Again, the impending decimation of global demand in the face of weak US spending is being interpreted as good news by market commentators with their noses pressed to currency rates. It is doubtless good news that inflation appears to be easing. If it does so in the Gulf, it could alleviate the uglier aspects of the boom, and if it does so among the biggest consumers of the Gulf's oil, it could underpin the boom.
The problem remains, however, that the global economy now appears to be slowing in line with the US economy. So the sharp rally in the dollar is more about a retreat from risk than it is a reappraisal of growth prospects. It certainly does not mean that the financial crisis has no more woe to inflict. Commodity prices, while they have fallen sharply, remain historically high, imposing a significant drag on growth. And a rising dollar certainly doesn't do much to maintain the one thing helping the US economy right now - rising exports.
Yet there are some analysts, mainly in the West, who perceive a bottom in the financial crisis having come with the bailouts of Fannie Mae and Freddie Mac, and who say that the growing likelihood of a global slowdown will result in sharply lower global commodities demand and slower inflation. This would seem an argument to return to bonds, which have been battered in recent weeks by inflation concerns.
But analysts in Asia and the Middle East say they still see little sign that inflation is abating. Keep in mind that folks in these parts have so far been behind the curve in the Great Decoupling Debate - Asia does not after all appear to be immune to the West's slowdown, nor is it helping to cushion the global economy from the blow. No one is wrong or right here, really: the US slowdown has proved more severe than most people predicted, an outcome that even ardent decouplers warned would overwhelm the intraregional dynamism of emerging Asia.
Still, if commodities demand in emerging markets does offset "demand destruction" in the West, decoupling may yet manifest itself as persistently high commodity prices and continued inflation. This would be an argument for buying emerging market stocks and other real assets, including real estate and commodities.
It would be a relief to see either combination emerge as a clear trend: a global slowdown pulling inflation down with it and an easing of the credit crunch, or a continued credit crunch and emerging market-led inflation pushing up prices for real assets. Either one would mean an end to the stagflationary rut we're in that is eroding the value of all assets together.
But I suspect that the shift has yet to come and that it is too early to look for either an end to inflation or a bottom in credit risk - even if credit default swaps have apparently declined. Like other financial crises, this one has yet to burn itself out. We have not seen the distressed assets being written off start to sell again. Once the US mortgage market starts to clear, once UK housing stops declining, or real estate in Australia improves, then it could be a sign the worst of the credit crunch has passed.
Then, it will take some new engine of growth to pull the global economy forward. And usually, we only find out what that is after it's already underway. And just as often, it seems, these new engines become the next bubble. It was thus with tech, and again with the post 9/11 liquidity bubble. Some suggest that the so-called emerging markets, led by Chinaand India but including Russia, Brazil, Southeast Asia and the Gulf will emerge from the slowdown as the new engines of growth. This jibes with what I've been writing since the beginning of this blog: that what we are witnessing is the shuddering decline of the American-dominated global economic order and a shift of the balance towards the emerging world. This financial crisis is a paroxysm, not a death rattle.
In the meantime, the retreat from risk means zero tolerance for financial legerdemain. So while assurances from regulators are appropriate, allegations of fraud among local property developers and lenders are likely to be punished with even more redemptions by foreign investors.
It is important during this period not to equate falling stock prices with evidence of wrongdoing. Falling stock prices tend to lend urgency to allegations, but in this environment they prove absolutely nothing.
That isn't to say the allegations are false, but a more meaningful indicator of whether smart money believes them to be true might be to track what happens with property prices and lending rates locally.
Concerns about the creditworthiness of borrowers and the veracity of financial statements should raise risk premia, pushing up further interbank rates, bond yields and mortgage rates.
The specs
Engine: 2.5-litre, turbocharged 5-cylinder
Transmission: seven-speed auto
Power: 400hp
Torque: 500Nm
Price: Dh300,000 (estimate)
On sale: 2022
The specs
Engine: 3-litre twin-turbo V6
Power: 400hp
Torque: 475Nm
Transmission: 9-speed automatic
Price: From Dh215,900
On sale: Now
List of UAE medal winners
Gold
Faisal Al Ketbi (Open weight and 94kg)
Talib Al Kirbi (69kg)
Omar Al Fadhli (56kg)
Silver
Zayed Al Kaabi (94kg)
Khalfan Belhol (85kg)
Zayed Al Mansoori (62kg)
Mouza Al Shamsi (49kg women)
Bronze
Yahia Mansour Al Hammadi (Open and 94kg)
Saood Al Hammadi (77kg)
Said Al Mazroui (62kg)
Obaid Al Nuaimi (56kg)
Bashayer Al Matrooshi (62kg women)
Reem Abdulkareem (45kg women)
Small Victories: The True Story of Faith No More by Adrian Harte
Jawbone Press
The more serious side of specialty coffee
While the taste of beans and freshness of roast is paramount to the specialty coffee scene, so is sustainability and workers’ rights.
The bulk of genuine specialty coffee companies aim to improve on these elements in every stage of production via direct relationships with farmers. For instance, Mokha 1450 on Al Wasl Road strives to work predominantly with women-owned and -operated coffee organisations, including female farmers in the Sabree mountains of Yemen.
Because, as the boutique’s owner, Garfield Kerr, points out: “women represent over 90 per cent of the coffee value chain, but are woefully underrepresented in less than 10 per cent of ownership and management throughout the global coffee industry.”
One of the UAE’s largest suppliers of green (meaning not-yet-roasted) beans, Raw Coffee, is a founding member of the Partnership of Gender Equity, which aims to empower female coffee farmers and harvesters.
Also, globally, many companies have found the perfect way to recycle old coffee grounds: they create the perfect fertile soil in which to grow mushrooms.
England's all-time record goalscorers:
Wayne Rooney 53
Bobby Charlton 49
Gary Lineker 48
Jimmy Greaves 44
Michael Owen 40
Tom Finney 30
Nat Lofthouse 30
Alan Shearer 30
Viv Woodward 29
Frank Lampard 29
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
A State of Passion
Directors: Carol Mansour and Muna Khalidi
Stars: Dr Ghassan Abu-Sittah
Rating: 4/5
La Mer lowdown
La Mer beach is open from 10am until midnight, daily, and is located in Jumeirah 1, well after Kite Beach. Some restaurants, like Cupagahwa, are open from 8am for breakfast; most others start at noon. At the time of writing, we noticed that signs for Vicolo, an Italian eatery, and Kaftan, a Turkish restaurant, indicated that these two restaurants will be open soon, most likely this month. Parking is available, as well as a Dh100 all-day valet option or a Dh50 valet service if you’re just stopping by for a few hours.
The specs
Engine: 2.0-litre 4-cylturbo
Transmission: seven-speed DSG automatic
Power: 242bhp
Torque: 370Nm
Price: Dh136,814
The Brutalist
Director: Brady Corbet
Stars: Adrien Brody, Felicity Jones, Guy Pearce, Joe Alwyn
Rating: 3.5/5
Killing of Qassem Suleimani
Europe’s rearming plan
- Suspend strict budget rules to allow member countries to step up defence spending
- Create new "instrument" providing €150 billion of loans to member countries for defence investment
- Use the existing EU budget to direct more funds towards defence-related investment
- Engage the bloc's European Investment Bank to drop limits on lending to defence firms
- Create a savings and investments union to help companies access capital
What are the GCSE grade equivalents?
- Grade 9 = above an A*
- Grade 8 = between grades A* and A
- Grade 7 = grade A
- Grade 6 = just above a grade B
- Grade 5 = between grades B and C
- Grade 4 = grade C
- Grade 3 = between grades D and E
- Grade 2 = between grades E and F
- Grade 1 = between grades F and G
The specs
Engine: Four electric motors, one at each wheel
Power: 579hp
Torque: 859Nm
Transmission: Single-speed automatic
Price: From Dh825,900
On sale: Now
Our Time Has Come
Alyssa Ayres, Oxford University Press
Ain Issa camp:
- Established in 2016
- Houses 13,309 people, 2,092 families, 62 per cent children
- Of the adult population, 49 per cent men, 51 per cent women (not including foreigners annexe)
- Most from Deir Ezzor and Raqqa
- 950 foreigners linked to ISIS and their families
- NGO Blumont runs camp management for the UN
- One of the nine official (UN recognised) camps in the region
if you go
The flights
Etihad flies direct from Abu Dhabi to San Francisco from Dh5,760 return including taxes.
The car
Etihad Guest members get a 10 per cent worldwide discount when booking with Hertz, as well as earning miles on their rentals (more at www.hertz.com/etihad). A week's car hire costs from Dh1,500 including taxes.
The hotels
Along the route, Motel 6 (www.motel6.com) offers good value and comfort, with rooms from $55 (Dh202) per night including taxes. In Portland, the Jupiter Hotel (https://jupiterhotel.com/) has rooms from $165 (Dh606) per night including taxes. The Society Hotel https://thesocietyhotel.com/ has rooms from $130 (Dh478) per night including taxes.
More info
To keep up with constant developments in Portland, visit www.travelportland.com
Globalization and its Discontents Revisited
Joseph E. Stiglitz
W. W. Norton & Company
Analysis
Members of Syria's Alawite minority community face threat in their heartland after one of the deadliest days in country’s recent history. Read more
COMPANY PROFILE
Name: Rain Management
Year started: 2017
Based: Bahrain
Employees: 100-120
Amount raised: $2.5m from BitMex Ventures and Blockwater. Another $6m raised from MEVP, Coinbase, Vision Ventures, CMT, Jimco and DIFC Fintech Fund
Learn more about Qasr Al Hosn
In 2013, The National's History Project went beyond the walls to see what life was like living in Abu Dhabi's fabled fort:
Key figures in the life of the fort
Sheikh Dhiyab bin Isa (ruled 1761-1793) Built Qasr Al Hosn as a watchtower to guard over the only freshwater well on Abu Dhabi island.
Sheikh Shakhbut bin Dhiyab (ruled 1793-1816) Expanded the tower into a small fort and transferred his ruling place of residence from Liwa Oasis to the fort on the island.
Sheikh Tahnoon bin Shakhbut (ruled 1818-1833) Expanded Qasr Al Hosn further as Abu Dhabi grew from a small village of palm huts to a town of more than 5,000 inhabitants.
Sheikh Khalifa bin Shakhbut (ruled 1833-1845) Repaired and fortified the fort.
Sheikh Saeed bin Tahnoon (ruled 1845-1855) Turned Qasr Al Hosn into a strong two-storied structure.
Sheikh Zayed bin Khalifa (ruled 1855-1909) Expanded Qasr Al Hosn further to reflect the emirate's increasing prominence.
Sheikh Shakhbut bin Sultan (ruled 1928-1966) Renovated and enlarged Qasr Al Hosn, adding a decorative arch and two new villas.
Sheikh Zayed bin Sultan (ruled 1966-2004) Moved the royal residence to Al Manhal palace and kept his diwan at Qasr Al Hosn.
Sources: Jayanti Maitra, www.adach.ae
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Crazy Rich Asians
Director: Jon M Chu
Starring: Constance Wu, Henry Golding, Michelle Yeon, Gemma Chan
Four stars
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