Something is afoul in Tonga...

Tonga and an Abu Dhabi based firm have agreed to terms to build a solar plant on the island of Vava'u. This plant will provide up to 13% of Tonga's energy needs, which is spectacular. Of course Tonga has a tiny population in comparison to the United States, but if the US could take initiative like the small Oceania nation, energy needs could be met through renewable resources as well. But that is neither here nor there.

What is afoul though has nothing to do with renewable energy, but new islands showing up near the Vava'u archipelago in 2006 and now a company from the United Arab Emirates is linking up with a nation that produces new islands. The UAE has long been looking to make artificial islands. The Palm Islands are examples of how the UAE has been tampering with mother nature to produce man-made islands. So too is Saadiyat Island, a construction project designed to create another rich enclave near Abu Dhabi, as if there weren't enough wealthy sections already.

Why do I smell something fishy here? Other than the obvious Ocean reference that I won't bore you with, the metaphorical thrust of what I'm going for is this: the UAE has a tendency to build islands by any means necessary. They throw sand in the water and then force workers to do things that the Human Rights Watch condemns. While this corporate bullying is nothing all that spectacular, if the UAE gets the prerequisite knowledge of how to make artificial islands by tapping into volcanic power, millions of exploited workers could be out of a job. Plus, evil lurks in volcanos.

I have this sinking suspicion that the UAE sheiks have found a way to revive Blofeld and place him in a new volcano lair somewhere near Tonga. I think that the renewable solar power plant will be a cover for the new Blofeld and his nefarious activities. If Blofeld is allowed to be revived the world would be in serious trouble. MI-6's most famous agent James Bond is MIA because of MGM's financial troubles. See how the global financial meltdown is still doing us harm!! Blofeld will be able to control the seas from his volcanic lair with impunity. With UAE knowhow he will create island after island that will eventually swallow up the Pacific Ocean. Enjoy your renewable power now Tonga, because you'll soon have to face the wrath of Blofeld and his minions. Unless MGM can get its finances in order, there will be no nearly naked and unfairly svelte and yet incredibly rugged Daniel Craig to save you...

Gerhard Richter is coming to Israel!!!

Gerhard Richter's painting Abstraktes Bild 849-3, completed in 1997 was sold at Sotheby's in November of 2011 for $20.8 million dollars. It was originally thought that the French Billionaire Bernard Arnault had bought the painting for the $200 million dollar museum he's planning on building in Paris. Apparently though, it was not and the Richter is heading to Israel and not to France.

Lily Safra, the widow of the banker Edmond J. Safra bought it and promptly donated it to the Israel Museum. Safra is no stranger to splashing out or as the kids say it, making it rain over art. In 2010, she bought Alberto Giacometti's bronze statue Walking Man I for a reported $104.3 million dollars.

In unrelated news we have just purchased a canvas, some oil paint, a squeegee and a spam email account aimed at Lily Safra and her incredibly deep purse. We shall be working on our work for the next forty-two minutes and then sending the spam mail featuring pictures of it to her in clandestine ways. Wish us luck!!

Arabian Nights with Cold Stone

Hanover Line I-XIII

Last time on the Hanover line of thinking we discussed some of the dilly-dally between hedge funds in Washington DC and powerful Emirate princes. Since we were in the region, we thought we might have a little look see all about the Emirates.

In Abu Dhabi residents are looking forward to the first ever appearance by the World Wrestling Entertainment show featuring John Cena and Chris Jericho. On a safety note if you are in the vicinity don't drink the 250 ml Vimto fruit drink, they're contaminated.

In Ajman officials are trying to make the city much safer for their residents. First, they imposed new safety regulations on the skyscrapers that host apartments. Second, they banned the breeding of wild animals in the home.

In Dubai we have gyms purporting to be a concentration camp for calories whilst using a picture of Auschwitz to advertise. Meanwhile some of the wealthiest in Dubai may busy for the next two hours trying to rack up a $100,000 bar tab.

In Fujairah they're wrapping up plans to bring the high speed train to town. Incidentally the four men caught with 22kg of hashish at the Fujairah border yesterday wish the train had been built earlier.

In Ras al-Khaimah they're working on building better economic ties with the US. Ever since the Cold Stone Creamery opened up American flavors have been in hot demand.

In Sharjah they're rolling out a new and more disciplined recycling plan to keep it green (so to speak, there's a lot of sand). Also they're in the habit of setting up drive-in movie theaters in the absolute middle of the desert for offroad enthusiasts.

In Umm al-Qaiwain some bad chocolates were seized when it was discovered that there was a whole bunch of larvae in the sweets. One woman was so mad that her husband had bought these contaminated chocolates she threw a frying pan full of hot oil at her husband.

So there you have it. If anyone asks you whats up in the UAE you can tell them, people are going the WWE and four-wheeling to the drive-in whilst choosing to drop an hundred large on some bubbly (no Mimosas - the juice is bad), looking for some hashish because none of its getting into the country, which could be potentially bad for the new munchies hotspot Cold Stone Creamery, incidentally which, is the only place you should eat chocolate.

Solving an awkward problem

Would you like to buy lingerie from this man? I didn't think so. He agrees. This is King Abdullah of Saudi Arabia and he has recently decreed that men can no longer sell lingerie to woman ending years of awkward exchanges. This has sent some Saudis into a fit because it means that women will have to work, something that strict Muslims do not approve of. But, for now, women in Saudi Arabia no longer have to buy their underwear in awkwardness. One giant step forward in women's lib movement right?

Crooks and Sheikhs

Hanover Line I-XII

Last time on the Hanover think tank we had a little jaunt into Tampa's woes in the sporting world. So naturally we will continue our progression with the natural jump to private equity philandering in Abu Dhabi and a possible international incident. It's as natural as Sunny Delight Orange Substance. Delicious too.

Sheikh Seif Bin Zayed Al Nahyan, deputy prime minister of the United Arab Emirates and a member of the royal house of Abu Dhabi owns Emirates International Investments and has been working with Emerging Capital Partners, a Washington DC based trading company (sort of but it's technical and dull to write what they get into. If it's boring to write for me imagine how boring it will be for you to read. You can thank me by clicking on some links to the side right there. Go on, you're so close. It's probably something that you've been thinking about...) Anyway, shameless self-promotion aside, the American company had been investing the Sheikh's money in a fund that has just been pounded over the last year, losing 50%. So there was some disgruntled members of the fund and this caused some major fall out.

So basically it works like this. If I'm wealthy I pay into a fund and promise to invest "X" amount of dollars for the management company to invest. Then I have to make payments (like a salary) to the management company on time. I can then take the dividends from the investment to make money or pull my investment out with enough notice to the management. If I don't make those salary payments on time the company that manages the fund can penalize me up to the total amount that I invested.

ECB, the Washington DC company says that the Sheikh and his investment partners were late on payments 5 out of the 6 times. The Sheikh says this isn't exactly true. So the two companies got together in Paris last year to resolve some issues. The Sheikh was unhappy that his $40 million dollar investment was now worth only $20 million. ECB was unhappy that they weren't getting paid on time (roughly $1 million dollars ever 2 months or so). Some sort of agreement was reached in Paris though both sides tell different versions of the story. The Sheikh says he agreed to pay the last fee but that he and the other investors would be taking their money out and thus winding down the fund. ECB says that they only emphasized how important it was to pay on time. When the Sheikh (and other investors) discovered that their money was reinvested rather than paid out to them they cried foul. Then ECB came down with a hammer on the Sheikh and took the entirety of the Sheikh's investment because the payments were late. Technically that's legal. Basically ECB said you get nothing, good day sir.

Two things. The Abu Dhabi has more money than Solomon so losing $40 million isn't going to cause them too much financial strain. That said, it's irrelevant. Ok, now my two things.

1) That this is legal tells you some of the reason why people are upset with companies like ECB. I understand that these companies have to ensure timely payments in order to have the best staff to manage this amount of money but come on. You can't really morally justify taking $20 million dollars from anyone for being late on a payment.

2) That ECB would go to this route beggars all belief. The payments to these guys are astronomical. $1 million dollars to manage $40 million is 2.5% of the investment - not a huge number but not small either. And while this isn't sympathy these traders do take on high risk, high stress jobs and have gone through extensive training and education. They deserve good salaries. But when you are paid that amount of money to steal $20 million dollars, albeit legally. You're not engendering yourself very well to an already hostile public and political environment. Plus, you're wealthiest investors over the twenty years are going to be Middle Eastern, Russian, and Chinese moguls. You've just lost that market.

The solution here is simple. The financial markets have to be told that you can't steal people's money. Cap the amount on penalties to a percentage not approaching the better side of 10% for penalties. Repeat offenders can feel the heat by penalizing them slowly. However, don't choke the investment business with undo regulations because the free market will do a good enough job snuffing out the crooks like this.

The Trial of Hosni Mubarak

The Arab Spring once looked destined to fail. How could the self-immolation of a street vender set off such a rippling effect to topple governments all over the Arab world? Yet the overthrow of his country, Tunisia, neighboring Egypt and then Libya all happened. Syria and Yemen are still in the throws of revolution. Oman, Kuwait, Morocco, Jordan, Bahrain and Lebanon had governments make concessions to protestors. Violent protests came to the streets of Algeria and Iraq. Lesser, but still raucous protesting occurred in Western Sahara, Mauritania, Sudan and Saudi Arabia. But the three nations where the government was overthrown have dealt with the deposed differently.

In Tunisia, President Zine El Abidine Ben Ali was exiled to Saudi Arabia. In Libya, Colonel Gaddafi was killed in the streets. But, in Egypt, former President Hosni Mubarak stands on trial for ordering the killings of some of the protestors. Egypt held elections that saw the once banned Muslim Brotherhood and a Salafist party called Nour taking large chunks of the vote. This has caused many Western observers to feel a little bit nervous over the trajectory of the Egyptian revolution. But, the greatest danger to the world is not an Islamist government in Egypt, but a retention of power in the military's hands. Egyptians fear that the military, which has been doing a caretaker government, will interfere with the trial of Hosni Mubarak.

Today the prosecutors announced that they will seek the maximum penalty for the former president, execution by hanging. A number of policemen had charges of killing rioters dropped against them last week, further stoking fears that the military is stepping into the court system and delegitimizing the process. Whatever the outcome of the trial, the Western world must not do anything to hinder a democratic process. Any aid to the military against the democratic process will only spark more anti-western sentiment. As unpalatable as an Islamist Egypt may appear, the West has worked well with Saudi Arabia, one of the most fundamental of the Arab States. An Islamist government is far more preferable to a failed state or a military dictatorship where the citizens become so disenfranchised they seek out the terrorist leaders for purpose. A stable Islamist Egypt is a much better scenario for the whole world, than a rouge state.

As Egypt moves further though it must seek to provide justice to both its citizens and its former president. If the trial acquits him in a way that looks tainted there will be blood on the streets. If the trial hangs him out of revenge, then the blood will be on the hands of the revolutionaries and taint the new dawn of Egypt.

Saber-Rattling 101

Iran and the United States have stepped up their saber-rattling this season with some arguments over the Strait of Hormuz. This strait is important to the world because of the oil that goes out of it, some 40% of the world's supply. Iran did some military exercises and threatened an American carrier. America tightened the sanctions sending Iran's economy into a downward spiral. The tensions are mounting and emotions are running high. Neither side wants a war. President Obama is working on drawing down American involvement in the Middle East from a military level and a war with Iran would not be a quick little jaunt into nation decimation. For its part, Iran has shown some new shiny missiles that could target American bases, but the end result would be utter destruction on a scale of Alexandrian conquest. But, as this probably will not escalate into war it is appropriate to look at some great saber-rattling throughout history.

1) In the Cromwell era of England the Parliamentarians were assisted by the Netherlands navy. The Netherlands had been aided by England for some time and the Dutch saw fit to return the favor. But the Royalist Navy had pummeled the Dutch Navy, especially near the Isles of Scilly. Finally the Dutch Admiral Maarten Harptszoon Tromp landed on the isles and demanded reparations for the damages done to the Dutch navy. When he was rebuffed he declared war on this and this part of England only resulting in a war that has become known as the three hundred and thirty-five year's war. No shots were ever fired and peace finally came in 1986. So some saber-rattling in 1651 started a tension building situation, but there was further saber-rattling in the peace treaty as well when Rein Huydecoper the Dutch ambassador came to the Isles of Scilly and said, "it must have been harrowing to the Scillonians to know we could have attacked at any moment". Saber-rattling par excellence.

2) In 1861 the New York hamlet of Town Line (near Buffalo) voted to secede from the Union and join the Confederate States of America. The town sent five soldiers to fight for Robert E. Lee. Ultimate saber-rattling.

3) During World War II the dictator of the Dominican Republic, Rafael Trujillo declared war on Hitler's Germany. When Hitler was informed of this he called for a map to be brought to his table so he could locate his new enemy. When he found the island nation he took out a marker and drew a big "X" over the island. That's a humiliating saber-rattling.

Let's hope that the current saber-rattling between Iran and the USA can be solved with markers too.

Bedlam in Bethlehem

Oh little town of Bethlehem,

how still we see thee lie,

A fight between the priests with brooms

The scars will soon be nigh!

Too easy. Too cheesy.

Riot police were called in to deal with a melee between Greek Orthodox priests and their Armenian brethren in which both sides wielded the weapons of war, broomsticks. Click here for video. The Church of the Nativity is maintained by Roman Catholics, Greek Orthodox and Armenian Apostolic priests and monks. Unfortunately, they don't always play nice when they enter each other's territories. This time the brush up wasn't over the well-known filioque controversy, the Romans weren't even involved in the brouhaha. But it also appears that no Crude Jude jokes were cracked by the Greeks and no chants of "we were first" came from the Armenians. There doesn't seem to have been any Byzantine theological debate debacle, just a scuffle because someone crossed the invisible line that one of the priests had called out. I don't have much else more, but I think a Banksy tag is in the making.