The Weekend Edition

“How to hide USD 400 mn”is simply one of the best pieces of financial / investigative journalism we’ve read in ages. It tracks one woman’s quest, with her lawyer, to unravel the Byzantine network of offshore vehicles her husband used to hide his wealth when made the decision he would soon be her ex-husband. Read it even if you think you know this world: We thought ourselves relatively well-versed (for lay folk) in the black arts of offshore finance, but we’d never heard of Cook trusts.

Have our jobs become prisons from which we don’t want to escape? The Economist’s Ryan Avent offers neither prescription nor condemnation in this meditation on the downside of doing work you love: “My work – the work we lucky few well-paid professionals do every day, as we co-operate with talented people while solving complex, interesting problems – is fun. And I find that I can devote surprising quantities of time to it. … What is less clear to me, and to so many of my peers, is whether we should do so much of it. … It follows us home on our smartphones, tugging at us during an evening out or in the middle of our children’s bedtime routines. It makes permanent use of valuable cognitive space, and chooses odd hours to pace through our thoughts, shoving aside whatever might have been there before. It colonises our personal relationships and uses them for its own ends. It becomes our lives if we are not careful. It becomes us.” Read “Why do we work so hard?” in The Economist’s 1843 magazine

Elon Musk inches closer to one-stop shop for all home energy needs: Following the USD 2.6 bn merger of Solarcity and Tesla last month, Chairman Elon Musk is consolidating his plan to create a sustainable energy company, writes Natalie Shoemaker for BigThink. The merger allows Tesla to sell all-electric goods under one unified brand, especially when considering the Powerwall home battery from last year, and the new re-imagined solar tiles for rooftops. The original Musk Master Plan from 2006 can be summarized into: Build sports car, use that money to build an affordable car, use that money to build an even more affordable car, while doing the above also provide zero emission electric power generation options. Don’t tell anyone. The SolarCity merger plays into Musk’s revised Master Plan, Part Deux, which can be summed as: Create stunning solar roofs with seamlessly integrated battery storage, expand the electric vehicle product line to address all major segments, develop a self-driving capability that is 10x safer than manual via massive fleet learning, and then make it so your vehicle can make you money when you’re not using it.

This is all just a mainland America thing, right? Nope. One day after the acquisition of SolarCity, Tesla tweeted that Ta’ū, an island in American Samoa, is running on nearly 100% solar energy thanks to 5,300+ solar panels and 60 Tesla Powerpacks. Before solar, Ta’ū used 109.5k gallons of imported diesel annually, which cost it USD 8 mn every year and made it reliant on other countries to run its generators. Now stop for a moment and consider we’re one of the most ideally-situated countries in the world when it comes to solar power and it’s hard not to be a bit grumpy about how the whole feed-in tariff program has been handled…

Curious about the chances Trump’s budding economic policy might work? It sounds almost too good to be true: “The middle class will see a big tax cut, but the wealthy will not. American businesses will pay much lower taxes, and as a consequence bring back bns of USD from overseas. All this will create sustained growth of 3 to 4 percent a year and prevent the budget deficit from exploding.” Turns out, the New York Times writes, Trump’s biggest enemy might be “simple economic math.” Well, demographics, actually, but still…

And speaking of Trump: Diplomats are “aghast” about the president-elect’s “breezy calls to world leaders. … In the calls, he voiced admiration for one of the world’s most durable despots, the president of Kazakhstan, and said he hoped to visit a country, Pakistan, that President Obama has steered clear of during nearly eight years in office,” the New York Times complains. The readout of his call with Pakistani Prime Minister Muhammad Nawaz Sharif is priceless:

“President Trump said Prime Minister Nawaz Sharif you have a very good reputation. You are a terrific guy. You are doing amazing work which is visible in every way. I am looking forward to see you soon. As I am talking to you Prime Minister, I feel I am talking to a person I have known for long. Your country is amazing with tremendous opportunities. Pakistanis are one of the most intelligent people. I am ready and willing to play any role that you want me to play to address and find solutions to the outstanding problems. It will be an honor and I will personally do it. Feel free to call me any time even before 20th January that is before I assume my office. On being invited to visit Pakistan by the Prime Minister, Mr. Trump said that he would love to come to a fantastic country, fantastic place of fantastic people. Please convey to the Pakistani people that they are amazing and all Pakistanis I have known are exceptional people, said Mr. Donald Trump.” We’re not making that up. The full readout from Pakistan’s Ministry of Information is here.

We don’t feel sorry for the diplomats. Try keeping corporate leaders on-script. It’s your turn, ladies and gentlemen.

Ignoring our color commentary on the US presidential election, it’s not often we take a position on political matters, let alone politics outside of Egypt. But the war in Yemen? It is a humanitarian catastrophe, and it could get worse: The nation is now on the verge of famine: “The family of Osama Hassan faced a wrenching choice as his tiny body wasted away. Should they use the little money they had, in a time of war, to take the 2-year-old to a hospital? Or should they buy food to feed their other children? His family chose food. … The U.N. Children’s Fund estimates that 370,000 Yemeni children are severely malnourished and facing death, and 2 million are in urgent need of help.” Read more in the Washington Post’s haunting, “In Yemen’s war, trapped families ask: Which child should we save?”

You’re eating thousands of pieces of plastic every year. Yes, we know, we’re coming across as horrible whiners (or perhaps prophets of doom and gloom) this morning, but: It is sadly rare that CNN succeeds in making us think. But a CNN report (video and accompanying text) from Midway Island — who some among you will recall from the epic Second World War battle that took place there — has us wondering how difficult it would really be to remember not to lose a non-recyclable coffee mug, just for starters. “Standing on the island’s remote shoreline brings a calm and humility — until you look down at your feet. On the beach lies a motorcycle helmet, a mannequin’s head, an umbrella handle, and a flip-flop. They didn’t fall from a plane or off a ship, and there aren’t any civilians living here who could have left them behind. They were washed in with the tide, most likely from China or the US, thousands of miles away — part of an enormous plastic garbage patch, spinning in the middle of the Pacific Ocean, which you probably contribute to. And these are just the bits of it we can see.” Wait ‘til you get to the part that tells you how much plastic you’re eating every year if you eat shellfish. Read: Plastic island: How our trash is destroying paradise.

You’ve heard this a thousand times: BBC’s The Inquiry podcast asks “Why does anyone still smoke?” Smoking still is the single most dangerous voluntary activity in the world, killing more than six mn people annually and on track to increase that to eight mn by 2030 if current trends continue. Under severe restrictions in the developed world, Tobacco companies are now targeting growth in developing countries. “The money they gained from selling the product allows them to continue to market the product they know kills the user,” one former industry professional says. Why do people still smoke, then? Nicotine is very addictive, some people are more genetically predisposed to addiction, tobacco firms are “willing to lie” in their efforts to sell cigarettes, but then, there’s the “cool” factor and how it is a “social passport.” Smokers tend to identify as people who “like being smokers,” so while nicotine gets smokers hooked, the decision to smoke in the first place is linked to how people see themselves in the first place (runtime 26:08).

You’re not over the hill yet, gramps: If you’re in your 50s and looking to make a career shift. You don’t have to bin a high-profile career to become a teacher, as the Financial Times’ Lucy Kellaway is doing, and (if you’re in the West), you have options other than Walmart. The Wall Street Journal deconstructs five myths about late-in-life career shifts. Our favourite statistic (and probably those of most relevance to those of you reading this with us here in Egypt): One of every four businesses started last year was started by someone between the age of 55 and 64 — that’s double the rate a decade ago. Go read: “Five Myths About Landing a Good Job Later in Life” in the WSJ.

Speaking of older people: Meet the man who is steadily draining away your actively managed AUM. If you’re an active fund manager, you may not be losing AUM to Vanguard, but the math is clear: You’re losing them to a Vanguard imitator as hundreds of bns of USD flow from active funds into index funds amid what some have called the die-off of the business of stock picking. For that you have 87-year-old Vanguard founder John Bogle to thank. The December / January edition of Bloomberg Markets has a thought-provoking interview with Bogle headlined “Q&A With Jack Bogle: ‘We’re in the Middle of a Revolution’.”Luddites that we are, we’re casting our lot with the active fund managers just as we’re casting it with humans over AI, but still…

Africa’s borders are a mess — and you can thank the Europeans: ‘We have been giving away mountains and rivers and lakes to each other … only hindered by the small impediments that we never knew where the mountains and rivers and lakes were,” British prime minister, Lord Salisbury, once said in 1890 talking about carving borders in European colonies. Pre-colonial borders were fuzzy, The Economist writes, but in 1964 independent African states, anxious to avoid conflict, agreed to stick with the colonial borders, but “made little effort to mark out frontiers on the ground.”

Now, demarcating borders between African nations comes with a host of challenges, including politics, as “many borderlands are coveted for pasture or minerals: disputed lakes harbour oil, gas and fish. Climate change and population growth are putting pressure on resources, making conflicts harder to resolve.” Practical issues also pose their own set of challenges as demarcations often begin with archived old European documents that include treaties referring to “rivers which have changed course, or tracks that have disappeared” with on-the-ground, GPS-wielding surveyors often having to “traipse through rugged borderlands, erecting pillars, reassuring locals and in some places dodging landmines. That said, and although “full-blown territorial wars” have been rare in Africa, The Economist believes “fixing frontiers would cement peace and help local economies.”

Women of the Hour is back. The podcast by Lena Dunham, of HBO’s Girls fame, is back for its second season. The first episode of the\\\\\ season talks about the feeling of being “trapped,” both physically and metaphorically. Dunham brings on a few guests to the show telling their stories of captivity, feeling trapped, and breaking free. The stories include one by journalist Laura Ling, who was detained in North Korea in 2009 and eventually freed following intervention by former President Bill Clinton, as well as others of living with cerebral palsy, and a woman who found love while incarcerated (runtime 59:48).

We’re not much for self-help claptrap, and anyone who’s read us for more than a month has probably figured out we hold HuffPo in little more than contempt, but this piece is worth reading. “Six years ago I was blessed with a laid-back, carefree, stop-and-smell-the roses type of child. When I needed to be out the door, she was taking her sweet time picking out a purse and a glittery crown. When I needed to be somewhere five minutes ago, she insisted on buckling her stuffed animal into a car seat. When I needed to grab a quick lunch at Subway, she’d stop to speak to the elderly woman who looked like her grandma. When I had 30 minutes to get in a run, she wanted me to stop the stroller and pet every dog we passed. When I had a full agenda that started at 6:00 a.m., she asked to crack the eggs and stir them ever so gently.” Read: The Day I Stopped Saying, “Hurry Up.”

When Tinder has weighed on your soul, the Catholic Church invites you to purge expiate your sins by visiting Sindr. The Catholic Church is getting in on the app-sphere by releasing what the media has dubbed “Sindr.” Officially named “The Catholic App”, the program lets users search for the nearest Holy Mass, confessional or diocesanal statistics, and reportedly uses technology by software firm Musemantik to guide the faithful from their current location to the nearest Catholic Church, Time Magazine reports. The move is part of the Church’s strategy to reach younger Catholics through that medium without which we millennials cannot do — as the app is targeting the 18-55 age group.

When business leaders, investment bankers and corporate lawyers are seen poolside during the day over the course of the workweek, it’s a clear sign that the economy is in trouble. Big trouble. In the months leading up to 3 November, everybody was twiddling their thumbs as market activity ground to a halt and players waited (im)patiently for the FX overcast to blow over. The mood was gloomy and bleak, with no clear end in sight.

That was then. Today, we can rejoice, for the drought is over. Transactions are being resumed with vigor right, left and center. Welcome to the exciting new world of a fully floated currency regime. Although nobody expected a full float, everybody anticipated that something had to give — that devaluation (in some shape or form) was imminent. When the free float and deep devaluation finally arrived, the public outrage expected by the naysayers never materialized. Despite the paranoia of the media and some within government circles, 11/11 came and went with no backlash to speak of. Nothing happened. Zilch. Nada.

But it would be a step too far to say that there has been no reaction whatsoever. After all, the impact of the float of the pound — not to mention some of the other austerity measures that have been recently introduced — has had a whirlwind effect on every household and every business in the land.

People of all walks of life check buy / sell rates for the USD daily and lament or rejoice based on whether the rate is going up or down. We have become a nation obsessed with monetary policy, and every man, woman and child has become an economic pundit overnight, speaking with authority on what to expect in the short, medium and long terms. Those fortunate enough to have some modicum of savings have to contemplate whether to stick or twist, buy or sell — or just put their money in real estate as they have done for thousands of years — to hedge against a new period of uncertainty and volatility.

The emotional roller coaster has left most of us feeling conflicted. On the one hand, we need to adapt to a new painful economic reality in which cutbacks on spending are necessary to survive. Survival is relative, of course, and some will need to make more difficult decisions than others. Nevertheless, nobody is ever really happy with having to live a more modest lifestyle, especially when the underlying cause of your downfall is utterly beyond their control.

On the other hand, this is not Egypt’s first “crisis.” Deep down, we know that we need to dig ourselves out of this hole. Sugar shortages, medical shortages, baby formula shortages and any other shortages are a clear sign of a dysfunctional and unsustainable economy and, despite what those hardened Nasserists will tell you, we really do not want to go back to those “good” old days, thank you very much.

Comparisons with Venezuela and other economically failed states are simply not something with which we want to be associated.
We are now in the midst of getting to grips with the aftermath of the currency float, and that is no easy task. Students who attend private schools and private universities are protesting, as we have seen even at the elite AUC for the past few weeks. The government is sympathetic, and the educational institutions know that compromises will need to be made.

The same tense conversations are taking place across all sectors and households. Landlords and tenants are scrambling to renegotiate contracts based on more realistic terms. The government is repricing contracts. Employees are pushing for salary adjustments and management are figuring out how to adapt their businesses to these new and challenging times. Some businesses, such as those in pharma, are threatening to close down all together if changes to their highly regulated pricing structure is not adjusted — and soon.

Nobody is immune and the only way to get on with our daily lives and the business at hand is to come to the negotiating table and to figure how the market will operate in the new reality.

Despite these daunting and very real problems, you don’t need to be an economic expert to figure out that with new challenges come new opportunities — or that those who are the quickest to react and adapt will seize those opportunities.

And look, perhaps we can take comfort that we are not alone: Russia, Argentina, Azerbaijan, Kazakhstan and Nigeria have all recently gone through deep structural reforms and significant monetary policy adjustments to get their economies back on track (with varying degrees of success). Rightly or wrongly, the Egyptian experience is already being touted as a success story on how to go through a devaluation. As Mohamed El Erian has been telling us over and over again, we now live in a crazy world in which statistically improbable things happen more and more frequently. We are part of this global economic family of nations whether we like it or not, and we are not immune to its ills. But if we play our cards right, we can seize some opportunities for a change instead of others benefitting from our misfortune.

Over the past few weeks, the Egyptian stock exchange has been performing brilliantly, despite the Trump Slump and mass exodus from EM assets. Analysts from the global investment banks are heralding Egypt as a fixed income global upside story. The government is making all the right noises to lure back foreign direct investment and boost confidence in the Egypt story. If we continue with the economic reform program and introduce competitive investment incentives, reduce the public deficit, push for exports and import substitution businesses and all the rest of the things we know we have to do, then we can pat ourselves on the back for a job well done and hope for the best.

The alternative of muddling through — of half measures and taking one-step forward, two steps back — will simply not do, because it will inevitably lead to the same results we have endured over the past few years.

So, as things stand today, despite our bitching and moaning, Egyptians seem to be willing to tough it out and hope for a better tomorrow. Is it too early to say that there might, just might, be a newfound level of resilience? Or are we just too tired to throw a tantrum? Nobody really knows, but at least for now, most people are not dwelling too much on the mistakes of the past (of which there are many) and how we got here, but instead are focusing on adapting to this new reality.

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

• What Will Lift World Economy? Goldman Says Higher Oil Prices (Bloomberg)
• The cabinet economic team on new taxes, the IPO program, trade barriers and more (Enterprise)
• Citi Sells 1st Egypt-Tied Notes Since 2010 After IMF Loan (Bloomberg)
• Controversial Al Jazeera documentary on the military (Al ‘Asaker / The Soldiers, video) (tie)
• Amr Adib rails against Al Jazeera, Qatar (Youtube) (tie)
• Super-smart intern joins UK hedge fund’s Middle East sales department; males of the Finance Species lose their minds (Enterprise)
• Yasser Borhami’s zabeeba vs. Commander Cobra’s hood emblem (Enterprise)