Here's You Eggnog Snorkel: What You Missed Over the Holidays

While you were celebrating the holidays, we kept track of the last few stories from 2017 that will cast a shadow into this year.


News from one big country that’s not celebrating the New Year (yet)

Well it’s not New Year’s in Iran — Nowruz isn’t for another three months — but thousands of Iranians are on the streets in a dozen cities. These are the largest protests the country has seen since 2009. Social media have been blocked and as of this writing, more than 20 are dead. Here are a few key questions answered:

First, what are they protesting about? The initial demonstrations have focused on economic issues and corruption — unemployment is above 12%, youth unemployment is more than twice that, and food prices recently soared. Most of the economic gains from the opening that resulted from the Iran nuclear deal have gone to the oil sector, leaving ordinary Iranians no better off. As the protests have grown, some participants are taking direct aim at the political system, the clerical establishment, and Iran’s foreign policy.

Second, how do they compare to past protests? In 2009, more than a million people turned out, mainly in the capital, Tehran, to demand a recount after a fraudulent election. Those protests were led by prominent reformist figures within the governing establishment. The current protests, by contrast, are much smaller, more decentralized, and lacking in clear demands — but they are also more spontaneous and widespread throughout the country. One amazing statistic: in 2009 there were 1 million smartphones in Iran — today there are more than 48 million.

Third, who benefits? It remains to be seen whether these protests will helpthe cause of moderates like President Hassan Rouhani, who want to reform the economy further, or hardliners who are skeptical of the Iran deal and keen to point out its economic shortcomings.

Or, a more interesting possibility altogether: could these decentralized, leaderless protests spin beyond the “reformist vs hardliner” parameters of the Iranian political spectrum altogether, and pose a new kind of challenge to the clerics who have run the country for almost four decades?

Kim Jong-un: the olive branch and the nuclear button

North Korean Dear Leader Kim Jong-un’s New Years’ address included an unusual appeal for fresh talks with South Korea. But Kim also warned Washington that the entire US is, he says, within range of his arsenal and that the “nuclear button is still on [his] desk.” Kim may be trying to drive a wedgebetween the US, which has threatened military strikes to stop Kim’s nuclear program — spoiler alert: Kim won’t give up his nukes — and South Korean President Moon Jae-in, who was elected last year in part on his pledge to improve relations with the North.

Italy dissolved its parliament ahead of March election

The move officially opened the campaign season for an election that could be pivotal for Italy and for Europe. If the anti-EU Five Star movement performs well — a distinct possibility — it would raise existential questions for the EU about Italy’s continued commitment to membership. Even if Five Star doesn’t get enough votes to form a government, Italy’s next governing coalition will almost certainly be an unstable and fragmented one.

ISIS killed dozens at a Shia cultural center in Kabul

ISIS has shown resilience in Afghanistan even after Trump dropped the “Mother of All Bombs” and sent more troops there last year. The Islamic State lost its strongholds in Syria and Iraq in 2017, but it’s been methodically setting up shop in other weak, conflict-riddled states like Afghanistan, Yemen, Somalia, and Libya. That will be a big story this year.

Saudi Arabia’s War against Iranian-backed rebels in Yemen reached the 1,000-day mark

The war, a stalemate that has fomented one of the world’s worst humanitarian disasters, is the brainchild of recently-elevated Crown Prince Mohammed bin Salman. As he prepares to take power — potentially this year — Prince Mohammed has to find a way out of a strategic quagmire without looking like he’s caving to Tehran.

Retirement planning interlude: what a way to go out

Perks for Zimbabwe’s ousted former President Robert Mugabe include some two-dozen permanent staff, three new cars every five years, and a newly built eight-bedroom residence or its equivalent in cash, according to a notice issued by the country’s new leader. Call your financial planner right now and make demands.

Democracy is Weah it’s at: a Liberian bright spot

Not long ago we wrote about the challenges to democracy globally, as support for authoritarianism grows. But the clean election of former star footballer George Weah as president of Liberia is a bright spot — it’s the first time the war-ravaged country has seen a peaceful transfer of power since 1944. Now comes the hard part — translating star power into sound governance so that democracy is seen as effective.

Facebook unveiled plans for a new cryptocurrency and payment system on Tuesday. It's called the Libra, and it's not-so-modest goal is to "reinvent money," and "transform the global economy" so that "people everywhere can live better lives." Ambitious much, Zuck?

This is a huge political gamble, but the rewards could be enormous. Here's a quick look at the tradeoffs:

The risks: Facebook is asking its 2.5 billion users — and government regulators — to entrust it with something that's vitally important to people everywhere and a power that governments jealously protect: access to money. And it's doing so at a time when trust in Facebook and other big Silicon Valley companies is at a low ebb.

Whether it's a concern that Big Tech has become too powerful or that it's not doing enough to protect privacy or put a stop to fake news, it's a heck of a time to launch a new techno-utopian project that could give Silicon Valley much more power — including the ability to track not just what people say they like but how they spend their money.

Mark Zuckerberg understands this — the Facebook founder is setting up Libra as a Swiss-based non-profit that will be governed by an "association" of 28 tech and financial companies and non-profits of which Facebook is just one member. He's also promising that Facebook will not mix personal data with payment information, and to cooperate with regulators.

But this will always be Zuckerberg's baby, and by launching Libra, he's painting a big new political bullseye on his own back.

The payoff: If Libra can survive the inevitable political and regulatory storm (and convince its billions of users that they can trust the underlying technology and financial stability of the new cryptocurrency) the upside could be enormous.

How enormous? The Libra website claims that more than 30 percent of the world's population — about 1.7 billion people — currently lack access to traditional bank accounts. Many more pay steep fees to transfer money using traditional payment services. Libra, by contrast, promises access to anyone in the world with a simple smartphone — and to make payments as inexpensive as sending a text message.

Plug those capabilities into a social network whose user base is roughly double the population of the biggest country in the world, and the results could be revolutionary — not just for billions of people who would gain new access to financial resources, but for Facebook's business model, and for central banks and governments that have traditionally sought to control the flow of money through their economies.

That would be a techno-utopian dream come true, but it's a power that governments won't willingly surrender.

If Willis's story on Tuesday about Argentina being plunged into darkness after a nationwide power failure didn't get you packing a flashlight and checking that your car has a full tank of gas, this one should. Over the weekend, the New York Times said anonymous US officials had revealed a US campaign to plant "potentially crippling malware" inside Russia's power grid "at a depth and with an aggressiveness that had never been tried before."

Quick thoughts:

This is a big provocation. It's the cyber equivalent of mining a harbor — an aggressive move that falls short of actual conflict but sends an unmistakable message: mess with us, and we'll mess you up.

The leak was probably intentional. The campaign fits with the new US strategy, launched under the Trump administration, of trying to deter cyber adversaries like Russia, China, and Iran from hacking its critical infrastructure. By disclosing the US campaign, US officials are effectively telling Russia (and by extension China and Iran), that they've got a loaded gun cocked and pointed at their economies.

That's dangerous. People — and governments — may not always behave rationally when a gun is pointed at their heads. Russia might be even more inclined to lash out. And unlike more conventional forms of conflict, cyber isn't a domain where the US can be sure it has an overwhelming advantage if push comes to shove.

It gets worse. The Times said US cyber officials described a "broad hesitation" to go into details of cyber operations against Russia with President Donald Trump because they feared he might cancel it or tell other governments about it. Among other things that are disturbing about this story, a lack of communication between the President and US cyber warriors could send mixed signals that further embolden US adversaries.

It's no secret that cyberattacks are becoming more commonplace. But where do most of them originate and what countries do they target most? The graphic above shows the most significant offenders and victims since 2006. Hackers in China, Russia, Iran, and North Korea account for three-quarters of all major attacks. Nearly a fifth of attacks, meanwhile, have targeted institutions or companies in the United States.

(At least that we know of: this chart highlights known attacks on government agencies, tech companies, and other operations that caused more than $1 million in economic damage. But many cyberattacks are never disclosed, and some countries are more transparent than others, so consider this a cross-section of a much bigger — and more disturbing — picture.)

China's outrage against Swiss bankers – Paul Donovan, an economist at UBS and a former colleague of your Wednesday Signal author, ended up in hot water last week after he wrote that an outbreak of swine fever that had pushed up pork prices in China, "matters if you are a Chinese pig. It matters if you like eating pork in China. It does not really matter to the rest of the world." The Swiss bank put Donovan on leave after a nationalist tabloid picked up the story, unleashing a torrent of invective from angry Chinese citizens, industry groups, and clients. Although we're a bit puzzled at the intensity of the outrage, we're following this story closely. The anger of 1.4 billion people is a powerful thing, and if the US-China standoff over tech and trade continues to escalate, US firms could soon find themselves on the receiving end.

What we are ignoring: Trump on ICE

Trump's Deportation Threats – As Donald Trump revved up his official reelection campaign in Florida on Tuesday, he took to Twitter to vow mass deportations of "millions of illegal aliens" starting next week. We are ignoring this for two reasons: First, it looks more like a campaign trail stunt than a well-thought-out plan — the scale of deportations Trump envisions would require massive logistical coordination, and it's not clear that Immigration and Customs Enforcement (ICE) can deliver it — even if the federal force got help from local police, who may be reluctant to participate in mass arrests in their communities. Second, while this type of rhetoric may play directly to Trump's base, images of crying children torn from their parents will galvanize the president's opponents — and, in particular, the suburban women crucial to his 2016 victory. We're not ignoring the pain and trauma that mass deportations would inflict on immigrant communities if Trump delivers on this threat. We're ignoring a boast that's likely to prove a political bust.