they’re good for the economy … That represents the conventional wisdom, as well as historical experience,” but it is not that simple. Harford says the big winner from cheap oil, American consumers, could be using the spare cash to pay off debts accumulated in times of more expensive oil and losers, Saudi Arabia and Russia, could be cutting on investment spending. This would hamper global economic growth and also slow down the rate of innovation in the clean energy sector. On a more micro level, low oil prices are likely to make people fatter; “That is partly because, when oil prices are high, people may get out of their cars and walk, cycle or get public transport. Cheap gasoline, on the other hand, puts disposable income into the pockets of families who are likely to spend it on eating out.”

…one other way things are already changing: Pirates no longer bother trying to steal oil. Pirating a crude oil tanker is a tough job; it would involve “hijacking the original tanker, disabling its tracking devices, taking it to a location where it can’t be spotted, and transferring thousands of heavy barrels to a different vessel that can then be sailed away. Stealing crude also means finding a buyer for it, or else getting involved in the messy and dangerous business of illegal refining.” At around USD 30 per bbl, piracy is no longer a profitable business as it was a few years back when oil was over USD 100 per bbl, Cassie Werber writes for Quartz.

Bloomberg embraces its inner BuzzFeed with the headline “Another oil crash is coming, and there may be no recovery” as a bait-and-switch teaser for a great little video (running time: 3:39) arguing that the notion of “peak oil” is nonsense and that the real question is “what would happen if we just stopped buying the stuff?” It’s all part of a long dive into why the rise of electric cars will cause the next oil crisis. Saying “it’s looking like the 2020s will be the decade of the electric car,” Bloomberg notes that falling battery prices “are on a trajectory to make unsubsidized electric vehicles as affordable as their gasoline counterparts in the next six years … That will be the start of a real mass-market liftoff for electric cars” — and the beginning of the end for Big Oil.

We’re going to go out on a limb and say that standing desks will be the next big “thing” in Egypt — they’re simply too popular abroad now for us to resist their pull. Particularly the lead photo in “6 things I learned after switching to a standing desk.” Need an introduction? Lifehacker has an overview and a short look at 12 months spent at a standing desk, while Wirecutter has reviews.

It’s time to eliminate the EUR 500 bill (and the USD 100 bill, too): The European Commission is working with the European Central Bank to examine the role of the EUR 500 bill, with the possibility of eliminating it from circulation. Why? It might have a role in terrorist finance and, as Peters Sands writes, the USD 100 and EUR 500 notes are the payment instruments of choice for criminals across the world. They also have a very little role in the “legitimate” economy as, even in Germany, “one of the more cash-intensive countries in the Eurozone,” a tiny fraction of 1% of the population carries around a EUR 500 note at any one time, with many shops refusing to accepting altogether. Yet, there are over EUR 300 bn worth of the EUR 500 bills have been issued, so “someone has them,” Sands notes accurately. The gains from eliminating the note would not be far reaching, however. While cutting them from circulation would not eliminate tax evasion, crime, terrorism, or corruption, it “would make life harder for those pursuing such activities, raising their costs and increasing the risks of detection” but “would not on its own stem the flow of funds to support terrorism.” The best approach, Sands argues, would would be an international drive to eliminate all high denomination notes in rich economies (as middle-income economies hardly have denomination notes of any real significance); this would stop the substitution between high-value notes like the USD 100, CHF 1,000, and JPY 10,000, for example.

Even poorly performing employees get bonuses, according to Bloomberg. Over a quarter of 120 employers surveyed by HR consulting firm Willis Towers Watson said they give performance-based bonuses to employees who “fail to meet expectations,” which, as far as anyone with any sense of reason can tell, entirely defeats the purpose. To add insult to injury, the performance reviews used to base bonuses on largely doesn’t work: “Requiring employees and managers to fill out forms consumes time and disrupts the normal flow of work. The questions are often subjective and not tied to meaningful goals or work. Managers rush through reviews just to get them done, and employees don’t like feedback.”

Straight Outta the Department of D’uh! Social media marketing firm We Are Social ranks Egypt as having one of the slowest internet speeds, according to Cairoscene. Egypt was placed dead last in their Digital in 2016 which samples 31 countries to reflect the international digital trends. The full report itself aggregates global digital, social, and mobile data from 232 countries. Average Internet speed for fixed connections in Egypt is about 1.7 MBPS, falling behind Nigeria, which had an average speed of 2.5 MBPS. 48 mn of Egypt’s 92 mn people are active web users, with over half the population being connected over 3G. But thank God for small miracles (or giant monopolies) as there are 94 mn mobile connections, with 23 mn being active mobile social media users working tirelessly to bring you the best (and often more controversial) memes.

RIP, Netflix? Remember our warning a few weeks back that Netflix would be turning off your ability to use a VPN to get into Netflix USA or Canada or whatever? About half of us here have had Netflix rather obtusely tell us that we can’t keep watching until we disable our VPNs. That means we’re going to be stuck with the ersatz Egyptian version that lacks many (most?) of our favourite television shows until someone finds a workaround. We’ll have more for you when there’s news.

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WATCH THIS

Comedy for economics nerds: The self-proclaimed “stand-up economist” Yoram Bauman presented his “Funniest Papers in the History of Economics” at this year’s American Economic Association Humor Session. Entries include “classics” like Paul Krugman’s A Theory of Interstellar Trade, Jim Heckman’s The Effect of Prayer on God’s Attitude Towards Mankind, and Dennis Snower’s Macroeconomic Policy and the Optimal Destruction of Vampires. If you find this funny, you’re an economics nerd. (Run time 09:32)

It’s almost that time of year again, folks. Game of Thrones season six premieres on April 24 and a new trailer (run time 1:19) has just been released that’s not only ominous but leaves us wondering: Is Jon Snow really dead? Will winter ever actually come? Whatever happened to Bran (aka the one no one cares about)? Will George R.R. Martin die before he ever gets a chance arbitrarily kill off another character? So many questions.

Apple prepares for a protracted battle with the FBI, Justice Department, the White House, and the court of public opinion, with the case likely to end up in the U.S. Supreme Court: For anyone who has been vaguely aware that Apple has been resisting an order from the FBI to unlock the iPhone belonging to San Bernardino terrorist Syed Rizwan Farook, but is uncertain as to what the story is actually about, the facts of the case are as follows.

The attack: Farook and his wife Tashfeen Malik shot dead 14 people and injured 22 — Farook’s former co-workers — on 2 December at the Inland Regional Center in San Bernardino, California, after which the couple fled and were killed in a police shootout four hours later.

Where does Apple come into the story? “According to senior Apple executives, the FBI’s first call to Apple for help came on Saturday, Dec. 5, at 2:46 a.m. With a subpoena, the bureau obtained [from Apple] subscriber data and other details,” Ellen Nakashima and Mark Berman from the Washington Post reported. The following day, “the FBI, with a warrant, obtained data [from Apple] from Farook’s iPhone that had been backed up to iCloud. That backup contained information only through Oct. 19, six weeks before the attack.” Then, without informing Apple or seeking its advice, the FBI directed the San Bernardino Public Health Department, Farook’s employer who had issued him the phone, to reset the iPhone’s password.

What’s the significance of the FBI-ordered password reset? This was an egregious mistake, as it closed off the possibility of retrieving information which had been uploaded to iCloud from mid-October to December, information which could have been retrieved had the phone been connected to a WiFi network with which it had been familiar, such as Farook’s home. Rather than tell Apple what happened, the FBI left Apple engineers to find out the hard way, discovering the iPhone’s password had been reset at some point within the first 24 hours the phone was taken by the feds.

The FBI initially attempted to avoid any culpability in the password reset, saying in their court filing (pdf) [The San Bernardino Health Department], in an attempt to gain access to some information in the hours after the attack, was able to reset the password remotely.” This prompted the health department later that same day to issue a statement on Twitter saying they were explicitly ordered by the FBI reset the phone’s password.

Further, Apple argues they may not have been later compelled by the court to now create a backdoor if the password had not been reset.

What is the FBI now asking Apple to do? By court order, the FBI wants Apple to write new software to allow access into the phone, a new operating system. Apple is fighting this on the basis that the software, once created, may be easily reproduced by criminals and terrorists, not to mention repressive regimes around the world, putting all their hundreds of mns of customers’ at risk.

Who’s on whose side? Google, Facebook, Twitter, WhatsApp, Microsoft’s CEO Satya Nadella, and the ACLU have all expressed their public support for Apple in what is shaping up to be a years-long battle. Who has come out against Apple? The NSA, Donald Trump, and Bill Gates, as reported by Yahoo Finance. Further complicating matters, the former head of the NSA and the CIA, Michael Hayden, has come out in measured support of Apple, saying “I think [FBI director] Jim Comey is wrong.” However, he says he is not convinced that is the case in this current request and that the burden of proof is on Apple. (Watch Hayden speak to Charlie Rose on CBS This Morning, running time: 8:41)

Apple CEO Tim Cook sat down with ABC News on Wednesday for an interview to explain the facts and implications of the case. (Watch, running time: 29:42) For a shorter take on some of the implications surrounding the coming legal battle, CNN Money has a 2-minute debate here.

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DOCUMENTARY OF THE WEEK: Terms and Conditions May Apply. It may be safe for us to say that unless you are one of those OCD people, you and none of the people you know have actually read the terms and conditions of social media websites, apps, Google products and a slew of other services. And you may be that much less secure for it. The documentary does a great job at analyzing how dangerous it is for advertisers, marketers, and government surveillance programs to know every detail about your life through your digital footprint. And all because you hit “accept” instead of reading those very deliberately annoying bold, small font, and extremely long terms. The movie goes beyond security vs. privacy. Finding it hard to get critical health insurance all of a sudden? Facebook may have given a data aggregator the location of that bar you were at, that statistically happens to be frequented by alcoholics. Got rejected for a job interview despite stellar credentials? Again, some data company must have directly snitched you out. Beyond not using these sites, there is really nothing you can do about it. Real life examples the documentary uses include a raid on a normal guy’s house for quoting Fight Club. Check it out on Netflix or iTunes (depending on which store you’re on).

READ THIS

“For years the drinks industry has poured money into a music scene that celebrates alcohol. How will they react to trends that show their target audience drinking less?” the FT’sr Ludovic Hunter-Tilney writes in a piece (paywall) about the decades-long link between the music and alcohol industry. “Self-diversification is rational in a music industry whose traditional source of revenue — recorded music — has plunged,” he writes. But “millennials lead more economically precarious lives than previous generations,” forcing the alcohol industry to develop new tactics to attract them.

And at the risk of being dubbed “The Wino Edition,” we note Bloomberg reports that sparkling wines are driving world consumption growth through to 2019. “Sparkling wines are poised to lead growth in the global wine market from 2015 to 2019, with rose wines and premium labels also driving expansion, according to the Bordeaux-based international wine and spirits exhibition Vinexpo.”

You’re not a devil worshipper, right? If you’re an Egyptian of a certain age (or you’ve just lived here a really long time), you will remember a time when a love of heavy metal meant you were a devil worshipper, full-stop. Your parents knew it. Your teachers knew it. The cops certainly knew it back in ‘97. Hell, even the FJP got in on the act. With heavy metal fans once again standing accused of having sympathy for the devil, we bring you none other than the Wall Street Journal to reassure you all that we’re not alone: “Today’s ‘world music’ isn’t Peruvian pan flutes or African talking drums. It’s loud guitars, growling vocals and ultrafast ‘blast’ beats. Heavy metal has become the unlikely soundtrack of globalization. Indonesia is a metal hotbed: Its president, Joko Widodo, wears Metallica and Napalm Death T-shirts. Metal scenes flourish in Latin America, Eastern Europe, Russia and Scandinavia…” Read: ‘The Weird Global Appeal of Heavy Metal’

LISTEN TO THIS

Meditation, sleep as ways to advance your corporate career: Leaders of high-intensity, high-performing organizations are beginning to recognize the important effects of mindfulness, exercise, and sleep on the body—and the brain, the McKinsey podcast suggests. We need to be able to disconnect, step back, and take a breath. The podcast argues that meditation could be beneficial. It is “not down time,” author and McKinsey alumna Caroline Webb argues, “it’s simply investing in your ability to have more up time—is something which I’ve seen at the heart of everybody who makes a difference in the way that they’re living their lives, and also in the way that their teams around them are living their lives.” We also need to sleep more, specialist Els van der Helm says; you need sleep to be a good leader, but corporate bosses often report that they are neither getting enough nor good quality sleep and they [erroneously] think that this has no significant impact on their performance. (Run time 25:38)

The [very odd] world of K-pop: You might not have heard of it, but K-pop generates bns in sales each year and is followed by hoards of people globally. In Korea, K-pop “idols” were held to very strict rules. The aim was to create a fantasy, as this meticulously-produced episode of Radiolab discovers. Fans needed to fantasize about artists who are “available” and that meant that record label held artists to agreements including them not being allowed to be in any sort of relationship. That was until Korean reporters took a cue from Western paparazzi and started invading the artists’ private lives. Now, the main question there is whether fans want to know *that* much about their idols or not — is it worth ruining the “fantasy”? Besides exploring the world of K-pop, the issue is about what privacy means and what it is like when violated. (Run time 37:53)

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

SOMETHING THAT MADE US THINK

Game theory and the nomination of supreme court justices: Scotus Blog’s Tom Goldstein engaged in some serious application of game theory techniques to ponder how the politics of the next nomination to the U.S. Supreme Court will play out following the sudden death of Justice Antonin Scalia. Goldstein’s analysis is deep and profound, weighing strategically the possible moves by the current administration as well as the Republicans’. The administration has two priorities: “fill the Scalia seat by getting a nominee confirmed … gain as much political benefit as possible and exact as heavy a political toll as possible on Republicans, particularly in the presidential election.” Republican priorities are the exact opposite. He comes out with this being the most likely scenario: “Attorney General Lynch is the most likely candidate.  I think the administration is likely to nominate her, that the Senate will initially refuse to proceed with the nomination but ultimately accede after delaying the process significantly, and then vote her down on party lines.  At that point, Republicans will slow-walk a follow-up nominee and claim that it is too close to the election to act on the candidate.”

How mythbusting can backfire: The human brain is as much an enigma as it is a powerhouse, with our memory being one of the least understood of its functions. Why is it that so many people believe a misconception? And stranger still, why is it that so many people believe misconceptions despite efforts to correct them? (see: Do People Only Use 10 Percent of Their Brains?) Researchers from the Department of Communication Studies and Media Research at LMU Munich found that with myth debunking “people start to misremember originally false information as true, but only rarely misremember facts as false.” They also found that an emotional attachment to a topic creates what’s called Flashbulb memories; very vivid memories of particular experiences. The answer lies with how we remember, according to MIT research. Researchers were able to trigger false memories in mice by using optogenetics, a new technology that allows cells to be selectively turned on or off using light.

HEALTH

Drinking coffee won’t kill you. In fact: “Coffee has been linked to, among other things, reducing tinnitus risk, increasing driver safety, cutting melanoma risk, galvanizing workouts, surviving colon cancer, living a longer life and avoiding death.” That’s the primary takeaway from an otherwise limp, fence-sitting piece from the New York Times’ Well blog that ends with the stunning revelation: “If you don’t like it, my goodness, it’s not worth it.” Read: ‘I don’t drink coffee. Should I start?’

ENTREPRENEURS

Take that, VC: The Atlantic makes a pretty good case for the “wrongheadedness” of the notion that “every business should scale up.” The to-the-point piece uses a coffee shop and (pretty apropos for Egypt this week) the conflicting approaches of two microfinance lenders to make the point. “People act more responsibly in the context of personal relationships that are meaningful to them than in strictly commercial transactions. In fact, loyalty sometimes even trumps economic rationality: going that extra mile to get the perfect cup of coffee, or paying a loan back when the opportunity exists to default. This is what the shift from boutique to mass-manufactured cuts out.”

PERSONAL TECH

If you jumped on the new Apple TV bandwagon like some of us here at Enterprise, you know full well the feeling of wanting to hurl the new remote at the nearest wall. Not only is the touch surface incredibly sensitive, but the software is so buggy you wonder if you accidentally picked up a Windows device. However, some of this could potentially change with a new update that alters the way users scrub through videos. The change is available on the latest tvOS 9.2 beta, which is expected to be released around the March 15 event.

You can finally have Morgan Freeman as your GPS navigation voice: That’s right folks, it has happened at last. Google has added Freeman’s voice to its free navigation app Waze. The stunt is actually a marketing tie-in to London Has Fallen, the sequel to Olympus Has Fallen, where Freeman resumes his role as US Vice President. The best part is Freeman will address you as the US president with lines like “The time has arrived, President Wazer. The world awaits your commands.”

TECH

Tech acquisitions hit all time high in 2015, with USD 313 bn in announced agreements including 10 mega projects (value at over USD 5 bn) that include the largest ever tech transaction. The number is up 82% from the USD 171.6 bn announced in 2015. This demonstrates that tech has become so critical that the need to own it is driving up demand for the sector despite the choppy stock market, reports Venture Beat. Only 278 transactions actually closed, totaling USD 147.7 bn in 2015. Those figures for closed transactions were down from 2014’s 289, which were valued at USD 164.8 bn. The spread between announced and closed isn’t unusual, the fact that the stock market started cratering in the fourth quarter could have scuttled a number of deals that were in the closing stages.

…and while we’re on Big Tech, this earnings season has not been kind. The tech-heavy NASDAQ is down almost 15% from the start of the year. The list of biggest winners and losers has several surprises, including the fourth-biggest loser Apple, which lost its title (briefly) as the world’s most valuable company. With flat iPhone sales and projections of a decline in the current quarter, the company is facing one of its most challenging years in some time, at least in the eyes of Wall Street. Since April 2015, Apple’s stock has fallen from USD 132.65 to USD 93.70 last week.

Get ready to be hit by a hurricane of nostalgia: Coleco Chameleon, a retro game console that runs games of off old-school cartridges, made its debut at the New York Toy Fair. While the company plans to sell cartridges for classic games, it will also sell them for new games created by indie developers. Now what would really take this over the edge is if it came with a function that periodically froze games as you were playing, with the only fix being one or two good blows into the cartridge.

No matter where you stand on the Apple vs. FB(EYYYYE) beef, it would appear that internet is speaking its preference. Encrypted messaging app Telegram now has 100 mn users worldwide, up from 60 mn in May, announced its founder and CEO Pavel Durov at the Mobile World Congress in Barcelona. While these are small potato figures compared to Whatsapp and Facebook Messenger, it is a milestone for a three-year company. “Every day, 350,000 new users sign up for Telegram,” Durov said. “And we have zero marketing budget.” Score one for the FBI: Daesh used the app, but was kicked out in October. But Durov is undeterred, stating that terrorists who want encryption will find a way to get it anyway. He developed the app with his brother Nikolai in an effort to avoid prying eyes of Putin’s intelligence agencies. With government surveillance programs getting larger by the day, it is not surprising that they will continue to contend with sophisticated methods to avoid them.

THE WEEK’S MOST-CLICKED STORIES

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

• Central bank governor Tarek Amer interviewed by Ibrahim Eissa (Youtube)
• African Development Bank projects in Egypt — an overview (AfDB, pdf)
• African Development Bank projects in Egypt — individuals benefitting from them (AfDB, pdf)
• OSN’s Amr Adib rips into Mortada Mansour after being threatened. (Youtube)
• Imports arriving by air cargo exempted from import controls (Al Mal)
• Barclays Said to Weigh Sale of Egyptian Unit Amid Bank Overhaul (Bloomberg)

ON YOUR WAY OUT

Why are Italy so bad at rugby? The Economist is puzzled why a country that is “generally good at sport” and ranked as the “ninth-most athletic nation in the world” so bad at rugby. “Italians benefit from being both numerous … and prosperous,” and background socioeconomic factors “responsible for about half of the difference between nations’ sporting prowess,” and although Italy does outperform countries of size and status in terms of sports achievement, rugby continues to lag. What’s to blame for Italy’s failure then? Neglecting youth development, The Economist suggests. At the youth level, Italy has been focusing on size rather than skill. Along with arguably inferior coaching at that level, the Italian rugby football union targets taller and heavier players for development at the underage level while neglecting more skilfull ones. This puts into perspective events like the 40 – 9 thrashing at home by England in their match two weeks ago (highlights: run time 02:06).

Rejoice avid Facebook users, you will now be able to respond to posts using more than just the “like” button, according to Bloomberg. We now have five more choices: “love,” “haha,” “wow,” “sad,” and “angry.” Alas, Facebook refused to give us the “dislike” option, which many waited for with bated breath. We were hoping for things along the lines of, “not this again,” “get a hobby,” and “don’t you have a job to be doing right now?” Facebook officially rolled out the feature on Wednesday in the United States and elsewhere, and Facebook users in Egypt will wake up today to find the feature has now been enabled for them as well.

What do famous novels look like without words? Adam J Calhoun analysed punctuation in novels by taking out all of the words used. “They can be quite distinct … the wild mix of symbols can be beautiful,” Calhoun describes the array of wordless punctuation marks, “punctuation does more than simply carve out a space for words. It separates them.”