Friday, 15 April 2016

The Weekend Edition


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.


We recently launched the beta version of our Enterprise GCC edition, and are now publishing Sunday-Thursday at 3 am UTC/ GMT (7 am UAE, 6 am KSA, 5 am Cairo), give or take a few minutes. We’re in beta, after all. You can sign up via this link and may view the Enterprise GCC site online at Comments, suggestions and criticisms are always welcome at

Speed Round, The Weekend Edition

Speed Round, The Weekend Edition is presented in association with

Fly me to … Alpha Centauri: Last Tuesday marked 55 years since Soviet Union cosmonaut Yuri Gagarin became the first man in space, leaving Earth in the Vostok 1 spacecraft, in which Gagarin spent 108 minutes, completing the first human orbit around the Earth before landing back on Soviet soil. We’ve come a long way since then, and superstar physicist Stephen Hawking thinks we should be aiming much farther. Hawking announced his backing of a USD 100 mn research program to send a computer chip-sized spacecraft to Alpha Centauri, our nearest star, 40 tn km away. The program was launched by Russian bn’aire Yuri Milner and supported by Facebook founder Mark Zuckerberg. With current technology, it would take about 30,000 years to get there, a future so distant, the survival of humans isn’t even guaranteed by the time it arrives.

In fact, the issue of the human race’s survival is in the forefront of the program backers’ minds: “if we are to survive as a species we must ultimately spread out to the stars … Astronomers believe that there is a reasonable chance of an Earth-like planet orbiting one of the stars [in] the Alpha Centauri system,” Hawking says. Caveating it with a big “if it works,” the NYT explains the concept, “a rocket would deliver a ‘mother ship’ carrying a thousand or so small probes to space. Once in orbit, the probes would unfold thin sails and then, propelled by powerful laser beams from Earth, set off one by one like a flock of migrating butterflies across the universe. Within two minutes, the probes would be more than 600,000 miles from home — as far as the lasers could maintain a tight beam — and moving at a fifth of the speed of light. But it would still take 20 years for them to get to Alpha Centauri. Those that survived would zip past the star system, making measurements and beaming pictures back to Earth.” Milner believes we can be deploying our first “nanocraft” within a generation.

Back on good ol’ boring Earth: What is the optimal size of government to maximize economic performance, Noah Smith asks, “If bigger is better, what about a global government?” Smaller local governments were the solution, economist Charles Tiebout opined in 1956; “local governments knew more about their people’s needs than distant central governments, and so the best system was one where local governing units — city-states, essentially — offered different packages of taxes and public services.” Smith says there are several reasons why Tiebout’s proposition can fail, one way is because “many of the services governments provide are what economists call public goods. These are things that the private sector either can’t or won’t provide. The classic examples are national defense, police, courts and support for basic research. But many other things, like roads, electrical grids and ports, are usually in short supply when left to the private sector… That throws a big wrench into the Tiebout model, because there are many different kinds of these goods, and the amount people want of each one tends to differ a lot.” A second issue relates to incentives that won’t always be “right.” “ Some governments may decide to maximize the size of their tax bases. Others might care only about the welfare of their citizens, while others might be beholden to special interests.” Smith adds that there are plenty of other problems, including the difficulty coordinating between a large number of city states and the increased probability of conflict.

Japan could be heading to a “full-blown” solvency crisis, warns former IMF chief economist Olivier Blanchard, hinting that the country is “[running] out of local investors and may ultimately be forced to inflate away its debt in a desperate end-game.” The zero-interest rate is disguising Japan’s debt problem, likely to hit 250% of GDP this year and spiralling upwards unsustainably. While Japanese retirees have, surprisingly, been willing to hold Japanese debt at 0%, “the marginal investor will soon not be a Japanese retiree,” Blanchard notes, “if and when US hedge funds become the marginal Japanese debt, they are going to ask for a substantial spread,” killing the “illusion” of solvency “possibly in a sudden, non-linear fashion.” This could also spread contagion to Europe, given “its own Japanese pathologies of low-growth and bad demographics.”

In the future, we will photograph everything and look at nothing: From the New Yorker’s blog: “From analog film cameras to digital cameras to iPhone cameras, it has become progressively easier to take and store photographs. Today we don’t even think twice about snapping a shot.” And then promptly do nothing with it, fears geek-turned-journalist turned-VC Om Malik in a nice, brief piece that’s one part meditation on the future of photography, one part thoughts on the next generation of photo software. Geek Bonus: Malik is known to literate tech geeks everywhere as the founder of GigaOm, the one-time darling of independent tech media that went bust last year and was then re-launched by a new buyer as a pale imitation of the original.

Uh, can we get a day off too?: Venezuela has made every Friday in the months of April and May a non-working day to save electricity as a prolonged drought threatens water levels to a “critical threshold” at hydro-generation plants, Bloomberg reports. President Nicolas Maduro said other measures include asking large users to generate their own electricity for nine hours a day and heavy industries to cut consumption 20%. Maduro shut down the country for a week over Easter holiday last month, which saved almost 22 centimeters of water at Guri Dam.

A guide to interpreting email sign-offs, by The New Yorker’s Emma Rathbone: An “all the best” sign-off means the sender truly wants the best for you, which is far from “all best,” which is a warning sign “this person has gone completely off the rails. You should be very nice to her, because she is obviously having a personal problem.”

While we’re on email etiquette, Egypt must immediately stop writing business emails that begin with “Dears,” because when we do, this image comes to mind for much of the rest of the world. And when we write “please feed me back,” a phrase which only exists in our minds and those of others we have infected, it’s this image that comes to the mind out parties outside our borders.

Watch This

How has the digital economy hurt the real economy? Media theorist Douglas Rushkoff believe it’s actually the old model of growth being implemented into digital technology that’s hurting business. Rushkoff first highlights how chartered monopolies and central currency first eliminated peer to peer trade, giving birth to the earliest form of the modern day corporation. The idea of central currency that is paid back with interest also gave birth to the notion of “you need more money next year than there was this year,” which worked well for a while, but as the need for new land and resources arose, so did technology that created virtual space. “We believed that digital technology and the World Wide Web and computers would really create a new place, a new virtual territory for us to colonize. And it just turns out what we’ve been colonizing for the last 20 years is human attention and human time. And now it looks like we’re even running out of that,” said Rushkoff. (run time 12:54)

DOCUMENTARY OF THE WEEK: Cadillac Desert, a PBS adaptation of a Marc Reiser book of the same name, this documentary looks at the immense development works that went into turning the arid and desert landscapes of western North America into one of the greatest economies of our times. At the heart of it stood the basic question of how to bring water to the desert. This feature explores the intrigue, the wars, and the herculean efforts that went behind answering this riddle. From the Owens Valley war that made Las Angeles to the Hoover Dam and Las Vegas, Cadillac Desert is at its core a cautionary tale of how the need to change nature for development purposes can backfire in the long term. With California currently battling with a severe drought, the lessons here should not be lost on nations in our region which are taking a short term view on water policy which can have generations spanning consequences. Part 1: Mulholland’s Dream (run time: 1:23:51); Part 2: American Nile (run time: 54:11); Part 3: Mercy of Nature (run time: 54:37); Part 4: Last Oasis (run time: 53:48)

Listen to This

Lots of music is truly similar, it’s fascinating, and now we’re all circle of fifths detectives. Gimlet’s Surprisingly Awesome podcast put together one of its best episodes yet, providing a crash course in music theory and explaining the circle of fifths. The episode starts at the very basic level of explaining what is a pitch, moving up gradually to chord progressions. The explainer reaches the circle of fifths, which is prevalent in a large number of music pieces from Mozart’s Piano Concerto No. 17, to I Will Survive, Fly Me to the Moon, and The Simpsons’ theme song, which when mashed up together, will “actually fit on top of each other perfectly.” Co-host reaches a eureka moment when she asks “DJs are really just scammers, they’re just exploiting a fundamental component of music theory. When you’re composing, do you sit down and do you say to yourself like ah, I think this is a moment where I’d like deploy a fifth?” To which composer Nicholas Britell answers: “yeah, absolutely. It depends. Especially where you’re writing film music where you’re really trying to think about things that are happening dramatically in a film and you’re trying to imagine the way that your music can emotionally relate to those things.” (Run time 35:15)

Wamda Capital launched a podcast series: The new series plans to host guests from “all over the MENA region … to spread knowledge and awareness about tech, tech issues, and startups here in the region.” In the inaugural episode, Partner Fares Ghandour talks with CEO Fadi Ghandour and Managing Partner Khaled Talhouni about Wamda Capital’s investment strategy. They also touch on valuation and regional market size, while providing advice to startups. (Run time 32:55)

Something That Made Us Think

Want to live a decade longer? All you have to do is be one of the wealthiest living Americans. According to research in the Journal of the American Medical Association, a 40-year-old man in the top 1% can expect to live to 87 compared to 73 for his counterpart in the bottom 1%. And while this isn’t exactly new information, the JAMA research shows “in the starkest terms yet how disparities in wealth are mirrored by life expectancy, and how both are getting worse,” Bloomberg writes.


Eat your heart out, Hooters: Vietnamese Nguyen Thi Phuong Thao is set to be South East Asia’s first self-made female billionaire when her her VietJet Aviation, Vietnam’s only privately-owned airlines, IPOs. The airlines has captured a 30% stake in the market after being around only a few years. The secret? Bikini-clad flight attendants. Because of the rudimentary and time-tested gimmick of [ahem] sells, VietJet is likely to surpass national carrier Vietnam Airlines as the nation’s biggest domestic carrier this year, according to CAPA Centre for Aviation. The IPO, which Thao hopes will take place in three months’ time, will make it more valuable than South Korea’s Asiana Airlines Inc. or Finnair Oyj. VietJet’s revenue tripled to VND 10.9 tn (USD 488 mn, and yes the irony of the currency’s name has not escaped us) in 2015, while net income rose to almost 1 tn (USD 45 mn), Bloomberg reports. It almost seems wondrous why no one thought of it sooner. But considering Vietnam’s conservative culture, it may have needed a woman to cross into taboo territory. Thao is a formidable businesswoman. The 45-year old holds a 90 percent stake in Ho Chi Minh City’s Dragon City development and majority stakes in three resorts in Vietnam. She is the vice-chairman of the private Ho Chi Minh City Development JS Commercial Bank. And by her very stature in regional business she is unfazed by any controversy surrounding her airlines. "We don’t mind people associating the airline with the bikini image. If that makes people happy, then we are happy" she tells Bloomberg.

Personal Tech

FBI paid professional hackers one-time fee to crack San Bernardino iPhone
The Washington Post is reporting that the FBI has managed to crack the San Bernardino iPhone by enlisting the help of professional hackers “who discovered and brought to the bureau at least one previously unknown software flaw,” according to anonymous sources. The information was used to create hardware that could unlock the four-digit pin code without triggering a security feature that would erase all the data. FBI director James Comey said the solution only works on iPhone 5Cs running iOS 9, while Apple has said it would not sue the FBI to gain access to the solution. However, the US Government has yet to decide whether they will disclose the security flaw to Apple.

‘Google’s Goals Could Be One Of The Largest Behavioral Science Experiments Ever Conducted’: On Wednesday, Google has introduced a new feature, ‘Goals’, to its popular Calendar app, in an effort to turn its users into better human beings. The new tool uses artificial intelligence to help people set up a schedule to fit in all their goals, such as exercising or learning a new language. The user merely has to pick a specific activity, then the feature would ask several questions to look into how often something needs to happen and how long does it last, and the app will set up a time for that activity. The app also doesn’t easily let you get away from not achieving such goals, as it will keep rescheduling that activity if something gets in the way. Elizabeth Harris of Forbes sheds light on how behavioral science has been embraced by almost everyone from the US government to global agencies such as the World Bank, however, with Goals behavioral science now has “the world’s largest potential pools of test subjects.” The main notion is to address the gap between short-term demands and long-term ambitions, that she argues is probably the biggest reason we don’t accomplish things we’d love to do.


Yup, your grandma’s on Facebook, and she’s staying. Deal with it: Facebook appears to have been skipping a generation, in the ‘wrong’ direction. Facebook added 12.4 mn new users age 55 and older in 2014, an 80.4% growth, according to iStrategyLabs’ 2014 demographic report which used data from Facebook’s Social Advertising platform. The Pew Internet and Life Project estimates that 55 million seniors will be on Facebook by 2020. As is the way with politics, seniors may now being actively courted by digital media companies and web-based advertisers, a fact which could push for more senior-friendly features on social networking cites, Vice reports. According to Forbes, those aged 65 and above have 47 times the net worth of households made up of people ages 35 and over, and are generally more financially stable. What’s the appeal to grandma, you may ask? Well, it’s the same reason why I got on it. Because all my friends and family were doing it too.

The Week’s Most-Clicked Stories

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

  • This essay got a high-school senior into 5 Ivy League schools and Stanford (Business Insider)
  • British tabloids lost their minds over “alien” structure in Egypt. (Check out the photo. Read in: Mirror. The Sun. Daily Mail.)
  • Harvard University hosts Egyptians Abroad for Democracy worldwide conference on human rights in Egypt (press release)
  • Congress ponders ‘Marshall Plan’ for Egypt (Al Monitor)
  • Short film: “A Resident of the City” (video)

On Your Way Out

The folks over at Polygraph have put together a mammoth project: The largest Ever Analysis of Film Dialogue by Gender: 2,000 scripts, 25,000 actors, 4 mn lines. Surprise to none, men nabbed the majority of lines in 88% of the films analysed. “It was hard to find a subset that didn’t over-index male. Even romantic comedies have dialogue that is, on average, 58% male.” In fact, even in movies where women are the lead, men seem to have the majority of lines, “Pretty Woman and 10 Things I Hate About You both have lead women (i.e., characters with the most amount of dialogue). But the overall dialogue for both films is 52% male, due to the number of male supporting characters.” Do better, world Hollywood.

Fallen angels have been on the ups in recent months, says Bloomberg. The reason? Our old friend low oil prices, which have caused the fallen angels — corporate bonds rated investment grade at one point, but now plummeting to junk — to now comprise USD 22 bn of the USD 52 bn in securities eligible to join the Bloomberg Global High Yield Corporate Bond Index in April. “The degree of the movements was very unusual — the underperformance compared to the double-B index of the recent downgrades was over four times what we have historically seen. The atypical magnitude is primarily attributable to the fact that most of the recent falling angels were energy names. If we exclude the energy names from our sample set we see that performance is by and large normal,” said Citigroup analysts led by Stephen Anzak in a note published on 8 April.

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