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Macro Thoughts

Wikipedia has an article on: halcyon days and it reads thus,

From Latin Alcyone, daughter of Aeolus and wife of Ceyx. When her
husband died in a shipwreck, Alcyone threw herself into the sea
whereupon the gods transformed them both into halcyon birds
(kingfishers). When Alcyone made her nest on the beach, waves
threatened to destroy it. Aeolus restrained his winds and kept them
calm during seven days in each year, so she could lay her eggs. These
became known as the “halcyon days,” when storms do not occur. Today,
the term is used to denote a past period that is being remembered for
being happy and/or successfuL

Emerging and Frontier Markets Borrowers surely need to get their
skates on and pull the trigger real quick on any borrowing they had
been considering for this year.

Home Thoughts

Behind the brutal murder of Jamal Khashoggi lies a power struggle
within the Saudi royal family that helped feed the paranoia and
recklessness of Crown Prince Mohammed bin Salman. Eventually, this
rage in the royal court led to the death and dismemberment of a
Washington Post journalist. The opening scenes of this family feud
took place in January 2015 in a VIP hospital suite in Riyadh, as King
Abdullah lay on his deathbed. According to a Saudi who was at the
hospital at the time, Abdullah’s sons and courtiers briefly delayed
informing his successor, King Salman, that the monarch had passed —
perhaps hoping to control the court’s stash of money and sustain
powerful positions for Abdullah’s wing of the family. The cutthroat
scheming within the House of Saud over the following years matches
anything in the fantasy series “Game of Thrones.” The fallout extended
to the United States, China, Switzerland and other countries, as the
two most powerful clans of the royal family jockeyed for power. As the
tension increased, the royal court around Mohammed bin Salman, the new
king’s favorite son, even dared to try to kidnap a member of the
Abdullah faction in Beijing in a brazen operation in August 2016 that
reads like a chapter in a spy thriller. MBS, as Salman’s son is known,
became increasingly anxious and aggressive toward those he considered
enemies. Starting in the spring of 2017, a team of Saudi intelligence
operatives, under the control of the royal court, began organizing
kidnappings of dissidents abroad and at home, according to U.S. and
Saudi experts. Detainees were held at covert sites. The Saudis used
harsh enhanced interrogation techniques, a euphemism for torture, to
make the captives talk. They were forced to sign oaths that if they
disclosed any of what happened, they would pay a severe price. This
real-life drama was described to me in a series of interviews by
prominent Saudis and U.S. and European experts, in the United States
and abroad, in the weeks since Khashoggi’s death. These sources had
firsthand knowledge of events but asked not to be identified because
they involve sensitive international matters. The information was
checked with knowledgeable U.S. sources to confirm its accuracy. It
helps explain the vortex of rage and lawlessness that ultimately
sucked in Khashoggi, a Post Global Opinions columnist, when he entered
the Saudi Consulate in Istanbul on Oct. 2. Here’s the bottom line, for
U.S. and Saudi experts who have reviewed the intelligence findings:
Khashoggi was murdered by a team sent from the royal court in Riyadh,
which was part of the rapid-action capability that had been organized
18 months before. Khashoggi’s provocative journalism and his ties to
Qatar and Turkey had offended the increasingly autocratic crown
prince, who issued a “bring him back” order in July 2018, one that
wasn’t understood by U.S. intelligence until three months later, after
Khashoggi’s disappearance in Istanbul. The United States has closely
observed this internecine war. Jared Kushner, President Trump’s
son-in-law and adviser, became a close counselor to MBS. Kushner
visited MBS in late October 2017 on a private trip; neither has
disclosed details about the conversations, but it is possible they
discussed the royal family’s machinations. A week after Kushner’s
visit, that Nov. 4, MBS staged what amounted to an internal coup,
arresting more than 200 Saudi princes and business leaders and holding
them at the Ritz-Carlton hotel in Riyadh. Plans for these arrests were
made carefully by MBS’s closest confidants in the royal court. Topping
MBS’s enemies list in the Ritz-Carlton putsch was Prince Turki bin
Abdullah, an ambitious son of the late king, who had earlier conveyed
to American and Chinese contacts his worries about MBS’s erratic
decisions. Turki remains in captivity, and his top military aide, Maj.
Gen. Ali al-Qahtani, died in custody after being held at the
Ritz-Carlton last year. Saudi Crown Prince Mohammed bin Salman in
Washington in March. (Cliff Owen/AP) Succession struggle The palace
intrigue began swirling in early January 2015, when King Abdullah, who
according to news reports had been diagnosed the previous year with
lung cancer, faced a worsening medical situation. He was rushed by
helicopter from his desert retreat at Rawdat Khuraim to the VIP wing
of the Saudi National Guard hospital in Riyadh, surrounded by his sons
and palace aides. As the king slipped into a coma, the royal court
tried to keep his mortal illness quiet as they speculated about
succession possibilities, including the chance that Abdullah’s son
Mutaib, head of the National Guard, could become king. When Salman,
then crown prince, came to the hospital on Jan. 23 and demanded,
“Where is my brother?” he was informed by Khaled al-Tuwaijri, the
chief of the royal court and guardian of family funds, that Abdullah
was “resting.” In fact, according to a Saudi who was present at the
hospital at the time but requested anonymity, Abdullah was already
dead. When Salman learned the truth, he was furious. Echoing down the
hospital corridor came the sound of loud blows, as the new king
slapped the now-deposed chief of the royal court. Tuwaijri was
arrested and taken to the Ritz-Carlton in November 2017; he’s now
under what’s described as house arrest, after repaying the bulk of the
money he had improperly pocketed during Abdullah’s reign, Saudi
sources said. “Khaled al-Tuwaijri was very damaging to the sons of
King Abdullah,” says Tarek Obaid, a Saudi business executive who
advised the Abdullah clan. Members of the royal family had already
been spying on one another, as the succession struggle loomed. One of
Abdullah’s sons described bugging the phones of many senior princes.
The Abdullah camp also purchased a Chinese-made device that could
secretly detect the identification numbers of phones within a 100-yard
radius without accessing the phones directly. Surveillance devices
hidden in ashtrays and other items were scattered around palaces in
Riyadh to pick up political plots and gossip. An avid courtier who
helped King Salman and his son MBS consolidate power in those early
months was Saud al-Qahtani, a lawyer and former Air Force member with
a penchant for hacking and social media. The Salman camp had initially
been suspicious of Qahtani because he had worked as one of Tuwaijri’s
assistants in the royal court since the early 2000s. Qahtani was
interrogated and beaten in the first days after Salman’s accession,
says one palace insider. But he soon proved his loyalty to MBS, with a
vengeance. As director of the court’s Center for Studies and Media
Affairs, Qahtani fed MBS’s suspicion about potential rivals and coup
plotters. Qahtani also began assembling cyberweapons to use on behalf
of MBS. In June 2015, he contacted a shadowy Italian group known as
“Hacking Team” about acquiring covert cyber tools. On June 29, 2015,
Qahtani messaged the head of Hacking Team: “The Saudi Royal Court (THE
King Office) would like to be in productive cooperation with you and
develop a long and strategic partnership.” Saudi and U.S.
investigators have concluded that Qahtani, as MBS’s commander of
information-related operations, helped organize Khashoggi’s murder.
Saudi Arabia's King Salman attends the inauguration of the Haramain
Railway connecting Mecca and Medina with the Red Sea coastal city of
Jiddah, Saudi Arabia, in September. (Bandar Algaloud/Courtesy of Saudi
Royal Court/Reuters) Family politics King Salman’s team began playing
hard-nosed family politics from its very first week in power. In late
January 2015, a royal decree removed two of Abdullah’s sons, Turki and
Mishaal, as governors of Riyadh and Mecca, respectively. Their ouster
left scars that never healed. MBS, just 29 then, was installed as
minister of defense; Mohammed bin Nayef, the pliable son of the
powerful former interior minister and a favorite of the CIA, was named
deputy crown prince below Crown Prince Muqrin, an unassuming former
head of intelligence. Salman and MBS tightened their control further
in April 2015. Muqrin was dumped as crown prince and replaced by
Mohammed bin Nayef. (A year later, as a farewell gift, the king gave
Muqrin the 280-foot luxury yacht Solandge in addition to other perks,
according to a Saudi who was familiar with the transactions.) MBS
became deputy crown prince, formally joining the line of succession.
Though not yet 30, MBS was already a Machiavellian prince, encouraged
by Mohammed bin Zayed, the deputy crown prince of the United Arab
Emirates, and Sheikh Tahnoon, a senior UAE intelligence official who
visited MBS’s yacht frequently on weekends during that first year. MBS
already had a reputation in Riyadh as a hothead, who in his younger
days had intimidated a land registry official who was blocking a
property transfer the young prince wanted by sending him a bullet as a
warning. MBS proclaimed his desire to modernize the kingdom. But he
was also paranoid about rivals, such as Abdullah’s sons, as well as
Mohammed bin Nayef, and, later, about the threat from the
uncontrollable journalist Khashoggi. Two warning signs in September
2015 should have alerted observers that MBS was “a Saudi prince who
could jump-start the kingdom — or drive it off a cliff,” as a headline
on a 2016 piece of mine put it. Ambassador Joseph Westphal, the
American envoy in Riyadh, traveled that month to Jiddah planning to
see Mohammed bin Nayef; but he was rerouted at the airport and sent to
see MBS instead — an unsubtle suggestion of who was really boss. That
same month, a longtime Saudi intelligence official named Saad al-Jabri
visited then-CIA Director John Brennan in Washington, during a private
visit. Jabri, a close adviser to Mohammed bin Nayef, hadn’t told
Salman about the trip; when Jabri returned home, he was fired. He now
lives in exile. Members of the Abdullah clan were watching as MBS
grasped the levers of power that had once been theirs. Knowing that
Brennan and other members of the Obama administration were uneasy
about MBS, several of Abdullah’s sons hired a leading strategic
advisory firm in Washington, to gather information about the new
dynamic in U.S.-Saudi relations. The meetings were hardly a secret
plot, as MBS may have imagined. Over several days in May 2016, Prince
Turki bin Abdullah and his closest adviser, Saudi businessman Obaid,
met with a series of former CIA and State Department officials in a
suite at the Four Seasons Hotel in Georgetown. They were accompanied
by Maj. Gen. Ali al-Qahtani, the military adviser and protector of
Turki and other sons of the late King Abdullah — and the man who would
end up dead the next year after being held at the Riyadh Ritz-Carlton.
I met the group at the hotel, too, to gather information for the
profile I was writing about MBS. I remember that Turki was careful in
his comments; he expressed concern about the need for more balance in
Saudi policy, but he didn’t propose any changes in governance. Obaid,
in an interview, described Turki’s May 2016 Washington contacts this
way: “The round of meetings was to get a strategic assessment on U.S.
perspectives on the kingdom and its standing, through knowledgeable
U.S. defense and national-security officials.” MBS came to Washington
the next month, in June 2016, to meet with President Barack Obama and
other officials. Up until then, the administration had been studiously
neutral amid the mounting tension in the royal family, even with the
crown prince and deputy seemingly on collision course. But Obama was
impressed by the vision and energy that MBS brought to his reform
agenda, and after that June visit, the United States tilted toward the
young hothead-reformer. Saudi Crown Prince Mohammed bin Salman, left,
meets with Abu Dhabi's crown prince and deputy supreme commander of
the UAE armed forces, Sheikh Mohammed bin Zayed. (Bandar
Al-Jaloud/AFP/Getty Images) Prince Mohammed bin Salman meets with
Barack Obama in Washington. (Bandar Algaloud/AFP/Getty Images) ‘Stuck
in a power play’ The Abdullah clan retained some important foreign
connections, especially in Asia. In 2016, those became increasingly
tangled with MBS’s agenda. Obaid traveled to Shanghai in July 2016, to
prepare for Turki bin Abdullah’s participation in a meeting of the
International Finance Forum, which would be held there that September,
a few days before the Group of 20 meeting that would take place in
Hangzhou. Since MBS would be attending the G-20, Turki’s plan to
attend the IFF meeting carried a hint of intra-Saudi rivalry. Obaid
checked in to a suite at the Peninsula hotel on the Bund; in the
adjoining room was Maj. Gen. Ali al-Qahtani. Then things began to get
weird. This chain of events was described by several Saudi, Swiss and
American sources. Obaid was Turki’s emissary on an important business
venture. Turki had agreed to invest at least $10 million in a
development fund called the Silk Road Finance Corp., or SRFC, headed
by an MIT-educated chief executive named Shan Li, according to the
organization’s website. The Chinese eminence behind the Silk Road
initiative was Chen Yuan, a very senior leader who had headed the
China Development Bank from 1998 to 2013 and whose father was
reportedly one of the founders of the Chinese Communist Party. When
Obaid traveled to Beijing in early August 2016 to negotiate the terms
of Turki’s investment, he had a perhaps significant encounter at the
sumptuous Park Hyatt hotel. He had been invited by John Thornton, the
chairman of Silk Road Finance, to meet for dinner with him and Li.
Thornton also invited Michael Klein, a New York investment banker who
at the time was rumored to be a key adviser to MBS on his plan to
raise as much as $100 billion through an initial public offering of
some shares of Saudi Aramco — providing a welcome cash boost for a
country facing a budget squeeze because of low oil prices. (Klein
didn’t end up representing the kingdom on this deal; the job went to
other bankers.) Klein met with Obaid only briefly and then left,
according to his spokeswoman and Thornton. During the Park Hyatt
meeting with the Silk Road group, Obaid warned that the Saudi Aramco
IPO, by imposing Western disclosure standards, could have a drastic
effect on Saudi national security by weakening the royal family’s grip
on power, since Aramco had long been one of the main pillars for
ruling the kingdom. Instead, said Obaid, the Chinese should raise cash
by working with the Saudis on a barter deal to trade some of China’s
vast stockpile of U.S. Treasury bonds in exchange for Saudi oil. By
criticizing MBS’s privatization plan in front of the Chinese
investment group, Obaid was, in effect, urging the Chinese to support
the traditional Saudi system that under Abdullah and previous kings
had maintained stability and security. Klein said through a
spokeswoman that during his brief conversation with Obaid, he never
discussed either an oil barter deal or the privatization of Saudi
Aramco. Thornton remembers Obaid making the oil barter proposal but
doesn’t recall who was present: “I didn’t give it a second thought as
a serious idea,” he said in a phone interview. According to a Silk
Road executive who requested anonymity, Turki and Obaid never became
actual investors in the venture. Word of the criticism of MBS’s
privatization plan by the Abdullah clan’s chief financial adviser may
have gotten back to Riyadh. A week or so later, Obaid began receiving
a barrage of calls from Saudi numbers he didn’t recognize and didn’t
answer. Eventually, according to a knowledgeable source, he received a
call from Khalid Humaidan, head of the General Intelligence
Presidency, as the Saudi intelligence service is known. Humaidan said
the royal court wanted Obaid to return to Saudi Arabia immediately,
the knowledgeable source said. Obaid responded that he needed to check
first with his boss, Prince Turki. Who is Saudi Arabia’s Mohammed bin
Salman? The assassination of Washington Post contributor Jamal
Khashoggi has put Saudi Crown Prince Mohammed bin Salman in the
spotlight. Here’s what we know about him. (The Washington Post)
According to the knowledgeable source, Turki called Humaidan and asked
whether King Salman had personally ordered Obaid’s return. “If it’s
the king who has requested this, I will personally fly Tarek back home
now,” Turki is said to have told the intelligence chief. The request
was instead described as from the “court,” and Turki is said to have
advised Obaid to remain in China. On Aug. 21, Li invited Obaid to come
to Beijing to look at an office for the Silk Road Finance Corp. that
would be located in Yintai Center in the heart of downtown, a source
said. It was a fashionable spot, with the new Park Hyatt hotel in the
building. Li said that Obaid could meet Chen, the godfather of the
Silk Road venture, on the trip. On the afternoon of Aug 25, Obaid flew
from Shanghai to Beijing on a private jet. When the plane landed, it
taxied to a remote area of the airport. Parked nearby was a plane with
the tail marking “HZ-ATR.” The “HZ” prefix designated it as a Saudi
plane. What happened next was described by knowledgeable Saudi and
Swiss sources who were briefed on the case. As Obaid left his plane,
he was stopped by more than 40 plainclothes Chinese security men. The
leader of the group, speaking in Arabic, is said to have told Obaid:
“We are the Ministry of State Security. Are you going to cooperate?”
Obaid surrendered; his head and body were covered in a bag so tight
that he couldn’t see or move unassisted; he was taken to an
interrogation facility somewhere in Beijing and handcuffed to a chair.
A Chinese intelligence officer asserted that Obaid was a terrorist
financier who was organizing a plot by Pakistani militants to disrupt
the G-20 summit scheduled for the next month, a source briefed on the
case said. “Where are you hiding the terrorists? Where are you hiding
the Pakistani militiamen?” demanded the interrogator. Obaid protested
that he had no idea what they were talking about; they had the wrong
man. He was subjected to a lengthy and painful interrogation ordeal.
Fortunately, Ministry of State Security technicians were examining
Obaid’s iPad and cellphone and checking the information against their
own sources. Quickly, the Chinese concluded that an error had indeed
been made: Saudi officials had given them false information about
Obaid to arrest him as a terrorist and extradite him back to the
kingdom. According to a knowledgeable source, a senior Ministry of
State Security officer told Obaid: “Look, there’s been a mistake.
Someone in your country called us five minutes before you landed in
Beijing and said you were a terrorist financing a hit on the G-20
summit.” The Chinese official explained: “You are stuck in a power
play in your country between two powerful princes.” Chinese
intelligence officers, angry that they had been deceived, arranged for
Obaid to quickly travel back to Shanghai and protected him for the
rest of his stay in China. Meanwhile, the Saudis, who had hoped to
snatch Obaid in Beijing, were furious that he had slipped their grasp.
They sent agents to search hotels in Beijing, looking for the Abdullah
clan’s operative. In Shanghai, Obaid received a call from Gen. Yousuf
bin Ali al-Idrissi, deputy head of Saudi intelligence, telling him to
fly back to Beijing and get on the Saudi plane that had been sent to
pick him up, according to a source briefed on the case. Obaid turned
again for advice to his patron, Prince Turki, who called Idrissi.
According to a knowledgeable source, Turki said: “If the king wants
it, it will be done. On whose behalf are you speaking?” Idrissi gave
an ambiguous answer about who had ordered Obaid’s forced departure
from China. Obaid stayed in Shanghai under close guard of the Ministry
of State Security for another week. Because Obaid had a Swiss
passport, he also received protection from the Swiss Consulate in
Shanghai. A Jan. 11, 2017, letter to Obaid’s lawyer from Swiss Consul
General Françoise Killias Zillweger confirms: “Referring to the
assumption of responsibility for Mr. Tarek Obaid, I inform you that
this Consulate Generale has provided benefits under the consular
protection.” Turki arrived in China on Aug. 30 and spoke at the IFF
meeting on Sept. 1; he was also photographed with President Xi
Jinping. MBS arrived for the G-20 summit that took place in Hangzhou
Sept. 4 and 5. By then, Obaid was on Turki’s private Airbus flying to
Switzerland. The Chinese checked to make sure that Obaid had arrived
safely in Geneva. Once there, Obaid was immediately treated at a
specialized clinic for injuries he had suffered in China, according to
a Swiss source. Then-Saudi Deputy Crown Prince Mohammed bin Salman
attends the Group of 20 opening ceremony at the Hangzhou International
Expo Center on Sept. 4, 2016, in Hangzhou, China. (Pool/Getty Images)
An embarrassing failure MBS spoke at the G-20 gathering about his
Vision 2030 modernization plan. But privately, he was said to be upset
when he learned about Idrissi’s embarrassing failure in the rendition
effort. When he returned home, MBS conducted an “investigation” of the
incident. Idrissi was fired as deputy chief of intelligence; he was
replaced later by Gen. Ahmed al-Assiri — a man the Saudis would later
dismiss on suspicion that he helped plot Khashoggi’s killing in
Istanbul. The Saudis sent a special delegation to China to apologize
for the misuse of intelligence channels in the Obaid case. A Saudi
official close to MBS explained the kingdom’s chagrin, in a private
statement to a fellow Saudi: “They were embarrassed by al-Idrissi’s
mistake. I mean, Saudi Arabia was even embarrassed by this behavior. .
. . He [Idrissi] made a mistake. He shouldn’t have done this.” Says
Obaid of the false accusation that he was a terrorist: “There was
clear abuse of power by incompetent thugs, but I don’t believe that
the crown prince’s instructions were for these events to play out as
they did.” But MBS’s royal court evidently didn’t learn the lesson.
The suspicion of perceived enemies and desire for absolute control
only deepened. Starting in the spring of 2017, the Saudis began a
secret program for kidnapping dissidents and holding them at secret
sites, according to knowledgeable U.S. and Saudi experts. The program
involved a special “tiger team” operating in tandem with the Center
for Studies and Media Affairs at the royal court, headed by Qahtani.
Turki al-Sheikh, another close MBS adviser, helped oversee the
interrogation sites, according to the U.S. and Saudi experts. MBS’s
internal putsch gathered momentum last year, as the crown prince began
to fear that his life was threatened. In June 2017, Mohammed bin Nayef
was humiliatingly deposed as crown prince and replaced by MBS. In
November, a week after Kushner’s visit, MBS rounded up his royal
enemies, starting with Turki bin Abdullah, and warehoused them at the
Ritz-Carlton. The detainees included some of the most senior princes
and wealthiest commoners in the kingdom. After the Ritz-Carlton
resumed its hotel business, new detainees were taken to secret sites.
Several Saudi women’s rights activists were detained in May 2018, just
a month before MBS removed the ban on women driving. MBS critics say
that the crown prince didn’t want the female activists to get credit
for his reform. One of the activists was so traumatized by her harsh
treatment that she tried to commit suicide, according to a human
rights activist, reportedly by slitting her wrists with a razor blade.
Obaid remains in Switzerland. He’s under investigation there and in
the United States on suspicion of improper payments from the Malaysian
sovereign wealth fund, known as 1MDB, to a company called PetroSaudi
International, which was founded by Turki bin Abdullah and Obaid. He
has not been accused of any wrongdoing. A demonstrator holds a poster
with a picture of Saudi journalist Jamal Khashoggi outside the Saudi
Consulate in Istanbul. (Osman Orsal/Reuters) A woman holds a poster
during the funeral prayers in absentia for Khashoggi. (Emrah Gurel/AP)
Brutal paranoia What’s haunting about this tale of family rivalry is
that it helped breed the paranoia that led to Khashoggi’s death. Why
didn’t anyone stop this deadly chain of error? The failed rendition of
Obaid from China is eerily similar to the Khashoggi killing in
Istanbul. In each case, the Saudis wanted to silence a meddlesome
critic. When initial contacts failed, they attempted an illegal covert
operation, each time under the direction of the deputy chief of
intelligence, who had close links with the royal court. The deputy
intelligence chief, each time, proved to be the fall guy; no hard
evidence has emerged in either case documenting MBS’s role. Both
operations appear to have been organized by a special cell within the
royal court, where Qahtani was a key supervisor, not by the Saudi
intelligence services. That’s reassuring to U.S. officials, who see as
potential stabilizing forces Humaidan and his colleague Abdulaziz
al-Howairini, the head of the internal security agency, known as the
Mabahith. Perhaps the biggest difference between the two cases is that
Obaid is alive in a suburb of Geneva, while Khashoggi is dead and
dismembered, the whereabouts of his body unknown. The Saudi public
prosecutor has arrested 18 Saudis in the case, including Maher Mutreb,
a former intelligence officer and sometime bodyguard for MBS, who
Saudi officials have charged was the leader of the team that murdered
Khashoggi. Qahtani and Assiri have both been fired from their jobs,
and Qahtani is among 17 Saudis sanctioned by the U.S. Treasury for
their alleged roles in the Post journalist’s death. The Treasury
statement said that Qahtani “was part of the planning and execution of
the operation”and that Mutreb “coordinated and executed” it. Every
Saudi watcher I spoke with believes that MBS is likely to survive in
power, despite the global outrage over Khashoggi’s killing. The
closest thing to a “smoking gun” in the Khashoggi case is that Qahtani
is said to have exchanged multiple messages with MBS in the two days
surrounding the journalist’s murder. But unless those messages are
disclosed, it might be impossible to prove a connection. The brutal
paranoia of MBS’s royal court in Riyadh recalls Baghdad in the days of
Saddam Hussein. The spotlight cast by Khashoggi’s killing gives Saudi
Arabia, and the United States, a last chance to check a slide toward
Hussein-like despotism from overwhelming the region. The House of Saud
rules with a sometimes bloody hand. The United States, as the
kingdom’s key ally, has an obligation to calm this family feud before
it does any more damage to Saudi Arabia and the world. Read more from
David Ignatius’s archive, follow him on Twitter or subscribe to his
updates on Facebook. Read more: David Ignatius: Why was MBS so afraid
of Jamal Khashoggi? David Ignatius: The Saudi royal family circles its
wagons in the Khashoggi crisis David Ignatius: The Saudi crown prince
just made a very risky power play

timely and judicious doses of Wikileaks leaks ‘’a constant state of
destabilised perception’’

President Donald Trump and China’s Xi Jinping will meet over dinner
Saturday evening in Buenos Aires marking a pivotal moment in the
escalating trade war between the world’s two largest economies.
Trump is hopeful for a breakthrough with Xi but is ready to impose
more tariffs if the upcoming talks don’t yield progress, Larry Kudlow,
Trump’s top economic adviser, told reporters Tuesday during a briefing
ahead of the Group of 20 meeting in Argentina.
The president believes “there is a good possibility that we can make a
deal” and he “is open to it,” Kudlow said later Tuesday.
“As you can imagine this is a big deal, this meeting -- the stakes are
very high,” Kudlow said. “It’s an opportunity to turn a new page,
break through. President Xi can step up and come up with some new
ideas for us.”
The dinner with Xi is scheduled as one of the last events on Trump’s
itinerary there before he returns to Washington, Kudlow said. He
declined to say what other U.S. officials will join Trump in the
session.
Trump said on Monday that he will likely push forward with plans to
increase tariffs on $200 billion of Chinese goods. In September, the
Trump administration announced a 10 percent tariff on $200 billion of
Chinese goods, and said the rate will rise to 25 percent on Jan. 1.
If the two sides fail to reach a deal, Trump said he will also impose
tariffs of either 10 percent or 25 percent on the remaining $267
billion in annual U.S. trade with China.
Trump surprised his aides earlier this month with a call to Xi to
restart the stalled negotiations. Since then, communications have
picked up between the two sides, said Kudlow.
“I don’t want to go overboard, but he’s indicated some optimism. We
have an opportunity to extend that optimism, break some new ground,”
Kudlow said. “So we’ll see.”

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It was an in an article on Dec 30th 2016 that I wrote that my
conviction Trade for 2017 was  1. Long BITCOIN. BITCOIN was trading at
levels around $1,000.00 going into 2017. My Thesis was that BITCOIN
and the entire crypto-currency World which had been very esoteric and
something of a closed World of ''bug-eyed'' Gamers and the Off-Grid
Folks who wanted throw the Yoke of Government off their backs, would
''mainstream'' And it ''mainstreamed'' beyond my wildest dreams
through 2017. By November 2017 BITCOIN was knocking on the door of
$10,0000.00 and on the 27th November 2017, I wrote an article
captioned  Bitcoin "Wow! What a Ride!" and advised booking the profits
on the Trade. A more than 9.7x Price Inflation was getting
uncomfortably close to outpacing the Tulip Mania [see Graph] BITCOIN's
parabolic price rally had spawned thousands of other crypto currencies
which were sold on the same grounds as the greatest South Sea Bubble
prospectus: “For carrying on an undertaking of great advantage, but
nobody to know what it is.”

The Price inflated further reaching a high of $19,763.00 on 18 dec
2017. By the first of January this year we had retreated to
$13,428.00. On the 02-JAN-2018 I reiterated my Point to get out and
said '' I am no longer bullish bitcoin, in fact, I am bearish''  At
this point in time, I met Folks on these Streets who would pull out
their Computer and show me how they were making money every second
[Look at that they would say and indeed There was a number and it was
ticking higher] mining BITCOIN. The recent cryptocurrency market
decline has resulted in a similar drop in mining profitability and
forced Chinese operators to sell their mining devices at a loss. Some
mining machines are being sold on the second-hand market for merely 5
percent of their original value.  Others would tell me, I've bought
Nvidia. Crypto at this point was at Peak Phenomenon.

As I write this BITCOIN is trading at $3,650.00. I think its going
right back to levels below $1,000.00.

We have yet to hit peak melt-down. The reason being so many Folks
espouse the HODL philosophy.

GameKyuubi posted "I AM HODLING," a drunk, semi-coherent, typo-laden
rant about his poor trading skills and determination to simply hold
his bitcoin from that point on. "I type d that tyitle twice because I
knew it was wrong the first time. Still wrong. w/e," he wrote in
reference to the now-famous misspelling of "holding." "WHY AM I
HOLDING? I'LL TELL YOU WHY," he continued. "It's because I'm a bad
trader and I KNOW I'M A BAD TRADER.  Yeah you good traders can spot
the highs and the lows pit pat piffy wing wong wang just like that and
make a millino bucks sure no problem bro."

He concluded that the best course was to hold, since "You only sell in
a bear market if you are a good day trader or an illusioned noob.  The
people inbetween hold. In a zero-sum game such as this, traders can
only take your money if you sell." He then confessed he'd had some
whiskey and briefly mused about the spelling of whisk(e)y.  [HODL
Definition | Investopedia]

Selling at todays levels frankly is still a great Trade.

“But it is a curve each of them feels, unmistakably.It is the
parabola. They must have guessed, once or twice -guessed and refused
to believe- that everything, always, collectively, had been moving
toward that purified shape latent in the sky, that shape of no
surprise, no second chance, no return.’’

BREAKING DOWN 'HODL'
The term HODL (or hodl) originated in 2013 with a post to the
bitcointalk forum. The price of bitcoin had surged from under $15 in
January 2013 to a high of over $1,100 at the beginning of December
2013. In the 24 hours to 10:00 a.m. UTC, Dec. 18 – possibly in
response to reports of a Chinese crackdown – the price of bitcoin fell
39%, from $716 to $438, according to CoinDesk's bitcoin price index.

I AM HODLING
At 10:03 a.m. UTC on Dec. 18, GameKyuubi posted "I AM HODLING," a
drunk, semi-coherent, typo-laden rant about his poor trading skills
and determination to simply hold his bitcoin from that point on. "I
type d that tyitle twice because I knew it was wrong the first time.
Still wrong. w/e," he wrote in reference to the now-famous misspelling
of "holding." "WHY AM I HOLDING? I'LL TELL YOU WHY," he continued.
"It's because I'm a bad trader and I KNOW I'M A BAD TRADER.  Yeah you
good traders can spot the highs and the lows pit pat piffy wing wong
wang just like that and make a millino bucks sure no problem bro."

He concluded that the best course was to hold, since "You only sell in
a bear market if you are a good day trader or an illusioned noob.  The
people inbetween hold. In a zero-sum game such as this, traders can
only take your money if you sell." He then confessed he'd had some
whiskey and briefly mused about the spelling of whisk(e)y.

Frontier Markets

There’s a general feeling of optimism about Africa these days. And the
good news, which runs deeper than rapidly improving health and
quality-of-life indicators, deserves a closer look.
Perhaps most significant, a relatively high proportion of sub-Saharan
Africa is at peace today. It is more stable and less prone to
conflict, relative to previous decades. Violence in the Congo region
and Rwanda, for instance, killed millions in the 1990s. There is
nothing comparable going on today. This general move toward greater
peace has been detailed in a recent report from the Institute for
Security Studies.
This peace will also pay a demographic dividend, as the aging of
Africa’s population, and the marrying off of many of its young males,
will decrease the potential for conflict. Older, more settled
populations are less likely to go to war.
The costs of war are far more numerous than death. War can cause
malnutrition, long-term damage to infrastructure, polarization and
ruined politics, and the traumatization of entire populations. So the
likely ongoing diminution of war in sub-Saharan Africa should bring
many collateral benefits, boosting an overall positive dynamic. Not
only have Ethiopia and Eritrea stopped fighting, for example, but they
have also resumed open trade and travel, to the benefit of both
countries.
As long as peace holds, African nations should be able to continue to
import new technologies from the rest of the world, and of course
develop some of their own. That will lead to a virtuous circle of
greater education, higher productivity, and more contentment with
living standards, reinforcing the basic dynamic toward peace.
A second dynamic is harder to measure or prove, but is also likely
positive: greater national unity. It is a longstanding concern that
the colonial powers drew African national borders that did not
sufficiently correspond to the underlying ethnic and linguistic
groups. That in turn boosted the probability of conflict and
instability by making many nation-states prone to bickering over the
nature of the regime. Furthermore, the colonial powers made this
problem worse by instituting “divide and conquer” strategies in their
territories. The Belgian rulers drew people’s attention to the
underlying ethnic divisions — such as Tutsis and Hutus — in what is
now Rwanda, for example, and the British did something comparable in
Nigeria.
One source of gain is simply that the colonial era is receding ever
further into the past. In the meantime, a wide array of media outlets
have helped to further African notions of national unity and cultural
coherence. Soccer and other athletic teams compete on the world stage,
and African players competing in Europe are portrayed as
representatives of their nations, not particular ethnic groups.
Commercial brands and celebrities help define national identities.
Exposure to international media, most of all through smart phones and
the internet, cements the notion that these regions are indeed
perceived as nations by the outside world and that such designations
are likely to stick. Mobile phones have knit together different
African regions, and ethnic groups, in closer economic ties.
The notion of a nation as an “imagined community,” to use a term from
political scientist Benedict Anderson, is under accelerating
construction in many parts of Africa. Cultures and cultural
expectations are adapting to current borders, even given earlier
injustices, thereby contributing to falling rates of violence and
conflict.
Unfortunately, Africa is exposed to a lot of “fake news,” perhaps more
than Americans are. The good news, if you would call it that, is that
Africans seem to be relatively skeptical of social media as a news
source, and they put a relatively high degree of trust in
international media.
Better yet is that most Africans say that the internet has improved
their politics and economics. For instance, 64 percent of Nigerians
reported in 2017 that the increasing reach of the internet was good
for Nigerian politics. That number compares to just 43 percent in
2014, and positive impressions of a similar nature are common
throughout Africa. For all the talk about social media creating
divisions (such as in Myanmar), the net effect of modern technology
seems to be greater unity, including with respect to national borders.
Many serious problems remain with respect to national identity — in
places such as the Central African Republic, South Sudan and Cameroon
— so a celebration would be premature. But, to pose a simple question,
if you were asked to trade the Africa of the 1970s or ’90s for the
Africa of today, the right answer would be pretty obvious. There has
been so much net progress on the ground. The simple truth is that
today’s Africa is still underrated.

Tanzania president John Magufuli praises China's "no strings attached"
aid, criticises other unnamed development partners for offering
Tanzania aid that is tied to degrading conditions -- "Others may give
you aid, but ask you to walk while bending over,"

Tanzanian President John Magufuli criticized Western donors for tying
conditions to aid, contrasting them with the Chinese who he said don’t
meddle in African nations’ affairs when they lend money.
Magufuli’s remarks follow recent spats with some donor countries,
who’ve threatened to cut much-needed funding to the East African
nation over what they describe as deteriorating human-rights
conditions.
“China are true friends who offer help without any conditions,”
Magufuli said while opening a 90 billion shilling ($39 million)
University of Dar es Salaam library built using a Chinese grant. “Free
things are really expensive especially when they are provided by some
countries. The only free things that won’t cost you anything are those
provided by China.”
Denmark is withholding 65 million krone ($9.8 million) in aid after
Dar es Salaam’s regional commissioner made “unacceptable homophobic
comments,” and the European Union is also reviewing its financial
support. The World Bank suspended disbursement of a $300 million
education loan and will only release the funds once the state meets
certain conditions. The lender blocked the financing after Tanzania
said it wouldn’t readmit schoolgirls that became pregnant.
Human-rights groups warn governance in the $52 billion economy is
taking a turn for the worse, with authorities detaining opposition
leaders and free press advocates, and suspending medical services and
HIV/AIDS treatment for members of the LGBTI community.

South African business confidence fell to the lowest level since the
country lost its investment-grade credit rating, as political and
policy uncertainty continue to weigh on sentiment.
The gauge dropped to 31 in the fourth quarter from a revised 34 in the
previous three months, FirstRand Ltd.’s Rand Merchant Bank division
and the University of Stellenbosch’s Bureau for Economic Research said
in an emailed statement Tuesday.
Confidence is now at the lowest level since the second quarter of
2017, when former President Jacob Zuma’s move to fire Pravin Gordhan
as finance minister saw the country’s debt cut to junk by S&P Global
Ratings and Fitch Ratings Ltd. While Cyril Ramaphosa’s ascent to the
presidency boosted business confidence earlier this year, sentiment
has since cooled and the rand reversed all the gains that came on the
back of the change in leadership.
The ruling African National Congress’s decision to change the
constitution to make it easier to expropriate land without
compensation added to policy uncertainty, even as Ramaphosa’s moves to
change some key ministers and the management of state companies such
as Eskom Holdings SOC Ltd. were seen as positive steps. The mid-term
budget last month painted a bleak picture of the nation’s finances,
with government debt peaking at higher levels, and two years later,
than previously forecast.
The index level shows that seven of every 10 respondents are unhappy
with prevailing business conditions, RMB said.
“The reality is a multitude of political and policy issues, chief
among them being the uncertainty around the government’s land-reform
plans, continue to weigh down on confidence,” Ettienne le Roux, chief
economist at RMB, said in the statement. “Unless these are resolved in
a more speedily and concrete fashion, private-sector fixed investment,
and by implication, economic growth will remain disappointingly low.”

Dollar versus Rand 6 Month Chart INO 13.9206
http://quotes.ino.com/charting/index.html?s=FOREX_USDZAR&v=d6&t=c&a=50&w=1

Egypt Pound versus The Dollar 3 Month Chart INO 17.9280
http://quotes.ino.com/charting/index.html?s=FOREX_USDEGP&v=d3&t=c&a=50&w=1

Nigeria All Share Bloomberg -18.49% 2018
http://www.bloomberg.com/quote/NGSEINDX:IND

Ghana Stock Exchange Composite Index Bloomberg +0.23% 2018
http://www.bloomberg.com/quote/GGSECI:IND

More than two million Zimbabweans may need support to buy food between
January and March 2019, according to a report released Tuesday by the
government and the World Food Programme.
Fall armyworm, a pest that eats mainly corn, erratic rainfall and a
decline in cash remittances sent to rural families by relatives
contributed to food insecurity,” according to the the report, produced
annually and known as the Zimbabwe Vulnerability Assessment Committee.
The worst affected areas are Matabeleland North, Masvingo and
Matabeleland South, it said.
“The country requires $140 million to buy cereals and $31 million for
other food commodities to provide a full food basket for the
vulnerable households,” the report said.

•forex market balanced, current account deficit down 120bps
•private sector credit grew, up 50bps
•decline in NPL in trade, personal, household, down 40bps
•strong pickup in the economy, real GDP growth up 130bps

Kenya is among countries at the highest risk of losing strategic
assets to China over the pile of debt it owes Beijing, global ratings
firm Moody’s Investor Service has said in a newly-released report that
has raised eyebrows in public finance circles.
Moody’s says in the report that China’s response to sub-Saharan Africa
countries facing liquidity pressure has not been uniform or
transparent - meaning predictability of credit implications are less
clear.
“Countries rich in natural resources, like Angola, Zambia, and
Republic of the Congo, or with strategically important infrastructure,
like ports or railways such as Kenya, are most vulnerable to the risk
of losing control over important assets in negotiations with Chinese
creditors,” Moody’s warns.
Such countries are also at risk of being offered liquidity relief at
higher resource concessions that only reduce the value of future
export earnings.
“Even if debt restructuring alleviates immediate liquidity pressure,
the loss of natural resources revenue or other assets is credit
negative,” Moody’s adds.
Outside sub-Saharan Africa, China got land in exchange for some debt
relief in Tajikistan and took control of the Hambantota Port in Sri
Lanka.
Recent data from the National Treasury show that Chinese debt stood at
Sh554.88 billion or 73.4 percent of total bilateral debt of Sh756.28
billion at the end of September.
A large segment of the debt is linked to construction of the Standard
Gauge Railway (SGR).
“In general, concentrated exposure to a single creditor, with little
transparency about decisions to restructure the terms of the debt,
increases rollover risks, weakening the fiscal profile,” Moody’s said.
The ratings agency says that for countries with narrow export bases,
such as Kenya or Uganda, an increase in external debt associated with
China's lending may not be met with sufficient and stable
foreign-currency earnings in the future.
Besides, Moody’s says, Chinese loans also come with relaxed conditions
such as no call for structural reforms to enhance governance and
competitiveness thus jeopardising the longer-term growth benefits from
such loans.
This is unlike World Bank and European Union development assistance
that is often linked to compliance with objectives related to
governance, socio-economic development, and democratic principles.
Chinese lending to African countries increased to more than $10
billion (Sh1 trillion) annually between 2012 and 2017, from less than
$1 billion ((Sh100 billion) in 2002.
Angola (30 per cent), Ethiopia (10 per cent) and Kenya (seven percent)
received almost half of all Chinese investment on the continent
between 2000 and 2017, according to Moody’s.

The Kenya Electricity Transmission Company (KETRACO) has sought
approval from the environmental watchdog to electrify the standard
gauge railway (SGR) line between Mombasa and Nairobi.
Nema through the latest Kenya Gazette notice says KETRACO had filed
the Environmental Impact Assessment and is seeking to construct 12
transmission lines and 14 substations along the SGR line.
The design of the SGR rail line — which is currently run by
diesel-powered locomotives — allows for the addition of a single
electric line.
An electric track was mooted for fast movement of bigger containers
and passengers in the quest to boost East Africa’s competitiveness as
an investment destination.
“Kenya Electricity Transmission Company IS proposing to construct
twelve (12) transmission lines and fourteen (14) substations for
supply of high voltage power to the Nairobi-Mombasa Standard Gauge
Railway Line (SGR) and the economic belt along the railway line,” said
NEMA in a public call for views on the project, which is expected to
take 28 months.
“The proposed project will traverse five (5) counties: Kilifi, Kwale,
Taita Taveta, Makueni, and Machakos counties.”
The electricity will also spur growth of factories, businesses and
urban centres along the railway line, Ketraco added.
Ketraco in January signed a $240 million (Sh24.4 billion) loan deal
with China Electric Power Equipment and Technology Company Limited
(CET) for the electrification.
China Road and Bridge Corporation, which was appointed to build the
Mombasa-Nairobi line, will be offered 15 per cent over the current
construction costs of Sh327 billion or Sh49.05 billion more to upgrade
the line.
Kenya Railways earlier said electrifying the line would enhance the
speed of the railway, but could not take Kenya to speeds of up to
250km per hour seen in developed nations such as China, Germany and
UK.
The move to electrify the rail comes at a time when Kenya Railways is
need of more revenues to support the mega project that was built on
debt.
Cargo charges on the standard gauge railway (SGR) from Mombasa to
Nairobi will rise by up to 79 per cent from January 1 in bid to raise
more revenue to pay the Chinese operator.

Par Value:                  2.50/-
Closing Price:           7.00
Total Shares Issued:          6243873667.00
Market Capitalization: $426.409m
EPS:             1.2
PE:                 5.833

Energy Sales +6.00% to 7,989 Gwh What was interesting here is that
with regional Interconnections and with a possible switch from a
diesel powered SGR to an electric one The energy curve might will
steepen and accelerate.

What interested me was the growth outlook that Rebecca spoke to.
Obviously the electrification of the SGR [Why it was diesel at the
get-go remains a mystery to me and a question that I cannot answer]
would be a big boost to demand. Furthermore, there is also a big
regional expansion opportunity on the horizon as well.
“We’re looking into regional expansion, with the power transmission
lines including 1,100km (Kenya-Ethiopia) 127km (Kenya-Uganda) 94km
(Kenya-Tanzania) and 400kv planned transmission.” The demand curve
which has been running at an average five per cent CAGR since 2011
could steepen dramatically.

“What we will be doing differently (under PE business) is that we will
be raising third-party funds to invest alongside our own money,” he
said.
“We are not looking to invest in loss-making, turn-around situations,
but entities that are already profitable and have some market
leadership in one form or another.”
The plan is to cut long-term debt, which stood at Sh11.38 billion at
the end of September 2018, by paying them off on maturity without
rolling over or renewing the facilities.
Mr Mworia said the firm was looking at using proceeds from a “robust
exit pipeline of mature assets” to pay off the debts which fall due,
freeing up an average of Sh1.7 billion in annual debt service bill to
enhance shareholder dividend payments.
Centum has recently divested from firms such as regional
micro-financier Platinum Credit and asset manager GenAfrica.

Par Value:                  0.50/-
Closing Price:           26.50
Total Shares Issued:          665441775.00
Market Capitalization:        17,634,207,038
EPS:             3.96
PE:                 6.692

6 months through 30th September 2018 versus through 30th September 2017
Sales 4.818287b versus 4.772045b
Direct and Operating Costs [4.428471b] versus [4.233126b]
Trading Profit 389.816m versus 548.919m
Operating Loss from Financial Services [91.833m] versus [111.481m]
Investment and Other Income 4.093440b versus 2.203492b
Operating and Admin Costs [683.689m] versus [524.585m]
Finance Costs [1.230388b] versus [557.253m]
HY PBT 2.392198b versus 1.765589b
HY PAT 2.079909b versus 1.631461b
HY EPS 3.40 versus 2.07
HY Comprehensive Income 1.524082b versus 1.928075b

Nairobi All Share Bloomberg -15.47% 2018
http://www.BLOOMBERG.COM/quote/NSEASI:IND

Nairobi ^NSE20 Bloomberg -25.19% 2018
http://j.mp/ajuMHJ

Every Listed Share can be interrogated here
http://www.rich.co.ke/rcdata/nsestocks.php