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Tuesday 26th of November 2019
 
Afternoon,
Africa

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Macro Thoughts

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Halcyon Days @TheStarKenya
Africa


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

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Night Boat to Tangier by Kevin Barry
Africa


Charlie Redmond and Maurice Hearne are Cork drug dealers, former
big-time suppliers and users. Now into their 50s, their black money is
squandered; they have done and could still do terrible things. “The
years are rolling out like tide now. There is old weather on their
faces, on the hard lines of their jaws, on their chaotic mouths. But
they retain – just about – a rakish air.”
It’s October 2018, and Charlie and Maurice find themselves keeping
vigil at the Algeciras ferry terminal in southern Spain, where the
night boats to Tangier depart and dock. This place has the clear
contours of purgatory, perhaps one that Charlie and Maurice deserve.
It is a Hades crossing point, a portal to dread.
Yet what these two horrors of men – and they are, by their own
confession, flawed fellows – are carrying is a cache of missing person
posters; desperately, pathetically, they are trying to find Dilly,
Charlie’s 23-year-old daughter.
Dilly fled Ireland after the death of her mother to join new age
travellers, moving on queasy and confounding ley lines between Spain
and north Africa in ways Charlie and Maurice struggle to fathom.
They have not seen Dilly for three years, but they have street
intelligence of her whereabouts, often gleaned by intimidation.
They are still tenacious, menacing, solipsistic guys, but their
chances are slim and their wait at the terminal is the temporal anchor
of a book that deftly pivots elsewhere.
As the two men exchange a supple flow of defeated banter and craic, we
see that they are cut straight from the toxic cloth of Beckett; an
iPhone Hamm and Clov, they play out their own endgame, one urging the
other to utterance in all the glory and vinegar of Irish disillusion:
Personally speaking, Maurice? My arse isn’t right since the octopus we
ate in Malaga.
Is it saying hello to you, Charlie?
It is, yeah. And of course the octopus wasn’t the worst of Malaga.
…. They look into the distance. They send up their sighs. Their talk
is a shield against feeling.
To avoid plot spoiling, let me say that what we assume is a two-hander
crime novel swells with plenitude into an emotionally crushing
panorama of two friends gone wildly astray, punished by regret but
with their grim solidarity intact – so far.
This is not a journey devoid of dark humour; there are back-breaking
moments of mirth, as well as real madness and love (this is
complicated, since Maurice’s love was for Charlie’s wife, Cynthia).
The novel puts a great deal of procedural crime fiction into
perspective as puerile and exploitative fluff. For here is a
meticulous, devastatingly vivid portrayal of serious crime and its
real consequences: the waste, the insane risks, the threat of demonic
violence, the punishing paranoia and the vulgar glut of cash reward
packed into dodgy real estate or money laundering ventures.
Most of all, though, the toll is taken on the human soul itself.
Barry, winner of the Impac Dublin literary award for City of Bohane
and the Goldsmiths prize for Beatlebone, is a clairvoyant narrator of
the male psyche and a consistent lyrical visionary. The prose is a
caress, rolling out in swift, spaced paragraphs, a telegraphese of
fleeting consciousness:
“The roads after the rain were black, sliding tongues and gleamed.”
“The cold white moon speaks highly of the coming winter.” Here is the
creepy, nosing landlord of a west Ireland cottage where Charlie and
Cynthia try to hide out from dangerous men:
“There was a papery film, like mothskin stretched over his eyes. He
slithered about making goldfish gasps as if traumatised by an
otherworld invisible but to his eyes.”
Barry’s sensibility is eerie; he is attuned to spirits, to malevolent
presences, the psychic tundra around us. But what distinguishes this
book beyond its humour, terror and beauty of description is its moral
perception.
For this is no liberal forgiveness tract for naughty boys: it is a
plunging spiritual immersion into the parlous souls of wrongful men.
There is scant chance of anything as vulgar as redemption down by the
Tangier ferry for Charlie or Maurice; after all, who is young Dilly
really running away from?
Yet it is impossible to finish the novel without loving and caring for
each protagonist in all their verbose fallibility. We could pray for
Charlie and Maurice – and wow, they need it.

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The Moon Jorge Luis Borges
Africa


There is so much loneliness in that gold.
The moon of every night is not the moon
That the first Adam saw.
The centuries
Of human wakefulness have left it brimming
With ancient tears. Look at it. It is your mirror

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In my own China network I'm seeing ripples of disbelief about Hong Kong results. This reveals a potentially far bigger problem for the CCP - A creeping sense their worldview is incomplete @METhorley
Law & Politics


In my own China network I’m seeing ripples of disbelief about Hong
Kong results. This reveals a potentially far bigger problem for the
CCP - mainland friends are asking why the HK people did this & why
their own views were so wrong. A creeping sense their worldview is
incomplete.

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Turkish F-16 warplanes will fly over the country's capital Ankara on Monday to test its new Russian S-400 missile defenses, Turkish media said @Reuters
Law & Politics


Ankara’s purchase of the S-400s has been a major factor souring
relations with the United States, which says the system is not
compatible with NATO defenses and poses a threat to Lockheed Martin’s
F-35 stealth fighter jets.

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@Reuters Special Report: 'Time to take out our swords' - Inside Iran's plot to attack Saudi Arabia
Law & Politics


The group included the top echelons of the Islamic Revolutionary Guard
Corps, an elite branch of the Iranian military whose portfolio
includes missile development and covert operations.
The main topic that day in May: How to punish the United States for
pulling out of a landmark nuclear treaty and re-imposing economic
sanctions on Iran, moves that have hit the Islamic Republic hard.
With Major General Hossein Salami, leader of the Revolutionary Guards,
looking on, a senior commander took the floor.
“It is time to take out our swords and teach them a lesson,” the
commander said, according to four people familiar with the meeting.
Hard-liners in the meeting talked of attacking high-value targets,
including American military bases.
Yet, what ultimately emerged was a plan that stopped short of direct
confrontation that could trigger a devastating U.S. response. Iran
opted instead to target oil installations of America’s ally, Saudi
Arabia, a proposal discussed by top Iranian military officials in that
May meeting and at least four that followed.
This account, described to Reuters by three officials familiar with
the meetings and a fourth close to Iran’s decision making, is the
first to describe the role of Iran’s leaders in plotting the Sept. 14
attack on Saudi Aramco, Saudi Arabia’s state-controlled oil company.
These people said Iran’s Supreme Leader Ayatollah Ali Khamenei
approved the operation, but with strict conditions: Iranian forces
must avoid hitting any civilians or Americans.
Reuters was unable to confirm their version of events with Iran’s
leadership. A Revolutionary Guards spokesman declined to comment.
Tehran has steadfastly denied involvement.
Alireza Miryousefi, spokesman for the Iranian Mission to the United
Nations in New York, rejected the version of events the four people
described to Reuters.
He said Iran played no part in the strikes, that no meetings of senior
security officials took place to discuss such an operation, and that
Khamenei did not authorize any attack.
“No, no, no, no, no, and no,” Miryousefi said to detailed questions
from Reuters on the alleged gatherings and Khamenei’s purported role.
The Saudi government communications office did not respond to a
request for comment.
The U.S. Central Intelligence Agency and Pentagon declined to comment.
A senior Trump administration official did not directly comment on
Reuters’ findings but said Tehran’s “behavior and its decades-long
history of destructive attacks and support for terrorism are why
Iran’s economy is in shambles.”
Yemen’s Iran-aligned Houthi rebels, at the center of a civil war
against Saudi-backed forces, claimed responsibility for the assault on
Saudi oil facilities.
That declaration was rebuffed by U.S. and Saudi officials, who said
the sophistication of the offensive pointed to Iran.
Saudi Arabia was a strategic target.
The kingdom is Iran’s principal regional rival and a petroleum giant
whose production is crucial to the world economy. It is an important
U.S. security partner.
But its war on Yemen, which has killed thousands of civilians, and the
brutal murder of Washington-based journalist Jamal Khashoggi by Saudi
agents last year, have strained its relations with U.S. lawmakers.
There was no groundswell of support in Congress for military
intervention to aid the Saudis after the attack.
The 17-minute strike on two Aramco installations by 18 drones and
three low-flying missiles revealed the vulnerability of the Saudi oil
company, despite billions spent by the kingdom on security.
Fires erupted at the company’s Khurais oil installation and at the
Abqaiq oil processing facility, the world’s largest.
The attack temporarily halved Saudi Arabia’s oil production and
knocked out 5% of the world’s oil supply. Global crude prices spiked.
The assault prompted U.S. Secretary of State Mike Pompeo to accuse
Iran of an “act of war.” In the aftermath, Tehran was hit with
additional U.S. sanctions.
The United States also launched cyber attacks against Iran, U.S.
officials told Reuters.
The plan by Iranian military leaders to strike Saudi oil installations
developed over several months, according to the official close to
Iran’s decision making.
“Details were discussed thoroughly in at least five meetings and the
final go ahead was given” by early September, the official said.
All of those meetings took place at a secure location inside the
southern Tehran compound, three of the officials told Reuters.
They said Khamenei, the supreme leader, attended one of the gatherings
at his residence, which is also inside that complex.
Other attendees at some of those meetings included Khamenei’s top
military advisor, Yahya Rahim-Safavi, and a deputy of Qasem Soleimani,
who heads the Revolutionary Guards’ foreign military and clandestine
operations, the three officials said. Rahim-Safavi could not be
reached for comment.
Among the possible targets initially discussed were a seaport in Saudi
Arabia, an airport and U.S. military bases, the official close to
Iran’s decision making said. The person would not provide additional
details.
Those ideas were ultimately dismissed over concerns about mass
casualties that could provoke fierce retaliation by the United States
and embolden Israel, potentially pushing the region into war, the four
people said.
The official close to Iran’s decision making said the group settled on
the plan to attack Saudi Arabia’s oil installations because it could
grab big headlines, inflict economic pain on an adversary and still
deliver a strong message to Washington.
“Agreement on Aramco was almost reached unanimously,” the official
said. “The idea was to display Iran’s deep access and military
capabilities.”
The attack was the worst on Middle East oil facilities since Saddam
Hussein, the late Iraqi strongman, torched Kuwait’s oil fields during
the 1991 Gulf crisis.
U.S. Senator Martha McSally, an Air Force combat veteran and
Republican lawmaker who was briefed by U.S. and Saudi officials, and
who visited Aramco’s Abqaiq facility days after the attack, said the
perpetrators knew precisely where to strike to create as much damage
as possible.
“It showed somebody who had a sophisticated understanding of facility
operations like theirs, instead of just hitting things off of
satellite photos,” she told Reuters. The drones and missiles, she
added, “came from Iranian soil, from an Iranian base.”
A Middle East source, who was briefed by a country investigating the
attack, said the launch site was the Ahvaz air base in southwest Iran.
That account matched those of three U.S. officials and two other
people who spoke to Reuters: a Western intelligence official and a
Western source based in the Middle East.
Rather than fly directly from Iran to Saudi Arabia over the Gulf, the
missiles and drones took different, circuitous paths to the oil
installations, part of Iran’s effort to mask its involvement, the
people said.
Some of the craft flew over Iraq and Kuwait before landing in Saudi
Arabia, according to the Western intelligence source, who said that
trajectory provided Iran with plausible deniability.
“That wouldn’t have been the case if missiles and drones had been seen
or heard flying into Saudi Arabia over the Gulf from a south flight
path” from Iran, the person said.
Revolutionary Guards commanders briefed the supreme leader on the
successful operation hours after the attack, according to the official
close to the country’s decision making.
Images of fires raging at the Saudi facilities were broadcast
worldwide. The country’s stock market swooned. Global oil prices
initially surged 20%.
Officials at Saudi Aramco gathered in what was referred to internally
as the “emergency management room” at the company’s headquarters.
One of the officials who spoke with Reuters said Tehran was delighted
with the outcome of the operation: Iran had landed a painful blow on
Saudi Arabia and thumbed its nose at the United States.
The Revolutionary Guards and other branches of the Iranian military
all ultimately report to Khamenei. The supreme leader has been defiant
in response to Trump’s abandonment last year of the Joint
Comprehensive Plan of Action, commonly called the Iran nuclear deal.
That 2015 accord with five permanent members of the U.S. Security
Council – the United States, Russia, France, China and the United
Kingdom – as well as Germany, removed billions of dollars’ worth of
sanctions on Iran in exchange for Tehran’s curbing its nuclear
program.
Trump’s demand for a better deal has seen Iran launch a two-pronged
strategy to win relief from sweeping sanctions reimposed by the United
States, penalties that have crippled its oil exports and all but shut
it out of the international banking system.
Iranian President Hassan Rouhani has signaled a willingness to meet
with American officials on condition that all sanctions be lifted.
Simultaneously, Iran is flaunting its military and technical prowess.
In recent months, Iran has shot down a U.S. surveillance drone and
seized a British oil tanker in the Strait of Hormuz, the narrow
channel through which about a fifth of the world’s oil moves.
And it has announced it has amassed stockpiles of enriched uranium in
violation of the U.N agreement, part of its vow to restart its nuclear
program.
The Aramco attacks were an escalation that came as Trump had been
pursuing his long-stated goal of extricating American forces from the
Middle East.
Just days after announcing an abrupt pullout of U.S. troops in
northern Syria, the Trump administration on Oct. 11 said it would send
fighter jets, missile-defense weaponry and 2,800 more troops to Saudi
Arabia to bolster the kingdom’s defenses.
“Do not strike another sovereign state, do not threaten American
interests, American forces, or we will respond,” U.S. Defense
Secretary Mark Esper warned Tehran during a press briefing.
Still, Iran appears to have calculated that the Trump administration
would not risk an all-out assault that could destabilize the region in
the service of protecting Saudi oil, said Ali Vaez, director of the
Iran Project at the International Crisis Group, a nonprofit working to
end global conflict.
In Iran, “hard-liners have come to believe that Trump is a Twitter
tiger,” Vaez said. “As such there is little diplomatic or military
cost associated with pushing back.”
The senior Trump administration official disputed the suggestion that
Iran’s operation has strengthened its hand in working out a deal for
sanctions relief from the United States.
“Iran knows exactly what it needs to do to see sanctions lifted,” the
official said.
The administration has said Iran must end support for terrorist groups
in the Middle East and submit to tougher terms that would permanently
snuff its nuclear ambitions. Iran has said it has no ties to terrorist
groups.
Whether Tehran accedes to U.S. demands remains to be seen.
In one of the final meetings held ahead of the Saudi oil attack,
another Revolutionary Guards commander was already looking ahead,
according to the official close to Iran’s decision making who was
briefed on that gathering.
“Rest assured Allah almighty will be with us,” the commander told
senior security officials. “Start planning for the next one.”

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25-NOV-2019 :: If Iran Wants to Eat, it Has to Obey the US
Law & Politics


Iran's 'only crime is we decided not to fold' said Javad Zarif the
Foreign Minister of Iran as reported by the Asia Times' Pepe Escobar.
Zarif evoked Secretary Mike Pompeo [who is apparently trying to
parachute himself out of the State Department and back to Kansas -
Ukraine refers] : “Today the Secretary of State of the United States
says publicly: ‘If Iran wants to eat, it has to obey the United
States.’
Since 1979 and except for a brief interregnum during the Presidency of
Barack Hussein Obama, the US has been determined on a collision course
with the ''Velayat-e Faqih'' [Velayat-e faqih also known as Islamic
Government (Persian: حکومت اسلامی‎, Hokumat-i Eslami), is a book by
the Iranian Muslim cleric, faqīh, and revolutionary Ayatollah Ruhollah
Khomeini, first published in 1970, and probably the most influential
document written in modern times in support of theocratic rule] Regime
in Tehran. The End of the brief interregnum to which I referred was
pronounced and of course theatrically when President Trump pulled the
U.S. out of the 2015 nuclear deal, a pact which had traded limits on
Iran’s nuclear fuel program for a relaxation of international
sanctions. President Trump has been a big Proponent of coercive,
financial, currency and sanction warfare and his Policy of ''maximum
pressure'' on Iran is that Policy's apogee.
The Shia crescent is burning from Syria through Lebanon, from Iraq to
Yemen but Tehran has always been the Prize.
Bloomberg asked last week ''Iran Unrest Raises a Question: Is 'Maximum
Pressure' Working?'' @Bpolitics. Anti-government protests in Iran left
buses and banks burned, hundreds under arrest, the Internet blocked
and an unconfirmed number of people dead. The unrest was sparked by
Tehran’s decision last week to both ration. and raise the price of
gasoline. But there was ready tinder to be lit, consisting of the
sorts of frustrations that have stoked violence around the globe in
recent months, from Bolivia, Chile and Venezuela, to Hong Kong, Iraq
and Lebanon.
Crude oil exports on which Iran relies for much of its hard currency
earnings have fallen to about 250,000 barrels per day, from a peak of
2.5 million barrels per day in April last year. The International
Monetary Fund has forecast a 9.5% contraction for Iran this year and
Inflation is clocking 36%.
Clearly, we are witnessing a Global Phenomenon from Latin America to
the Middle East to Hong Kong and the wave of protests shaking the
World resembles ''a global uprising against neoliberalism''
[MiddleEastEye] and it does behove us to diagnose the disease
otherwise we will be prescribing the wrong medicine.  For example,
take Bolivia and Latin America in general where the Prescription of
the likes of Jeanine Áñez and Jair Bolsanaro [’You shall know the
truth and the truth shall set you free’’] is to take neoliberalism to
the ultimate extreme ["They're Killing Us Like Dogs" - Common Dreams]
China and even India are seeking to ''Xinjiang'' the Periphery. This
is a Global Phenomena and Iran is similarly reaping a whirlwind.
However, what is also clear is that Team Pompeo is seeking to
accelerate the Iranian situation towards a denouement. Of course, the
origins of the protests are spontaneous. However, Pompeo has some very
curious bedfellows.
Marc Owen-Jones tweeted
[Thread] 1/ Mike Pompeo tweeted on the 21st November a request in
Farsi for Iranian protesters to send in videos of the regime's
crackdown in order to 'expose' and 'sanction' the abusesBoth tweets,
including the translation got a lot of retweets, but by whom?I
download retweets of each tweet. For the translated tweet, I analysed
around 3,600 individual accounts that retweeted itInterestingly, the
most cohesive community, and most commonly biographical detail was
once again "MAGA". Indeed, 825 of the accounts retweeting itAs we've
come to expect, many of these MAGA accounts were created on January
2017 and January 2018.This is the same type of profile we've seen
accounts on accounts tweeting for a Hard Brexit (among other things -
especially related to Iran).
Pompeo has allied himself with the People's Mojahedin Organization of
Iran (PMOI/MEK) and its Cult-Like Leader @Maryam_Rajavi who tweeted
''The whole issue is that the Velayat-e Faqih regime is on its last leg''
This alliance of Pompeo, the ''MAGA'' Tweet Army, Maryam Rajavi and
the MEK is just not credible its incredible. Of course, ''ARAB'' NATO
which includes the Kingdom of Saudi Arabia, the GCC and Israel is a
lot more credible and they are surely guiding the Inferno however if a
civil war is ignited in the Shia crescent and the nature of the hybrid
warfare indicates this is the direction of travel, the implosion will
engender catastrophic consequences which will be impossible to manage
and which surely will imperil ''ARAB NATO'' itself.
Oil is the Purest Proxy and is at an 8 week high.

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RAND's publication "Swarming & The future of Conflict" states:
Law & Politics


In Athena’s Camp, we speculated that swarming is already emerging as
an appropriate doctrine for networked forces to wage information-age
conflict. This nascent doctrine derives from the fact that robust
connectivity allows for the creation of a multitude of small units of
maneuver, networked in such a fashion that, although they might be
widely distributed, they can still come together, at will and
repeatedly, to deal resounding blows to their adversaries. This study
builds on these earlier findings by inquiring at length into why and
how swarming might be emerging as a preferred mode of conflict for
small, dispersed, internetted units. In our view, swarming will likely
be the future of conflict.”
“Social conflict also features pack-like organizations, as exemplified
by modern-day “soccer hooligans.” They generally operate in a loosely
dispersed fashion, then swarm against targets of opportunity who are
“cut out” from a larger group of people. The use of modern information
technologies—from the Internet to cell phones—has facilitated plans
and operations by such gangs (see Sullivan, 1997)”.
Swarming depends on robust information flow and is a necessary
condition for successful swarming. In other words, by controlling
communication and sending texts to ‘protestors’, random groups are
mobilized together in one or various spots.   Chaos ensues which
naturally draws reaction. One is never aware of the origin of the
messages. In one of her talks, Suzanne Maloney of  Brookings seemed to
know the exact number of cell phones in use in Iran.

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Iran, Israel raise tensions to obscure domestic woes @asiatimesonline
Law & Politics


Israel and Iran have something in common. Both face instability at home
In both Iran and Israel, the next step is most likely to be a ramping
up of tensions between them to divert attention from their domestic
problems.
They may not lead to regime change, as the American right would like,
but together with similar protests in Iraq and Lebanon against Iranian
interference in their domestic affairs, the protests in Iran represent
a long-term existential threat to the Iranian regime.
On November 19, Israel attacked IRGC-linked targets in Syria, leading
to the deaths of 23 people, most of them Iranians. This was in
response to rocket attacks  (all thwarted by Israel’s missile defense
system) into northern Israel from Syria by militias allied to the IRGC
or the IRGC itself.
The Israeli retaliation was unprecedented, almost disproportionate in
severity because of the wide variety of targets attacked, which
included arms depots, military bases, and air defense batteries. One
target, for example, was an Iranian base near Damascus Airport, a
known meeting place for senior Iranian officials.
In October, Netanyahu declared that the Iranian threat to Israeli
security now emanated not only from Iran itself but also from Iraq and
even from as far away as Yemen, suggesting that Israel is ready to
widen its theater of military action against Iran.
This could set in motion a dangerous cycle of intensifying tit-for-tat
actions by Iran and Israel, as ruling regimes in both countries seek
to distract their respective publics from their domestic failures.
The region is in for a dangerously unpredictable winter.

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Iraqi security forces deny coup attempt as protest death toll continues to rise @MiddleEastEye
Law & Politics



Iraq's most elite military unit has been forced to deny that it was in
the process of launching a coup in the country, after a post on its
social media account announced the beginning of a "military
insurrection".
A spokesperson for the Counter-Terrorism Services (CTS) said the
accounts had been "hacked by weak-spirited people" and that the claims
"had no credibility at all".
Despite this, the tweets, originally sent out on Monday morning, were
still available by the afternoon.
"The head of the Counter-Terrorism Agency, Lieutenant General Talib
Shaghati, announced the start of a military insurrection and the start
of the military coup against the illegitimate government in response
to the demands of the Iraqi people," read one of the CTS tweets, which
contained the statement in English.
The controversy comes as security forces continue to mete out violence
against demonstrators, who have repeatedly called for the government
to resign.


جهاز مكافحة الإرهاب @iraqicts
https://twitter.com/iraqicts/status/1198716882548875264?s=20

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China Cables: 'The largest incarceration of a minority since the Holocaust' @IrishTime
Law & Politics


Contained in a telegram called “New Secret 5656”, the instructions
were written in 2017, when the policy of incarcerating people from
ethnic minorities in Xinjiang was being put into effect on an
industrial scale.
What has since been put in place has been described by Zenz as “the
most systematic campaign of mass surveillance and mass oppression the
world has ever seen”, including what is probably “largest
incarceration of an ethno-religious minority since the Holocaust.”
“This sounds exaggerated, but there is really no other way to put it.
The strategy is to eliminate dissent, enforce loyalty to the Chinese
Communist Party, via indoctrination camps and other coercive methods,
and to stamp out the independent practice of Islam and Uighur
culture.”
The main purpose behind the camps – the breaking apart of families,
putting children into orphanages where they are to be raised as
Han-speaking atheists – is not to combat terrorism, but to “protect
the power of the party”.
O’Brien is not convinced that what is happening in the camps could not
become transformed into something even more horrific.
“What happens if a bomb goes off, or some people are killed [in a
terrorist attack], and the government starts to think that what is
being done in Xinjiang is not working? The Chinese government doesn’t
tend to think that what it has been doing is wrong. That’s what
worries me. What if they think, we haven’t been hard enough?”

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"Is it possible to do an FTA in 11 months?" @DmitryOpines
Law & Politics


"Absolutely. On a completely unrelated note, here's a Mona Lisa
someone smashed out in an afternoon."

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Yankee dollar is king in anti-imperialist Venezuela @FT
Law & Politics


In the upmarket Sambil mall, the loudspeaker is blaring “Rudolph, the
Red-Nosed Reindeer” in Spanish as Venezuelans do their early Christmas
shopping.
Zara, Ben Sherman, Mango, Adidas, Victoria’s Secret, Timberland,
Reebok and Guess are just some of the brands that have outlets here.
In all of them, people are spending US dollars.
“Today I’m buying a blouse for my sister and a shirt and a pair of
jeans for me,” said Felipe Tuesta as he queued to pay. “All in
dollars. I’ve just had some sent to me from relatives who live
abroad.”
Despite two decades of anti-US rhetoric from Venezuela’s ruling
socialist party and concerted efforts to move the economy’s axis away
from the US and towards China and Russia, the dollar is increasingly
part of the fabric of Venezuelan life.
President Nicolás Maduro conceded as much last weekend when he sang
the praises of dollarisation in a local television interview.
“This process which they call dollarisation can be useful for the
recovery and for unleashing the country's productive forces and for
the functioning of the economy,” he said. “It is an escape valve.
Thank God it exists.”
The socialist leader is usually scathing about anything that comes
from the US and has taken several steps to “liberate” his country’s
economy from the Yankee dollar, by embracing the euro, the renminbi
and a homespun cryptocurrency, the petro.
But his comments reflect a growing reality in Venezuela as the
country’s economic decline gathers pace. Walk into many shops in
Caracas these days and you can spend greenbacks.
“I’d say around 70 per cent of all our sales are now in dollars,” said
Jennifer Bogarin, owner of a shop selling children’s clothes in a mall
in Caracas. “It’s really taken off since the middle of this year. A
few people use euros but hardly anyone buys in bolívares cash any
more.”
A recent study by local consultancy Ecoanalítica found that over half
of all financial transactions in Venezuela are paid for in foreign
currency — primarily dollars.
In the country’s second city Maracaibo, close to the Colombian border,
the figure is 86 per cent.
Venezuelans use dollars for big ticket purchases — 95 per cent of home
appliances for example — but also increasingly for smaller day-to-day
items: over half of food purchases were made in dollars, the study
found.
Partly, this is a consequence of hyperinflation. No one wants to carry
a huge sack of bolívares around to pay for a coffee or a snack. Much
easier to use dollars.
Even after the government lopped five zeros off the currency and
issued a whole load of new banknotes last year, the bolívar is of
little worth. The largest note in circulation is the 50,000-bolívar
note — worth about $1.6.
The smallest is worth a fraction of a US cent. Go to a cash machine
and the maximum amount you can withdraw is equivalent to 10 US cents.
Even when Venezuelans do pay in bolívares, they often do it with a
debit card. The economy is increasingly cash-free.
Steve Hanke, an inflation expert at the John Hopkins University in the
US, says Venezuela’s annual inflation rate is around 10,000 per cent
and the country is enduring the third longest period of hyperinflation
on record — surpassed only by Nicaragua in the late 1980s and Greece
during World War Two.
The IMF predicts inflation of 200,000 per cent this year and 500,000 next year.
Dollarisation is also a consequence of the government’s recent
economic liberalisation measures. Until this year you could only
legally buy dollars at state auctions.
Now, in theory, you can get them at exchange houses, although supply is limited.
The government has tightened the legal reserve requirements for banks,
making it more difficult for them to lend.
That has prompted Venezuelans to look elsewhere for credit, sometimes
in foreign currencies.
Remittances are also a factor. Over 4m Venezuelans have fled the
economic meltdown of recent years and many send money home, usually in
dollars. Over half of all people in Maracaibo say they receive money
from abroad.
Finally, economists say the prolonged blackouts that hit Venezuela
earlier this year fuelled dollarisation. When the lights go out, it is
impossible to use debit cards for transactions.
People are forced to fall back on cash, and dollars are more practical
than bolívars.
But while Mr Maduro describes this informal dollarisation as “an
escape valve”, economists insist it is not a panacea for the economy,
which has halved in size since the president came to power in 2013.
“Just because the dollar is circulating it doesn’t mean the economy
improves, or that people’s purchasing power increases,” says Asdrúbal
Oliveros, director of Econanalítica.
Francisco Rodríguez, a Venezuelan economist based in the US, says he
favours a formal adoption of the greenback, arguing that “Maduro's
dollarisation is highly unequal and harms those who still earn in
bolívars”.
Peter West, economist at EM Funding in London, says “a major drawback
for the government of this de facto semi-dollarisation is that it is
reducing the scope to generate real revenues through money creation”.
This is making the financing of the budget deficit even more difficult, he says.
It also leaves a question hanging for the future. If Venezuela ever
returns to anything like economic orthodoxy, will it resurrect the
bolívar or formally embrace the dollar as its official currency, as
Ecuador and Panamá have done?
“When the time comes to implement a proper stabilisation programme, a
difficult decision will have to be made,” Mr West says.

read more







The Frontier from Xinjiang to Kashmir, from Gaza to Crimea from Hong Kong to Taiwan are c21st flash points.
Law & Politics


if you are in Kashmir which was described by Nehru as “the snowy bosom
of the Himalayas” and which is currently switched off from the
c21st.Prime Minister Narendra Modi revoked Article 370, which
protected Kashmir’s demography by restricting residency to Kashmiris
alone and, under a sub-section known as Article 35A, forbade the sale
of property to non-Kashmiris. Essentially, Modi is seeking to flood
the zone.

read more


"YOU DON'T BRING BAD NEWS TO THE CULT LEADER": INSIDE THE FALL OF @WeWork @VanityFair
Law & Politics


on the afternoon of September 18, 2019, WeWork cofounder Adam Neumann
was in his office at WeWork’s Chelsea headquarters when he got a text
alert on his iPhone. The Wall Street Journal had just published an
explosive article chronicling what it said was his reckless management
of the coworking start-up, the era’s preeminent unicorn. Neumann is
dyslexic, and reading is a challenge, so advisers quickly briefed him
on the story’s most troubling details: vivid accounts of his heavy
drinking, marijuana use, and habit of making grandiose pronouncements
like wanting to be elected president of the world, live forever, and
become humanity’s first trillionaire. The article could not have
arrived at a more perilous moment. Two days earlier, the We Company,
WeWork’s parent, announced that it was delaying its IPO after
investors universally rejected the offering, even when WeWork slashed
the valuation by 75 percent, to between $10 and $12 billion. In the
run-up, a string of high-profile executives had walked out the door,
including the chief communications officer, the cohead of the firm’s
real estate fund, and the global head of real estate partnerships.
Just weeks earlier, WeWork had been privately valued at $47
billion—which was $10 billion more than the market capitalization of
Ford and double the GDP of Iceland. Now, unless WeWork secured a new
source of emergency funding, it would run out of cash before
Thanksgiving. For an embattled CEO running a company on life support,
being the subject of a takedown by the business paper of record would
mean instant career death. But Neumann, characteristically, assured
colleagues that the article was not much more than a speed bump. He
controlled 65 percent of the stock and had the power to fire the board
of directors if the board moved against him. (So confident was Neumann
of his job security that he once declared during a company meeting
that his descendants would be running WeWork in 300 years.) WeWork
executives had long grown accustomed to Neumann’s belief that the laws
of economics—even reality itself—didn’t apply to him. It was in the
nature of unicorns that they bent reality, and that certainly had been
true of WeWork. Fueled by $12 billion of venture capital and debt,
Neumann grew WeWork in less than a decade from a single coworking
outpost in SoHo into a 12,500-employee company with 500,000 users in
111 cities across 29 countries. But in 2018, WeWork had lost $2
billion and had a highly questionable business model—the company
signed long-term leases and sublet space to freelancers and
corporations on a short-term basis. Its valuation somehow kept rising.

The company’s valuation put Neumann’s net worth at $4.1 billion—and
his spending more than kept pace. “It was Succession craziness,” a
colleague said. Neumann was chauffeured around in a $100,000-plus
Maybach sedan and traveled the world on a $60 million Gulfstream G650.
As reported in the Wall Street Journal, he and his wife, Rebekah
Paltrow Neumann—Gwyneth’s first cousin—spent $90 million on a
collection of six homes that included a 6000-square-foot Gramercy
condo, a 60-acre estate in Westchester County, a pair of Hamptons
houses and a $21 million mansion in the Bay Area that features a room
shaped like a guitar. They employed a squadron of nannies for their
five children, two personal assistants, and a chef. “Adam went through
money like water,” a former executive said. In a way, the spending
made sense, because Neumann himself was the product. He pitched
himself to investors as a gatekeeper to the rising generation. A new
way of working. A new way of living. Work was 24/7, coworkers were
friends, office was home, work was life. For baby boomers who
experienced office life as cubicles and bad coffee, his message was
irresistible. “Every investor who walked through was sold,” a WeWork
executive told me. They saw Neumann as a millennial prophet who did
shots of Don Julio during meetings while preaching about the dawn of a
new corporate culture, one in which the beer and kombucha flowed and
MacBook-toting employees would love coming to work. After sitting with
Neumann in his office, outfitted with a Peloton bike, infrared sauna,
and cold water plunge, Steve Jobs biographer Walter Isaacson told Fast
Company that Neumann reminded him of the Apple cofounder. Neumann
later told colleagues that Isaacson might write his biography.
(Isaacson did not respond to a request for comment.) Through a
combination of egomaniacal glamour and millennial mysticism, the
Neumanns sold WeWork not merely as a real estate play. It wasn’t even
a tech company (though he said it should be valued as such). It was a
movement, complete with its own catechisms (“What is your superpower?”
was one). Adam said WeWork existed to “elevate the world’s
consciousness.” The company would allow people to “make a life and not
just a living.” It was even capable of solving the world’s thorniest
problems. Last summer, some WeWork executives were shocked to discover
Neumann was working on Jared Kushner’s Mideast peace effort. According
to two sources, Neumann assigned WeWork’s director of development,
Roni Bahar, to hire an advertising firm to produce a slick video for
Kushner that would showcase what an economically transformed West Bank
and Gaza would look like. (Bahar told me he only advised on the video
and no WeWork resources were used.) Kushner showed a version of the
video during his speech at the White House’s peace conference in
Bahrain last summer.

To a passel of geezer capitalists, this was too big to miss, even if
they didn’t fully understand it—possibly, not understanding it was the
point. Rupert Murdoch, Sir Martin Sorrell, and Larry Silverstein all
took meetings. Mort Zuckerman, the billionaire cofounder of developer
Boston Properties, told a real estate executive shortly after WeWork
launched that Neumann was creating the future of work. Zuckerman soon
offered to buy WeWork for $500 million. (Neumann declined the deal but
accepted a $2 million investment from Zuckerman.) “Adam was probably
the best salesman of all time,” a former WeWork executive told me.

In April 2012, Neumann secured his first venture capital funding from
Benchmark Capital, the San Francisco-based firm famous for its bets on
eBay, Twitter, and Uber. Benchmark cofounder Bruce Dunlevie joined
WeWork’s board after touring a WeWork with Neumann. “Bruce walked in
and he said, ‘You’re not selling coworking, you’re selling an energy
I’ve never felt,’ ” recalled a former WeWork executive who attended
the meeting.
JPMorgan CEO Jamie Dimon was also an evangelist. In 2018, JPMorgan led
a $700 million bond offering for WeWork. The bank extended Neumann
nearly $100 million in loans and was among a group of banks that
provided Neumann with a $500 million personal credit line. Neumann
told an executive that Dimon was his “personal banker” and might leave
JPMorgan to run Neumann’s family investment office one day. (A source
close to Dimon said that Dimon had no plans to leave JPMorgan.)

Neumann’s most fervent believer, though, was Masayoshi “Masa” Son, the
62-year-old CEO of Japan’s SoftBank Group. In recent years, Masa had
transformed SoftBank from a telecom conglomerate into the world’s most
aggressive start-up investor, doing more than anyone to inflate the
unicorn bubble. Backed by $60 billion from Saudi Arabia and Abu Dhabi,
SoftBank pumped billions into fast-growing but money-losing companies
like Uber, DoorDash, and Slack. Masa would invest $10 billion in
WeWork. “Adam later said, ‘I’m crazy but Masa is crazier,’ ” a former
WeWork executive recalled.

Reality came crashing down last August when WeWork filed its S-1
prospectus to go public. Investors were shocked by WeWork’s spiraling
losses and that the company had spent millions on Neumann vanity
projects such as a wave-pool company and a start-up that sold turmeric
coffee creamer. Most damaging, however, were disclosures that Neumann
made $6 million by selling the “We” trademark back to the company and
held ownership stakes in buildings WeWork leased from, essentially
paying himself. (After criticism, Neumann returned the trademark
money.) He gave his wife a large role in choosing his successor.
Suddenly, the pasha lifestyle that made Neumann an avatar of the new
economy seemed like something else—millennial entitlement gone insane.
(A collapsing unicorn bends reality the other way.) “When he was on
the rise everyone painted the most beautiful picture. On the way down
they only wanted to show the most ugly picture,” Sam Ben-Avraham, a
Neumann friend and early WeWork investor, told me. Neumann began
hearing from WeWork’s bankers that Wall Street viewed him as “toxic,”
a person who spoke with Neumann told me. Looking for advice, he called
Uber CEO Dara Khosrowshahi and texted Travis Kalanick, who had been
forced from Uber in 2017 amid a flurry of allegations of
discrimination and sexual harassment. Neumann retained lawyers from
the white-shoe firm Paul, Weiss and P.R. advisers from Edelman to set
up a war room. On Friday, September 20, Neumann arrived at WeWork’s
headquarters vowing to fight for his job. “I’m never not going to be
CEO,” he told a colleague. One of Neumann’s favorite words is
optionality, but he was rapidly running out of them. In the wake of
the Journal exposé, investor Michael Eisenberg and WeWork CFO Artie
Minson held a conference call with WeWork’s directors and argued that
Neumann had to step down, two people briefed on the call said. On
Sunday afternoon, he met with Dimon at JPMorgan’s headquarters. Dimon
made it clear that WeWork would never be able to secure fresh capital
as long as Neumann remained CEO. And while Dimon didn’t say it, the
subtext was clear: WeWork was barreling toward bankruptcy, and Neumann
would be unable to repay the $380 million he borrowed against the
value of his now potentially worthless stock. Two days later, Neumann
resigned. Neumann’s fall is one of the most spectacular flameouts in
recent corporate history, an Icarus story for its time. Though in
Neumann’s case, he floated down under a golden parachute. When
SoftBank bailed out WeWork on October 22 for $9.5 billion, Neumann
walked away with a package that included $1 billion in stock, $500
million in credit to pay back loans, and a $185 million consulting
fee. The money, though, didn’t blunt the confusion and anger he was
experiencing, people who spoke with Neumann said. In the weeks after
losing control of his company, he became paranoid that he was being
followed. He heard a rumor from a reporter that one of his investors
hired the Israeli private intelligence firm Black Cube—the same firm
Harvey Weinstein used to track Ronan Farrow—to dig up dirt on him to
force him out as CEO. Mainly, he holed up in his Gramercy condo,
trying to piece together what had gone so disastrously wrong. Not long
after Neumann started WeWork in 2010, the then-31-year-old Israeli
entrepreneur showed up at a real estate industry conference on Park
Avenue wearing his now-familiar uniform, T-shirt and jeans, with
shoulder-length surfer hair that looked like it hadn’t been washed in
days. Neumann, who is six-foot-five and shares model good looks with
his sister, a former Miss Teen Israel, was an instant object of
fascination among the suit-clad executives, many of whom were twice
his age. They were taken with his exotic backstory (he was raised on a
kibbutz in southern Israel, not far from the Gaza Strip). But it was
his hyper-confidence that one attendee most recalled. “I remember Adam
asked me what company leases the most office space in New York. I told
him JPMorgan. They have about 3.5 million square feet. And he said,
‘Well, I’m going to lease more than they do.’ ” It was a delusional
idea at the time. Neumann was a college dropout with no commercial
real estate experience and a business track record of having launched
two failed start-ups: a company that sold women’s shoes with a
collapsible heel and a line of baby clothes called Krawlers that
featured pants with kneepads sewn into the legs. When the financial
crisis hit in 2008, Neumann had burned through an investment from his
grandmother of nearly $100,000 and scrambled to hire a lawyer to renew
his visa to stay in the country. To help pay rent, he let another
company sublet space in Krawlers’s Brooklyn loft. It was the genesis
of the WeWork idea: In the postcrash recession, Neumann had the
foresight to bet landlords would need tenants, and that legions of
underemployed professionals would pay for an appealing alternative to
working from a Starbucks while they got back on their feet. Neumann
partnered with a laconic 34-year-old architect named Miguel McKelvey,
who grew up on an Oregon commune, and together they convinced
Krawlers’s landlord to let them convert an unused floor into a shared
workspace called Green Desk. The concept did well. A little over a
year later, they sold it to the landlord at a reported $3 million
valuation and struck out on their own. Neumann envisioned WeWork as a
“capitalist kibbutz” where members would work, eat, and drink
together. McKelvey designed WeWork branches that fostered community by
keeping hallways narrow and packing in open desks to encourage
spontaneous encounters. After hours, members participated in yoga
classes, wine tastings, and networking panels. The WeWork aesthetic
evoked a cross between a Silicon Valley start-up and a boutique hotel
lobby. Offices had clean lines, Danish furniture—no leather or plastic
utensils allowed—and neon signs on the walls with phrases like “Hustle
Harder.” By 2018, Neumann’s improbable boast had come true: WeWork
surpassed JPMorgan to become New York’s largest private office tenant,
with some 5 million square feet of office leases spread across more
than 50 locations in the city.

But achieving this blistering growth resulted in barely controlled
chaos inside the company. “The place made the Trump White House look
like a well-oiled machine,” a former senior executive said. At
WeWork’s first headquarters in the Financial District, there were
twice as many employees as available desks in the early days. “They
scattered employees throughout WeWorks around the city,” a former
executive recalled. Neumann had personally reviewed the first hundred
leases, but as the company grew, it became a free-for-all. The company
voraciously leased office space with seemingly little strategy, except
to keep adding locations. To entice new customers, WeWork offered
members free rent and bought out their existing leases. “We are in a
consumption phase, like nothing that has ever been seen,” Neumann
declared at an industry conference in 2015. “There was no discipline
to how Adam approved leases,” an executive said. A broker who worked
with the company during this time recalled, “No one knew what anyone
was doing.” The torrid pace took a toll on morale. “We would joke that
we worked like slaves,” a former WeWork employee said. “Adam would
have meetings on Sunday, and you could never miss those. And sometimes
it wouldn’t happen, or it’d happen hours late and you’d be there all
night. You’d cry in the bathroom all the time,” the employee recalled.
At the same time the company was burning money to expand, staffers
were made to feel expendable. WeWork’s previous CFO Ariel Tiger, who
served in the Israeli Navy with Neumann, talked openly about firing
people. “Every two weeks Ariel would get a printout of payroll, and he
would go through and redline the shit out of it, saying he wanted to
reduce peoples’ pay,” a former executive said. “I remember walking
through the office and Ariel would loudly say, ‘Why do we have all
these people? I could do what they’re doing with two people!’ Everyone
knew he was Adam’s guy.” (Tiger did not respond to a request for
comment.) The promise of IPO riches kept many employees from simply
quitting. “The numbers they threw out at all-hands meetings was that
this is going to be a multibillion-dollar company,” a former employee
said. The money was only part of it, though. Neumann inculcated in his
postcollegiate staff a belief they were members of a vanguard changing
the world—or at least a belief they may work in an office but they
didn’t have to grow up. Employees were expected to attend Neumann’s
weekly Thank God It’s Monday parties and a roving annual retreat
called Summer Camp held in different years at an upstate New York
compound and an English country estate. The events were one part TED
Talk (quantum physicist Michael Brooks gave a lecture) and another
part Animal House (employees played beer pong and partied to
performances by Florence and the Machine and Two Door Cinema Club).
Until a few years ago, the Neumanns were devout followers of Kabbalah,
the Jewish mystical faith, and it infused WeWork’s office culture. One
employee said key meetings were often scheduled for the 18th of the
month because 18 is a sacred number in Kabbalah’s 32 paths to wisdom.
Adam encouraged senior WeWork executives to participate in weekly
study sessions with his spiritual adviser at the time, Rabbi Eitan
Yardeni. “It was a lot about finding your inner peace and purpose,” an
executive who attended the meetings recalled. Neumann’s charisma was
intoxicating to be around. “If you had to go to war, you wanted him to
be your general,” a former executive said. “His sense of himself is
beyond human,” recalled another. Neumann paraded through the office
barefoot with celebrities like Drake and Ashton Kutcher and had an
unnerving ability to maintain eye contact during conversation, lending
him the aura of a guru. “When you’re in a room with Adam, he can
almost convince you of anything,” a former employee said. Neumann used
mass gatherings to spread his gospel. “I think the thing that all of
us know is that if you want to succeed in this world you have to build
something that has intention,” he said on stage at Summer Camp in
2013, his hair pulled into a ponytail. “Every one of us is here
because it has meaning, because we want to do something that actually
makes the world a better place. And we want to make money doing it!”
The crowd of thousands exploded in cheers. “So many of the people were
young and had never worked in a real company. They bought all of it,”
a former senior executive said. “I realized after I got there it was a
cult.”

Neumann’s gravitational pull was drawing in the world’s biggest
investors too. In the spring of 2016, Neumann met Masayoshi Son at a
dinner. The following year, Neumann invited Masa to WeWork
headquarters. Masa informed Neumann he had precisely 12 minutes to
hear a presentation. Afterward, Neumann followed Masa outside to his
car, hoping to continue the pitch. Masa told Neumann he didn’t think
his business plan would work. Neumann’s problem was that he needed to
think bigger. WeWork shouldn’t just be leasing offices to small
businesses--it should be leasing office space to all business. Masa
scribbled on an iPad the number SoftBank was prepared to invest: $4.4
billion. “Adam dazzled Masa,” an investment banker close to both men
told me.
Pumped up by SoftBank’s billions, Neumann’s messianism became more
like megalomania. “Adam’s fantasy land became a reality,” a former
WeWork executive said. Neumann sat down with world leaders, discussing
the Syrian refugee crisis with Canadian prime minister Justin Trudeau
and urban planning with London mayor Sadiq Khan. “When Adam got in
front of world leaders, it was like he started thinking he was one,” a
former executive said.
In conversations with people inside and outside the company, Neumann’s
pronouncements became wilder. He told one investor that he’d convinced
Rahm Emanuel to run for president in 2020 on the “WeWork Agenda.”
(Emanuel did not respond to a request for comment.) Neumann told
colleagues that he was saving the women of Saudi Arabia by working
with Crown Prince Mohammed bin Salman to offer women coding classes,
according to a source. In another meeting, Neumann said three people
were going to save the world: bin Salman, Jared Kushner, and Neumann.
Shortly after the news broke in October 2018 that Saudi agents
tortured dissident and Washington Post columnist Jamal Khashoggi and
carved his body with a bone saw, likely on order from the crown prince
himself, Neumann told George W. Bush’s former national security
adviser Stephen Hadley that everything could be worked out if bin
Salman had the right mentor. Confused, Hadley asked who that person
might be, according to a source familiar with the meeting. Neumann
paused for a moment and said: “Me.” Rebekah Neumann shared her
husband’s fervor that WeWork was a movement. “From the second I met
Adam there was an energy between us that felt like it was larger than
just the two of us,” she told the style website Coveteur. They married
in 2008, the year Green Desk launched, and she took on the role of
WeWork’s raven-haired five-foot-nine first lady. “I’m responsible for
all of the messaging, the mission, the values, and, most importantly
staying true to the DNA and mission of what we initially set out to do
at WeWork,” she told Coveteur. She held several titles, including
chief brand and impact officer, and cofounder. Senior executives
bristled at Rebekah’s nebulous, free-ranging role and her thin résumé.
Prior to WeWork, she’d lived in Los Angeles trying unsuccessfully to
make it as an actress and screenwriter. After college, she spent a few
weeks working on Wall Street before quitting, telling a friend the job
wasn’t for her. “He has a wife who wants to leverage this to be her
own major character,” said a source who’s interacted with Rebekah.
Executives wondered why the marketing consultant Jonathan Mildenhall,
whom WeWork hired to help develop its brand, was also advising Rebekah
on her personal image. (He asked her questions like, “Are you a
magician, maverick, or a muse?” said an executive who participated in
the session.) At company events, Rebekah interviewed luminaries like
Lin-Manuel Miranda and Red Hot Chili Peppers front man Anthony Kiedis.
Crossing Rebekah had consequences. SoulCycle cofounder Julie Rice,
who’d been recruited to WeWork in 2017 to become the company’s chief
brand officer, quit in part because Rebekah decided upon returning
from maternity leave that she wanted Rice’s title and took it, sources
said. (A source close to Rebekah said that Rebekah, as a WeWork
cofounder, had always had that title.) Last year, Rebekah fired a
mechanic for WeWork’s Gulfstream, two executives told me, because she
didn’t like his energy. In the fall of 2018, Rebekah opened WeGrow, a
for-profit school costing up to $42,000 a year, at WeWork’s
headquarters. “We couldn’t find the school that we felt would nurture
growth,” she told Fast Company, explaining how she got the idea to
create a school for their five children. Rebekah had very specific
ideas of what the ideal environment would be. “These children come
into the world, they are very evolved, they are very special. They’re
spiritual,” she told Fast Company. “They’re all natural entrepreneurs,
natural humanitarians, and then it seems like we squash it all out of
them in the education system.” She hired Danish architect Bjarke
Ingels to design an airy space that featured an indoor “vertical
garden” and “acoustic clouds” hanging from the ceiling. To serve as
her COO, she recruited education entrepreneur Adam Braun by acquiring
Braun’s college alternative start-up MissionU for $4 million (Braun’s
brother is Justin Bieber manager Scooter). The curriculum included
classes in mindfulness, yoga, meditation, and farming. Students ate
vegetarian meals and were taught Spanish and Mandarin, and parents
could enroll their children in their Hebrew language immersion
program. Children could even be paired with a professional mentor. “In
my book, there’s no reason why children in elementary schools can’t be
launching their own businesses,” Rebekah told Bloomberg. Although many
families loved the whimsical little school (more than half the kids
received financial aid, the school says), it was not entirely a
utopia. Early on, a WeWork administrator called WeWork’s HR department
in a panic. The school’s security guards were threatening to quit
because they hadn’t been paid in a month, a former executive recalled.
It turned out human resources forgot to add them to the payroll,
according to a source familiar with the matter. Another source
recalled that parents protested Rebekah’s rule that nannies picking up
children were required to stand in the vestibule while parents were
allowed to wait inside the school’s lounge. (Rebekah didn’t want her
own nannies entering the school, two sources said.) “The whole thing
was about her and what was right for her children,” a person close to
the school said.

Adam Neumann, meanwhile, was pushing WeWork in new directions all at
once. In January 2019, WeWork rebranded itself The We Company. In
addition to WeGrow, it launched an apartment rental division (WeLive)
and a gym (Rise by We). WeWork signed deals to provide offices for
Fortune 500 companies including Amazon, General Electric, and
Facebook. The company tried selling software to companies that mapped
how employees used office space (part of what they called “Powered by
We”). But the new revenue streams didn’t make up for ballooning
losses. In 2018, WeWork’s revenue climbed to $1.8 billion, but it lost
$1.9 billion. “I didn’t understand how this was working and the
valuation kept going up,” a former senior executive said. Employees
sensed a bubble. “After Masa invested, I would sit in meetings and
we’d talk about growing by 100 million square feet in 2019,” recalled
another. “And I thought, You can’t spend that much money in the right
way.” Being seen as a visionary was part of Neumann’s business
model—but he increasingly was seen as a flake. Neumann skipped crucial
meetings or showed up late for no reason, according to two sources. To
secure face time, executives devised a strategy of riding with Neumann
to the airport before he jetted off somewhere. Sources told me he
basically stopped calling in for WeWork board conference calls. “It
was a Vichy board. They had no power. So what the fuck do you do?”
said a former senior WeWork executive. Neumann was becoming
increasingly self-destructive. In November 2018, he showed up late,
looking hung over, to a meeting with Khaldoon Khalifa Al Mubarak, the
CEO and managing director of Abu Dhabi’s sovereign wealth fund, at the
St. Regis in Manhattan, according to a source familiar with the
matter. WeWork executives were furious. Mubarak was having doubts
about SoftBank’s massive bet on WeWork, and Neumann was supposed to
reassure him. Remarkably, Neumann didn’t think it mattered. Over the
summer, he had negotiated a deal with Masayoshi to sell most of WeWork
to SoftBank for $16 billion. WeWork was on track to lose nearly $2
billion, and Neumann had his escape plan. He and his investors would
be insanely rich. “This was a pivotal moment,” a former WeWork
executive recalled. “Adam was acting like the SoftBank deal was done,
and we would be flush with cash.” On Christmas Eve 2018, Masa called
Neumann from Japan with the news that SoftBank wouldn’t be buying most
of WeWork after all. Instead, SoftBank would invest $2 billion more in
WeWork at an eye-popping $47 billion valuation. It was supposed to buy
Neumann enough breathing room to take WeWork public. Neumann was
blindsided by Masa’s reversal and did what countless others have done
seeking a new start—he headed west. That January, the Neumanns
relocated to their mansion in Corte Madera, just across the Golden
Gate Bridge from San Francisco. They brought their household staff and
a teacher from WeGrow with them and planned to spend two months on the
West Coast as Neumann hunted for deals. According to sources, he
pitched Apple CFO Luca Maestri on doing a deal with WeWork. It’s
unclear why Apple would want to invest in WeWork, and not
surprisingly, the company passed. (Apple didn’t respond to a request
for comment.) Neumann went to Google and proposed a partnership. They
too passed. Neumann batted around other investment ideas. He earlier
discussed buying Slack. “He sat there saying, ‘What companies can we
buy? Maybe we should buy Slack?’ ” a former executive recalled. When
Neumann returned to WeWork’s New York headquarters later that winter,
he seemed desperate. He barked orders and haphazardly reorganized
divisions, at one point having as many as 20 direct reports, according
to a former WeWork executive. “Masa said we’re gonna be a
trillion-dollar company!” he shouted, according to a former executive
who heard it. “You’re thinking billions and we should be thinking
trillions! You people need to be better than you are!” Neumann seemed
shocked by the scale of WeWork’s losses. Sources said he tangled with
WeWork’s then-CFO Artie Minson over the cash squeeze. Minson declined
to comment but a former senior executive said Neumann drove the
decision making. “Nothing could happen without Adam.”

Former executives said Neumann often reacted poorly. “You don’t bring
bad news to the cult leader,” one said.

Neumann argued WeWork would survive the cash crunch because its
gargantuan size gave Neumann the leverage to force WeWork’s landlords
to renegotiate leases at lower prices, according to a real estate
executive. “In the major cities in the world, WeWork is propping up
the office market,” he told a colleague around this time. “If I say
‘pencils down’ to my people, the value of buildings will plunge, and I
can go in and buy them on the cheap.” The executive was chilled by the
conversation. “We’re not talking about a Harvard Business School
analysis here. This has a predatory aspect to it.” WeWork’s venture
capital investors, meanwhile, had collectively poured more than $12
billion into the company, and they wanted to cash out. With no private
buyer, the only option was to go public.  It didn’t help that Neumann
was racing to find a financial lifeline as a darker side of his
company was appearing in the papers. In October 2018, Ruby Anaya,
WeWork’s 33-year-old director of culture, sued the company, citing its
“entitled, frat-boy culture” and claiming she had been fired after she
reported to human resources that she had been sexually assaulted at a
work event. The suit alleged that when Anaya walked offstage after
presenting an award at a WeWork conference in January 2018, an
intoxicated male employee forcibly kissed her. The lawsuit cited an
earlier incident from Summer Camp in 2017, in which a drunk coworker
allegedly groped her from behind. After both episodes, HR failed to
discipline the men, the suit said. “It was awful,” Anaya told me when
we met one afternoon last fall. “I remember saying [to HR], who has to
say something for it to be believed, Rebekah? Who is safe here? No one
is safe.” (A WeWork spokesperson said, “WeWork’s new executive
chairman Marcelo Claure has made clear he will not tolerate behavior
of the kind alleged in this lawsuit.”) A more immediate problem was
the air the unicorn bubble was leaking—fast. Uber shares debuted down
nearly 10 percent. “The whole world shifted,” a senior WeWork
executive said. “Uber was a big part of it. The narrative of the
unicorn was ending. Had we gotten out before that narrative shifted,
we would have been fine.” WeWork’s failed IPO vaporized as much as $40
billion of shareholder value in two months—a unicorn extinction event,
at least in the near term. It was comparable to the end of
tulipomania. Those who are losing the most are WeWork’s beleaguered
staff, many of whom had small equity stakes. They’d believed deeply in
Neumann, worked insane hours, and bought in fully to the WeWork dream.
“They pushed the narrative that this is your family, and you’re
supposed to spend a lot of time with them. It was somewhat incestuous.
It was like we were at war together,” a former staffer said. The
company’s IPO, the blessed liquidity event, was part of their faith,
built into their worldview. Now, thousands may lose their jobs, and
any equity is a distant dream. It’s hard to overstate their fury at
Neumann, who’s walking away a billionaire. Recently, the New York
Times reported a group of WeWork employees circulated an open letter
calling Neumann’s payout “graft.” “This company was designed and
managed to make a handful of people ungodly wealthy at the expense of
everyone,” a former executive told me. But WeWork was a group
delusion, and Neumann is not the only guilty party. “SoftBank deserves
a lot of responsibility,” a former WeWork executive told me. “It’s
very difficult for anyone to control themselves if you have a sugar
daddy like Masa.” Neumann is telling friends he took the fall for
financial decisions WeWork’s board of directors and his advisers had
all approved. He complains that he never wanted to sell the We
trademark back to the company, but WeWork lawyers told him he couldn’t
give it away for free, people familiar with the transaction said.
(WeWork didn’t respond to a request for comment.) He feels victimized
by the media and he insists the WeWork buildings he owned were
actually money-losing investments. He bought them to prove the WeWork
concept to skeptical landlords during the company’s early days. Wall
Street too deserves blame, he’s told people. Just last spring, bankers
from Goldman Sachs, Morgan Stanley, and JPMorgan were throwing
themselves at him, trying to secure WeWork’s IPO and the estimated
$100 million in fees it would generate. Neumann tells people bankers
told him that WeWork could be worth $90 billion. It wasn’t strictly
Neumann’s fault that investors no longer had the appetite for
money-burning start-ups like Uber and Slack. WeWork’s botched S-1 is
Wall Street’s fault, he told people. Why didn’t the bankers and
lawyers warn Neumann the disclosures he put in the S-1 would spark an
investor backlash, he asks his friends. Having once been a prophet, he
now speaks of himself as a martyr, people close to him say. The more
Neumann stewed, the more he came to believe he was the target of a
coup. Powerful interests wanted him out of the company, he tells
friends. The crash of WeWork’s IPO meant that investors who had pumped
billions into WeWork were suddenly at risk of losing their shirts, and
now they wanted to collect. Sources told me his prime suspect is
Benchmark Capital. In 2017, Benchmark led a boardroom putsch that
ousted Kalanick from Uber, and later sued Kalanick to force him off
Uber’s board. Neumann’s suspicions of Benchmark increased when he
learned that investor Michael Eisenberg, a Benchmark general partner,
rallied WeWork board members to dump Neumann after the delayed IPO,
sources said. (Eisenberg did not respond to a request for comment.)
For now, the Neumanns’ dream is over. In September, the company
announced it was getting rid of the Gulfstream and closing Rebekah’s
school. They withdrew all five of their kids. He tells friends he
wants to learn from his crash. In his office, he keeps a card with
three lessons he wrote: Listen. Be on time. Be a good partner. He
thought about flying to Tokyo to see his onetime patron Masayoshi Son
but decided not to. He tried drafting a letter to WeWork employees,
but as of mid-November, he hadn’t figured out what to say.

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Vladimir Putin & Xi Jinping, will jointly open the 4,000km "Power of Siberia" gas pipeline on December 2nd. @27khv
Law & Politics


The $12 billion project reduces Russia's reliance on the European
energy market & is seen as a symbol of the country's "pivot to Asia."

International Markets

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Currency Markets at a Glance WSJ
World Currencies


Euro 1.1013
Dollar Index 98.291
Japan Yen 108.94
Swiss Franc 0.9966
Pound 1.2894
Aussie 0.6784
India Rupee 71.595
South Korea Won 1176.25
Brazil Real 4.2267
Egypt Pound 16.1195
South Africa Rand 14.795

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Cocoa Futures thoughts @TommyThornton
Commodities


Emerging Markets


Frontier Markets

Sub Saharan Africa

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Called back our Ambassador to #SouthSudan for consultations as we re-evaluate our relationship with the Government of South Sudan @SecPompeo
Africa


We will work with the region to support efforts to achieve peace and a
successful political transition in South Sudan.

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"We are only now realising that under Mugabe things were actually softer, that he was shielding us from the mongrels that lurked behind him, the same bloodthirsty mongrels that are now in power," @BitiTendai @thetimes
Africa


Life in Zimbabwe was easier under Robert Mugabe than the “dour,
greedy” former enforcer who succeeded him as president, a leading
opposition figure has claimed after the latest vicious crackdown by
security forces.
The brutality of baton-wielding riot police, who witnesses said had
focused on women, coincided with the renaming of dozens of streets in
honour of President Mnangagwa to mark the second anniversary of the
ousting of Mugabe, who died in September.
“We are only now realising that under Mugabe things were actually
softer, that he was shielding us from the mongrels that lurked behind
him, the same bloodthirsty mongrels that are now in power,” Tendai
Biti, the country’s respected former finance minister, told The Times.
Mr Biti, 53, served in a unity government under Mugabe and his deputy,
Mr Mnangagwa, 77, who plotted his ousting in November 2017.
Tensions are rising in the state, where nearly half of the population
of 16 million are vulnerable to starvation, the United Nations has
warned.
Political and economic mismanagement have seen inflation soar to 700 per cent.
Shortages of water, fuel and foreign currency and frequent power cuts
have paralysed towns and cities. Most public sector doctors have been
on a strike over pay since September and hospitals have run out of
drugs and equipment.
Yet the government insisted that renaming 90 thoroughfares in ten
cities and towns, including the capital, Harare, and stripping the
last traces of its British colonial past would foster “understanding,
peace and diversity”.
Mr Biti, who was arrested, tortured and put on trial after last year’s
contentious election, which gave Mr Mnangagwa his own mandate, added:
“Our people are dying like flies, our health system has collapsed and
now they are renaming roads after themselves.”
In a reflection of Zimbabwe’s new allegiances as it weathers criticism
and sanctions from Europe and America, Fife Avenue in Harare is to
become Brezhnev Avenue after Leonid Brezhnev, who was the Soviet
leader in 1964-82. Mao Zedong is also to be honoured.
In addition to a new Emmerson Dambudzo Mnangagwa Road, a Liberation
Legacy Way is planned — a nod to Operation Restore Legacy, the
military move that brought Mr Mnangagwa to power two years ago.
Last week, China publicly rebuked Zimbabwe for underplaying the scale
of its financial support after published budget figures claimed that
its contribution was $3.6 million.
The Chinese embassy said its records showed that bilateral support
stood at $136.8 million for the first nine months of this year.
In parliament Mr Biti has accused Mr Mnangagwa’s regime of “siphoning
off” billions of dollars via agricultural subsidies and fuel deals.
The government denies the accusations of corruption.
Police violence last week aimed at supporters of the opposition
Movement for Democratic Change (MDC) underscored a recent warning by
the European Union that democratic conditions had deteriorated since
June when it re-engaged with the Zimbabwean authorities for the first
time since 2001.
Opposition events have been cancelled, critics and union leaders have
been beaten and kidnapped. Last week riot police used sticks, tear gas
and water cannon indiscriminately, including against passers-by and
bystanders, as an unarmed crowd gathered to listen to the MDC leader,
Nelson Chamisa.
Officers charged the crowds, beating them with truncheons. A number of
videos posted online showed police kicking unarmed women as they lay
on the ground and deliberately tripping up those who ran away and then
beating them.
A ten-month-old baby strapped on to her mother’s back was among those
rounded up and taken into custody. Witnesses said that the woman had
been on her way to the bank when she was caught up in the chaos.
In a tweet Tibor Nagy, the senior US diplomat in Africa, called “on
the government of Zimbabwe to cease such violence against its own
population”.

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In Dubai, sharing our story and incredible potential with entrepreneurs and investors, I will continue to toil both at home and abroad to put Zimbabwe back on its feet! @edmnangagwa
Africa


In Dubai, sharing our story and incredible potential with
entrepreneurs and investors, particularly in the crucial sectors of
fuel and power. I will continue to toil both at home and abroad to put
Zimbabwe back on its feet!

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09-SEP-2019 :: Emmerson Mnangagwa who was eulogising Mugabe as a Revolutionary Icon has failed and is frankly as untenable as his erstwhile Mentor.
Africa


Mario Vargas Llosa in his book, The Neighborhood which was a book
about Peru in the time of Fujimori and the The Doctor Vladimiro
Montesinos wrote’’Something bigger than you and me power. You don’t
fool around with power my friend’’
Jonathan Moyo said. “And, meanwhile, the people forgot the vision of
the liberation struggle. The people were saying, ‘What good is
liberation without food?’
And this is the point. Mugabe started well but then presided over the
immiseration of his country. Gross Domestic Product per capita has
shrunk by a third since the 1980s [IMF].
We are grateful to all those iconic leaders who liberated our conti-
nent of which Mugabe is one but at what price? Fighting for
independence is not the same as building an economy which provides
opportunity for all its citizens.
As some African leaders laud Mugabe today, @PastorEvan- Live argues:
“There can be no mixed feelings, misconceptions or complications about
Robert Muga- be’s legacy. He presided over the destruction of millions
of people’s lives over a span of 37 years.”

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Waste storage at Africa's only nuclear plant brimming @ReutersAfrica
Africa


Storage of high-level radioactive waste is a major environmental
concern in the region, as South Africa looks to extend Koeberg’s life
for another two decades and mulls extra nuclear power plants.
Koeberg, Africa’s only nuclear facility, is situated about 35 km
(21.75 miles) from Cape Town and was connected to the grid in the
1980s under apartheid.
“The Koeberg spent fuel pool storage capacity is currently over 90%
full. (These) pools will reach (their) capacity by April 2020,” Eskom
told Reuters in a statement
Anti-nuclear lobby group Earthlife Africa said South Africa could not
afford the social, environmental and economic costs associated with
nuclear waste.
“We have a ticking bomb with high-level waste and fuel rods at
Koeberg,” said Makoma Lekalakala, Earthlife Africa’s director.

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14-OCT-2019 :: Charlie Robertson [Chief Economist Renaissance Capital] has pronounced that South Africa [is] Heading for [a] Junk Downgrade.
Africa


A meme flying round on social media is that There is a New sex
position called the “Ramaphosa” Get on top and do nothing
[@danielmarven].
You will agree that the overall picture is not very pretty.

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Nigeria @cenbank effectively borrows USD to keep exchange rate fixed. @nonso2
Africa


The story of the Nigerian macro investment space. FDI (~$230m a
quarter) insignificant for a country of Nigeria's size. Foreign funds
only buying short term securities thanks to incredible returns as
@cenbank effectively borrows USD to keep exchange rate fixed.

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DR Congo palm-oil firm Feronia accused of abuses BBC @HR W
Africa


Feronia, a company 38% owned by the UK government’s development bank,
has been accused of a series of environmental and human rights abuses
in the Democratic Republic of Congo.
Workers complain of poor working conditions, low pay and exposure to
health hazards which the company ignores.
Human Rights Watch say that the company has been dumping toxic waste
into the Congo River, allegations that Feronia disputes.
The BBC's Catherine Byaruhanga reports.

Kenya

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Kenya's central bank lowers interest rates for the first time in 16 months @markets
Africa


Key Insights:

While low inflation gave policy makers scope to cut, a reduction
during the rate-cap era would have locked out more borrowers from
accessing credit, according to Yvonne Mhango, a sub-Saharan Africa
economist at Renaissance Capital.
The removal of the limit on borrowing costs that were in place for
three years helped the central bank to regain more control over the
transmission of policy decisions to the economy.
The accommodative stance shows that the central bank sees less
inflation risks as food costs remain stable, despite fears of
shortages due to insufficient rainfall in the agriculture-reliant
nation. Price growth has remained within the Treasury’s target of 2.5%
and 7.5% despite the drought, rising fuel costs and higher transport
and importation levies.
Private-sector credit growth, which was weighed down by the cap on
interest rates, is showing signs of recovery and expanded 6.6% in the
12 months through October from 7% in September.

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@DTBKenya Diamond Trust Bank (Kenya) Ltd. reports Q3 2019 EPS +7.143% Earnings here
Africa


Closing Price:           115.00
Total Shares Issued:          279602220.00
Market Capitalization:        32,154,255,300
EPS:             23.91
PE:                 4.810

Diamond Trust Bank Kenya Limited Q3 2019 results through 30th
September 2019 vs. 30th September 2018
Q3 Kenya Government securities – held to maturity 97.090646b vs.
97.952890b -0.880%
Q3 Loans and advances to customers (net) 192.006907b vs. 197.654564b -2.857%
Q3 Total assets 382.496447b vs. 384.976405b -0.644%
Q3 Customer deposits 283.091375b vs. 282.195323b +0.318%
Q3 Borrowed funds 12.567498b vs.  14.931950b -15.835%
Q3 Total shareholders’ funds 58.909615b vs. 51.873793b +13.563%
Q3 Total interest income 24.523201b vs. 26.451543b -7.290%
Q3 Total interest expenses [10.739568b] vs. [11.549209b] -7.010%
Q3 Net interest income 13.783633b vs. 14.902334b -7.507%
Q3 FX Trading income 1.407444b vs. 1.192633b +18.011%
Q3 Total non-interest income 4.367610b vs. 4.131271b +5.721%
Q3 Total operating income 18.151243b vs. 19.033605b -4.636%
Q3 Loan loss provision [870.271m] vs. [2.394379b] -63.654%
Q3 Staff costs [3.371507b] vs. [3.107636b] +8.491%
Q3 Other operating expenses [3.262127b] vs. [3.665052b] -10.994%
Q3 Total operating expenses [9.479640b] vs. [10.836468b] -12.521%
Q3 Profit before tax and exceptional items 8.671603b vs. 8.197137b +5.788%
Q3 PBT 8.687545b vs. 8.208617b +5.834%
Q3 Profit after tax and exceptional items 5.990840b vs. 5.641517b +6.192%
Q3 Basic and diluted EPS 20.10 vs. 18.76 +7.143%
Q3 Total NPL and Advances 15.056632b vs.  13.813861b +8.997%
Q3 Net NPL 9.314324b vs. 4.497360b +107.106%

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by Aly Khan Satchu (www.rich.co.ke)
 
 
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November 2019
 
 
 
 
 
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