Saudi Arabia is on the verge of a political and economic crisis.

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Saudi Arabia is on the verge of a political and economic crisis.

Are the Saudis nervous? Very. The royal family feels threats from within the country and without, as the price of oil plunges, the predominantly young population grows restless, and Saudi Arabia’s bitter rival, Shiite Iran, seeks to expand its influence throughout the region. The Saudis were also deeply alarmed by the Arab Spring, which saw long-established regimes crumble; the U.S.’s nuclear deal with Iran; and the rise of ISIS.

Since King Salman took the throne a year ago, Saudi authorities have intensified government repression to a severe degree. New counterterrorism legislation, enacted shortly before he took power, defines terrorism as any act with criminal intent that undermines public order, as well as any “deviant thought” that questions Wahhabism, the fundamentalist sect of Sunni Islam that dominates all aspects of Saudi life.

What is the impact of this law?

Any form of dissent is being prosecuted as a crime. Executions are at a two-decade high, with more than 150 public beheadings in 2015 and 47 in just the first week of this year — including the execution of a prominent Shiite cleric (see below), an act that led Iran to sever diplomatic ties. For urging Saudi society to be more liberal and secular, prominent blogger Raif Badawi was flogged, and his lawyer was jailed for defending him. When the lawyer’s wife complained on Twitter about his arrest, she was jailed, too.

Who’s pushing this crackdown?

A new group of leaders. The House of Saud has been led by elderly sons of modern Saudi Arabia’s founder, Ibn Saud, for many decades. But King Salman, 80, has chosen not to name one of his younger half-brothers as his likely successor. Instead, he appointed his son Mohammed bin Salman al Saud, 30, as deputy crown prince and defense minister — and Mohammed is clearly the real power behind the throne. Unlike the older, U.S.-educated generation, Mohammed went to a Saudi university, has had little exposure to Western culture, and has “a reputation for arrogance and ruthlessness,” says Bruce Riedel of the Brookings Institution.

What has Mohammed done?

The young prince plunged straight into a war in Yemen. “The previous, cautious diplomatic stance of older leaders within the royal family is being replaced by a new, impulsive policy of intervention,” said a report from the German foreign intelligence service BND. Saudi Arabia is locked in a struggle with Iran for primacy in the Middle East. The rise of a Shiite government in Iraq brought that country firmly into the Iranian camp, and Lebanon was already there. The conflict in Syria has become a proxy war between the Assad regime, backed by Iran, and militias funded by the Saudis. So when Shiite Houthi militants toppled the Yemeni government, Mohammed moved in swiftly to prevent his country from being bookended by Shiite powers. Saudi airstrikes have killed thousands of Yemeni civilians, but the prince has been undeterred.

What about domestic policy?

Mohammed says he plans sweeping, market-based economic reforms. For 80 years, the Saudi economy has been based almost entirely on oil revenue. High oil prices brought in enormous wealth, which enables the government to fund a generous welfare state without levying any income tax. Most actual work is done by foreigners — a vast army of nearly nine million immigrants from South Asia and the Middle East who serve some 18 million Saudis. Saudis are employed largely in the bloated public sector, many of them drawing fat salaries for little work. But this model is becoming unsustainable. People under 25 make up more than half the population, and there aren’t enough jobs for them as they reach working age. Worse, the collapse in oil prices — from $115 a barrel in 2014 to under $35 now — means there isn’t enough money flowing in to sustain benefits at such generous levels.

Why not?

In the past, when oil prices have fallen, the Saudis have cut production to raise them. But this time, they’ve kept pumping with abandon. The goal is to preserve Saudi market share by driving higher-cost oil producers — notably the U.S. fracking industry — out of business. But the sharp drop in revenue requires painful cuts to the subsidies and expense accounts that so many Saudis rely on.

How will Saudis react to those cuts?

That’s one of the things worrying the royal family. The Saudi people have long had a tacit agreement with their rulers: In return for a cushy life and generous benefits, they put up with an almost total lack of political freedom or say in their own government. Many Saudis are rich enough to skip off to Bahrain or Dubai for the weekend, where they can drink alcohol and the women can shed their burqas. Most, though, are middle-class, and around one-fifth are actually poor, and if Mohammed makes good on his pledge to replace the free health care with an insurance-based system and partially privatize education, they will suffer. “With a decline in social spending and a reduction in subsidies,” says analyst Alberto Gallo, “comes the risk of rising domestic turmoil.”

The oppressed Shiite minority

The Saudi regime said it executed Shiite cleric Nimr al-Nimr for terrorism, but critics said the real reason was his activism in organizing the Shiite minority and denouncing the House of Saud. Shiites make up 15 percent of the population in Saudi Arabia, and they are strongly discriminated against. They are excluded from the cushy government jobs, and Saudi television and Saudi clerics routinely spread anti-Shiite propaganda. For three years, activists in the oil-rich eastern province of al-Ahsa, abutting Shiite-majority Bahrain, have been protesting, sometimes violently. “You are now standing on top of oil fields that feed the whole world,” Shiite activist Fathil Al Safwani told the BBC. “But we see nothing of it. Poverty, hunger, no honor, no political freedom, we have nothing.” By executing Nimr, the House of Saud sent a clear signal that nothing will change; indeed, even complaining about anti-Shiite discrimination will get you beheaded.

Source: http://bit.ly/1nNQ8tb

 

Islamist group Boko Haram burned dozens of children alive in Nigeria.

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Islamist group Boko Haram burned dozens of children alive in Nigeria. 

Members of the radical Islamist group Boko Haram burned dozens of children alive as part of an assault in Nigeria that killed 86 people, a survivor of the attack alleged.

The incident happened Saturday night in the village of Dalori in northeastern Nigeria. Two nearby camps housing 25,000 people who have fled Boko Haram were also attacked.

The Associated Press said it spoke to a survivor who said he watched Boko Haram extremists firebomb huts and heard the screams of children burning to death. Survivor Alamin Bakura told the AP that several of his family members were killed or wounded in the the attack, which lasted for nearly four hours.

A soldier at the scene told the AP that three female suicide bombers blew themselves up as part of the assault, but there was little information about the sequence of events that led to the deaths of the children. USA TODAY was unable to verify the account.

Mohammed Kanar, the area coordinator of Nigeria’s National Emergency Management Agency, said 86 bodies, many of them charred and riddled with bullets, were collected by Sunday afternoon.

Source: http://usat.ly/1PWUj2x

Wall Street Says It May Be Forced to Fundamentally Question How Capitalism Is Working.

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Wall Street Says It May Be Forced to Fundamentally Question How Capitalism Is Working.

One of the most heated debates among investors is the question of whether corporate profit margins can maintain their elevated level, or whether they will inevitably revert to mean.

Here’s a quick look at S&P 500-stock index profit margins, for example, going back more than 25 years. They remain high by historical standards.

A new note from Goldman Sachs Group Inc. analysts led by Sumana Manohar looks at the bull and bear arguments for the profit margins debate.

Manohar argued that profit margins have expanded, thanks to four key trends: strong commodities prices, emerging market cost arbitrage (companies making things more cheaply in emerging markets), demand growth from emerging markets, and improved corporate efficiency driven by the use of new technology. Continuing one of its major analytical themes of recent months, Goldman also noted that the market has rewarded companies that have undertaken mergers and share buybacks, as opposed to companies that have invested internally, further bolstering margins.

So will profit margins inevitably roll over?

Goldman went through both sides of the argument. On the bull side, the bank said that ongoing consolidation in industries, cost deflation, and tighter purse strings help keep a floor under margins. Ultimately though, it found that the above trends, coupled with weak demand and general industrial overcapacity, mean that margins are likely to come down.

But what if margins stay elevated? That too is possible, and its implications could be unsettling.

Goldman wrote: “We are always wary of guiding for mean reversion. But, if we are wrong and high margins manage to endure for the next few years (particularly when global demand growth is below trend), there are broader questions to be asked about the efficacy of capitalism.”

In other words, profit margins should naturally mean-revert and oscillate. The existence of fat margins should encourage new competitors and pricing cycles that cause those margins to erode; conversely, at the bottom of the cycle, low margins should lead to weaker players exiting the business and giving stronger companies more breathing space. If that cycle doesn’t continue, something strange is taking place.

Needless to say, it’s not every day you see a major investment bank say it might have to start asking broader questions about capitalism itself.

Source: http://bloom.bg/1nJAS0j

Facebook bans private guns sales.

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Facebook bans private guns sales.

Facebook is banning private guns sales on the social media site in response to pressure from President Barack Obama for stricter firearms control.

The prohibition, announced on Friday, will also apply to Instagram, its photo-sharing network, and will stop the networks being used to conduct gun sales between private individuals.

The new rule comes after President Obama bypassed the United States congress by introducing a series of executive orders bringing in tougher background checks for gun ownership in response to a series of deadly mass shootings during his presidency.

The changes announced by Mr Obama in a tearful speech at the White House included requirements for checks for those purchasing weapons at gun shows or on the internet.

The White House, state attorneys general and pro-gun control groups have raised the pressure on Facebook to stop the flow of posts offering weapons for sale.

“Over the last two years, more and more people have been using Facebook to discover products and to buy and sell things to one another,” said Monika Bickert, Facebook’s head of product policy. “We are continuing to develop, test and launch new products to make this experience even better for people and are updating our regulated goods policies to reflect this evolution.”

The ban would apply only to posts relating to “peer-to-peer” sales, not to those taking place in stores or from licensed on-line dealers. “Licensed firearm retailers will still be able to post about their goods and services on Facebook while completing sales transactions off Facebook,” Ms Bickert said.

Facebook, with 1.59 billion monthly users, acted in 2014 to limit gun sales by shielding minors from firearms adverts on its site.

The network already bans sales of pharmaceuticals, marijuana and other illicit drugs.

Source: http://bit.ly/23GNB4V

BREAKING NEWS: World Health Organization Declares Zika virus a Public Health Emergency.

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BREAKING NEWS: World Health Organization Declares Zika virus a Public Health Emergency.

The spread of Zika virus across the Americas is a public health emergency of international concern and deserves urgent attention, the World Health Organization said Monday.

“I am now declaring that a recent cluster of microcephaly and other neurological abnormalities reported in Latin America following a similar cluster in French Polynesia in 2014 constitute a public health emergency of international concern,” WHO director general Dr. Margaret Chan told a news conference.

WHO said last week that Zika was spreading “explosively” across the Americas and predicted 3-4 million people could be infected within a year.

It would not have been of concern -Zika normally causes only mild symptoms at worst – but Brazil noted a marked increase in cases of a severe and devastating birth defect called microcephaly that coincided with Zika’s arrival. Some doctors also fear the virus may cause a paralyzing condition called Guillan Barre syndrome.

Image: Brazil Baby Measured
Dr. Vanessa Van Der Linden, the neuro-pediatrician who first recognized and alerted authorities over the microcephaly crisis in Brazil, measures the head of a 2-month-old baby with microcephaly in Recife, Brazil, on Jan. 27. The baby’s mother was diagnosed with having the Zika virus during her pregnancy. The ailment results in an abnormally small head in newborns and is associated with various disorders including decreased brain development. Mario Tama / Getty Images

Some health experts have accused WHO of acting too slowly and the organization’s been under pressure to move more quickly against Zika.

Chan said travel or trade restrictions are not called for at this time. The most important measures will be to protect people from the mosquitoes whose bites transmit the virus.

She made the decision after a meeting of WHO’s 18-member emergency committee.

The spread of Zika alone would not be an emergency, said Dr. David Heymann, Chair of WHO’s emergency committee. “Zika as we understand today is not a clinically significant infection,” Heymann said. “It’s only because of this association, if it is proven, that Zika could be considered as a public health emergency of international concern. That’s why it was a very difficult deliberation.”

WHO makes clear that it is not certain that Zika causes microcephaly and says a lot more work needs to be done to show it. However, that work needs to be done quickly.

“The evidence is growing and it is getting strong,” Chan said.

“If we do not do all this work now and wait until the scientific evidence comes out, people will ask why we did not take action?” Chan added.

“I don’t think people are concerned about raising false concern. I think they are concerned about getting to the bottom of what’s causing microcephaly,” Heymann said.

Related: How Worried Should You be About Zika?

There is not a whole lot WHO can do. The organization doesn’t have a lot of cash to pour into research or immediate medical care. But the largely bureaucratic declaration can encourage countries to donate money, to coordinate efforts and, of course, it raises the profile of a disease outbreak.

The idea of a public health emergency of international concern has only existed since 2007. WHO has declared the emergencies for the H1N1 swine flu pandemic in 2009; for a resurgence in polio and for the Ebola epidemic in West Africa.

WHO has declined to call the spread of the Middle East Respiratory Syndrome (MERS) a public health emergency of international concern.

Source: http://nbcnews.to/1Sys8FU