It's becoming unavoidably obvious that the current global order is unraveling. Add investor fears that we've ignored warning signs of slower growth, particularly in Europe, and that the easy-money days of quantitative easing may finally be coming to an end, and it didn't take much to send equity markets plunging last month. ... A distracted, war-weary America is no longer willing and able to provide global leadership, and no other country is stepping up to take its place. The U.S.'s international disengagement and seemingly improvised foreign policy are leaving allies, distracted by their own problems, looking to hedge their bets. Meanwhile, developing countries have become powerful enough to block U.S.-led plans but are not yet coordinated, motivated or influential enough to offer alternatives. Fast-changing China, revisionist Russia and a host of emerging markets with competing priorities and different political and economic systems leave us with too many major powers with too many divergent interests. The result is a global power vacuum - and markets are afraid of what might come next. ... We've now reached a crossroads where the outcomes of four combustible geopolitical crises could begin to reshape the global economy. Two of these crises are already reaching a critical point. The conflict between Russia and the west will rage in and around Ukraine, on Russia's borders with other neighbors, in energy markets, in financial markets, in the defense budgets of countries on both sides, in cyberspace - and anywhere else Moscow may try to undermine what remains of American global leadership. ... In the Middle East the battle with ISIS has just begun. ... Two other crises, not yet dominating headlines, are very much in play. Chinese leader Xi Jinping has his hands full with transformational economic reforms that will reshape the Chinese market and his country's global standing. But as its economic agenda comes under pressure, Beijing will look to deflect frustration and attention onto foreign companies, neighborhood adversaries or Washington. ... Second, new fissures in the U.S.-Europe alliance are taking shape. Divisions among European countries as well as global challenges that disproportionately threaten Europe are widening a structural divide between Europe and America.

Over the past 15 years, the global economy has operated under two different growth models. Between 1999 and 2007, the growth model operated through ever larger trade imbalances between emerging market and commodity exporting countries – who ran larger and larger surpluses – and a group of rich countries – first and foremost the U.S. – who ran larger and larger trade deficits. Global imbalances were then seen as a problem by some, but they were really a symptom of the global geographic distribution of aggregate supply and demand, with excess supply in the high-saving emerging market countries and excess demand in some low-saving rich countries (and with energy exporting countries doing quite well as they exported to both). These supply-demand and saving-investment imbalances generated huge international capital flows that were sufficient to bring global demand into line with abundant global supply of goods at something approximating the full employment of global resources. ... That growth model obviously broke down in the global financial crisis years of 2007–2009 as global imbalances shrunk in line with global aggregate demand. From 2009–2014, the global economy has operated under stimulus from “nontraditional” monetary policies that pushed policy rates to zero and ballooned central bank balance sheets through massive “chunks” of quantitative easing. Also, the global policymakers “went Keynesian” for a couple of years during and following the crisis by delivering a large dose of fiscal stimulus. The good news is that, as a result, the global economy avoided depression and deflation. But that’s all they did or could reasonably do. The reality is that now, five years after the global financial crisis, average growth in the global economy is modest and the level of global GDP remains below potential. The global economy has not as of today found a growth model that can generate and distribute global aggregate demand sufficient to absorb bountiful global aggregate supply. Unless and until it does, we will be operating in a multi-speed world with countries converging to historically modest trend rates of potential growth with low inflation. 0% neutral real policy rates for many developed and some developing countries will likely be the investment outcome.

And predicts the rise and fall of nations. ... Sometimes art imitates life; some games do so as well. In the case of chess especially, the parallels with power politics are many and uncanny, persisting over the centuries. Originating on the Asian subcontinent, chess moved to Persia ("checkmate" comes from shah mat, "the king is dead") but really began to diffuse widely during the great age of Arab conquest, starting in the 7th century of the Common Era. The structure and rules of the game remained consistent for centuries within Muslim domains, but in Christian countries to which chess spread, innovations emerged.

Ayungin Shoal lies 105 nautical miles from the Philippines. There’s little to commend the spot, apart from its plentiful fish and safe harbor — except that Ayungin sits at the southwestern edge of an area called Reed Bank, which is rumored to contain vast reserves of oil and natural gas. And also that it is home to a World War II-era ship called the Sierra Madre, which the Philippine government ran aground on the reef in 1999 and has since maintained as a kind of post-apocalyptic military garrison, the small detachment of Filipino troops stationed there struggling to survive extreme mental and physical desolation. Of all places, the scorched shell of the Sierra Madre has become an unlikely battleground in a geopolitical struggle that will shape the future of the South China Sea and, to some extent, the rest of the world. … It was hard to imagine how such a forsaken place could become a flash point in a geopolitical power struggle. … To understand how Ayungin (known to the Western world as Second Thomas Shoal) could become contested ground is to confront, in miniature, both the rise of China and the potential future of U.S. foreign policy. It is also to enter into a morass of competing historical, territorial and even moral claims in an area where defining what is true or fair may be no easier than it has proved to be in the Middle East. … The Spratly Islands sprawl over roughly 160,000 square miles in the waters of the coasts of the Philippines, Malaysia, Brunei, Taiwan and China — all of whom claim part of the islands. Since the 18th century, navigators have referred to the Spratlys as “Dangerous Ground” — a term that captures not only the treacherous nature of the area but also the mess that is the current political situation in the South China Sea. … Why the fuss over “Dangerous Ground”? Natural resources are a big piece of it. According to current U.S. estimates, the seabed beneath the Spratlys may hold up to 5.4 billion barrels of oil and 55.1 trillion cubic feet of natural gas. On top of which, about half of the world’s merchant fleet tonnage and nearly one third of its crude oil pass through these waters each year. They also contain some of the richest fisheries in the world. … What China has done with Mischief, Scarborough and now with Ayungin is what the journalist Robert Haddick described, writing in Foreign Policy, as “salami slicing” or “the slow accumulation of actions, none of which is a casus belli, but which add up over time to a major strategic change.”

Far from the nuclear negotiations, a new tech-savvy Iranian generation takes shape. ... I asked one woman how she best prepares for the rigor of building a company. “By doing!” she smirks at me. She pauses, and adds, “Oh, and I read all the top Silicon Valley blogs and take a few classes from Stanford, Wharton and other colleges around the world for free on Coursera.” Several at the lunch put down their forks and show me their smart phones, each open on Wifi to courses like “Introduction to Marketing, “International Leadership and Organizational Behavior” and “Better Leader, Richer Life.” ... Politics, power, mistrust: This is one version of how the media frames discussion of Iran. It’s very real, and it has much caution and evidence to support it. ... But there’s another tale, one I saw repeatedly in my trip there last month. It was my second visit within the year, traveling with a group of senior global business executives to explore this remarkable and controversial nation. ... This tale focuses on Iran’s next generation, an entirely new generation that came of age well after the Islamic Revolution, and on human capital, the greatest asset a country can have. It’s about technology as the driver for breaking down barriers even despite internal controls and external sanctions. People under age 35 represent nearly two-thirds of Iran’s population at this point: Many were engaged in the Green Movement protests against the Iranian presidential election in 2009. Most are utterly wired and see the world outside of Iran every day—often in the form of global news, TV shows, movies, music, blogs, and startups—on their mobile phones.

A charismatic showman with a penchant for provocative bombast, the motorcycle club's leader is perhaps Russia's most recognizable nationalist star. Over the past decade, he has transformed a once-underground biker gang into a self-styled vanguard of patriotic holy warriors, reportedly 5,000 strong, with close ties to the Kremlin. In the Russian media, he can regularly be heard trumpeting the country's greatness while warning that its enemies — America, Europe, homosexuals, liberals, traitorous "fifth columnists" — intend to undermine Mother Russia. He and the other Night Wolves often hold motorcycle rallies to promote Russian patriotism and Orthodox Christianity, making rumbling pilgrimages to churches and holy sites. He has vowed to defend the Kremlin from Maidan-inspired protesters and has pledged to die for Vladimir Putin, the country's president. He has famously declared that "wherever the Night Wolves are, that should be considered Russia." Recently, the club held a three-day anti-NATO rally in Slovakia. Lately, the Surgeon has taken to praising Stalin. ... The Surgeon and his Night Wolves have flourished in this nationalist ecosystem. The club has reportedly received more than $1 million in grants from the Kremlin to support patriotic performances like the Sevastopol bike show. On several occasions, Putin himself has famously mounted a three-wheel Harley and ridden alongside the Surgeon. In 2013, Putin awarded the Night Wolves' leader an Order of Honor for his "patriotic education of youth." In June, the Russian press announced a cosmonaut would carry the club's flag into space. ... the Surgeon tells me the dissolution of the U.S.S.R. had left him deeply embittered. "All the values were lost, everybody started kicking their history, spitting on their own granddads," he says. "All these pretenders I always hated — they painted themselves so quickly from Communists to capitalists." His disillusionment, he explains, led to a time of desert wandering, a search for answers. Eventually he identified those responsible: proponents of democracy, liberalism, Wall Street.

The divergent tales of Syria and Lebanon demonstrate that the best early warning signs of instability are found not in historical data but in underlying structural properties. Past experience can be extremely effective when it comes to detecting risks of cancer, crime, and earthquakes. But it is a bad bellwether of complex political and economic events, particularly so-called tail risks—events, such as coups and financial crises, that are highly unlikely but enormously consequential. For those, the evidence of risk comes too late to do anything about it, and a more sophisticated approach is required.
 ... Thus, instead of trying in vain to predict such “Black Swan” events, it’s much more fruitful to focus on how systems can handle disorder—in other words, to study how fragile they are. Although one cannot predict what events will befall a country, one can predict how events will affect a country. Some political systems can sustain an extraordinary amount of stress, while others fall apart at the onset of the slightest trouble. The good news is that it’s possible to tell which are which by relying on the theory of fragility. 
... The first marker of a fragile state is a concentrated decision-making system. On its face, centralization seems to make governments more efficient and thus more stable. But that stability is an illusion. Apart from in the military—the only sector that needs to be unified into a single structure—centralization contributes to fragility. ... The second soft spot is the absence of economic diversity. Economic concentration can be even more harmful than political centralization. Economists since David Ricardo have touted the gains in efficiency to be had if countries specialize in the sectors in which they hold a comparative advantage. But specialization makes a state more vulnerable in the face of random events.
 ... The third source of fragility is also economic in nature: being highly indebted and highly leveraged. Debt is perhaps the single most critical source of fragility. It makes an entity more sensitive to shortfalls in revenue, and all the more so as those shortfalls accelerate. ... The fourth source of fragility is a lack of political variability. Contrary to conventional wisdom, genuinely stable countries experience moderate political changes, continually switching governments and reversing their political orientations. ... The fifth marker of fragility takes the proposition that there is no stability without volatility a step further: it is the lack of a record of surviving big shocks. States that have experienced a worst-case scenario in the recent past (say, around the previous two decades) and recovered from it are likely to be more stable than those that haven’t.

How an experimental unit transformed the intelligence community. ... Tenet decided to form a group of contrarian thinkers to challenge conventional wisdom in the intelligence community and mitigate the threat of additional surprises through “alternative analysis.” On that evening, his instructions were simple: “Tell me things others don’t and make [senior officials] feel uncomfortable.” ... It is devoted to “alternative analysis,” which includes techniques like “what ifs,” Team A/Team B exercises, and premortem analysis, all of which are used to identify holes in a plan, model an adversary to understand their weaknesses, or consider all of the conceivable ways a plan can fail beforehand. ... “Given that our mandate is ‘to provoke thought,’ the scope of our readership is a useful metric. In the past couple of years, we have watched Red Cell readership in our online publications grow significantly. Red Cell products have led to vigorous virtual discussions among readers within the [intelligence community]. In addition, we receive a good number of requests for Red Cell products from a diverse set of senior policymakers, suggesting that Red Cell products spark interest and are useful.”

How did a 1972 exhibition basketball game between Russia and Uganda become a crucible for Cold War tensions at the dawn of Idi Amin’s brutal regime? Ask the former CIA agent who tried to hit the Soviets where it would hurt them the most: on the court. ... In 1972, in the middle of the Cold War, the Soviet military sent a team of all-stars to Kampala to compete in three goodwill basketball games against Uganda’s top players. The Soviets, who were hoping to curry favor with the leader of the new regime, Idi Amin, didn’t know that the best of the three squads, the Ugandan national team, was at that time being coached by an American named Jay Mullen. And they definitely didn’t know that Mullen was an undercover CIA operative, sent to Uganda earlier that year to spy on the Soviets. ... The space race was winding down, but the nuclear arms race was accelerating at a perilous rate despite talks of limitations. U.S.-backed coups were happening all over the world. Courting and deposing regional leaders was a global game being played by dangerous men. ... His 46-year-old son, Tobey, told me that Mullen often speaks without words, pointing at things he wants. I witnessed as much, but I also saw him initiate conversations with strangers like it was nothing, breaking the ice with at least three different people by asking if they had Nordic ancestry. At dinner one night, without warning, he broke into the New Zealand national anthem, not the last anthem he would sing during my visit. The guy can listen, schmooze, or entertain as needed. ... He would be posing as a researcher on African history; there were plenty of other Americans and Brits at Makerere University among whom Mullen could blend in. But his real job would be to get to know the Kampala-based Soviets.

A new arms race in our skies threatens the satellites that control everything from security to communications ... the activities of the mystery “ghost” satellite have given many in the defence and intelligence community pause for thought. ... Space, military officials like to say, is the ultimate higher ground. Since the cold war ended, however, it has been a largely uncontested territory. In January 1967, the US, UK and USSR became the first signatories to the Outer Space Treaty. In it, they committed to keeping the moon free of military testing and not putting weapons of mass destruction into orbit. China joined the pact in 1984. Another 100 states are now signed up. ... Almost every country with strategically important satellite constellations and its own launch facilities is considering how to defend — and weaponise — their extraterrestrial assets. ... Satellites are fragile things: a nudge to their orbit, a tilt of their solar panels towards the sun, a laser blast directed at their sensors or a projectile casually fired into their path are all capable of wreaking permanent, irreversible damage. ... While developed societies are becoming more dependent on it than ever before for almost every aspect of their digital economies, their grip on the technologies that have given them global strategic dominance is slipping. And as more countries around the world look to maximise their military advantages, space is becoming the most obvious domain to contest. ... The 1967 Outer Space Treaty had one glaring omission: it has no limits on the use of conventional weapons. Even as militaries around the world work hard to build their space weaponry arsenals, many are now wondering whether the treaty needs to be broadened.

1. The Hollow Alliance: The trans-Atlantic partnership has been the world’s most important alliance for nearly seventy years, but it’s now weaker, and less relevant, than at any point in decades. It no longer plays a decisive role in addressing any of Europe’s top priorities. Russia’s intervention in Ukraine and the conflict in Syria will expose US-European divisions. As US and European paths diverge, there will be no more international fireman—and conflicts particularly in the Middle East will be left to rage.
2. Closed Europe: In 2016, divisions in Europe will reach a critical point as a core conflict emerges between Open Europe and Closed Europe—and a combination of inequality, refugees, terrorism, and grassroots political pressures pose an unprecedented challenge to the principles on which the new Europe was founded. Europe’s open borders will face particular pressure. The risk of Brexit is underestimated. Europe’s economics will hold together in 2016, but its broader meaning and its social fabric will not.
3. The China Footprint: Never has a country at China’s modest level of economic and political development produced such a powerful global footprint. China is the only country of scale today with a global economic strategy. The recognition in 2016 that China is both the most important and most uncertain driver of a series of global outcomes will increasingly unnerve other international players who aren’t ready for it, don’t understand or agree with Chinese priorities, and won’t know how to respond to it.
4. ISIS and “Friends”: ISIS is the world’s most powerful terrorist organization, it has attracted followers and imitators from Nigeria to the Philippines, and the international response to its rise is inadequate, misdirected, and at cross purposes. For 2016, this problem will prove unfixable, and ISIS (and other terrorist organizations) will take advantage of that. The most vulnerable states will remain those with explicit reasons for ISIS to target them (France, Russia, Turkey, Saudi Arabia, and the United States), and those with the largest numbers of unintegrated Sunni Muslims (Iraq, Lebanon, Jordan, Egypt, and across Europe).
5. Saudi Arabia: The Saudi Kingdom faces a growing risk of destabilizing discord within the royal family this year, and its increasingly isolated status will lead it to act more aggressively across the Middle East this year. The threat of intra-royal family strife is on the rise, and a scenario of open conflict, unimaginable prior to King Salman’s January 2015 ascension, has now become entirely realistic. The key source of external Saudi anxiety is Iran, soon to be free of sanctions.
6. The rise of technologists: A variety of highly influential non-state actors from the world of technology are entering the realm of politics with unprecedented assertiveness. These newly politically ambitious technologists are numerous and diverse, with profiles ranging from Silicon Valley corporations to hacker groups and retired tech philanthropists. The political rise of these actors will generate pushback from governments and citizens, generating both policy and market volatility.
7. Unpredictable Leaders: An unusually wide constellation of leaders known for their erratic behavior will make international politics exceptionally volatile this year. Russia’s Vladimir Putin and Turkey’s Recep Tayyip Erdogan are leaders of an unruly pack that includes Saudi Arabia’s Deputy Crown Prince Mohammed bin Salman and – to a lesser but important extent – Ukraine’s Petro Poroshenko. These unpredictable leaders make our list for 2016 because their interventions overlap and conflict. One powerful, erratic leader spells trouble; four spell volatility with major international implications.
8. Brazil: President Dilma Rousseff is fighting for her political survival, and the country’s political and economic crisis is set to worsen in 2016. Contrary to hopes among pundits and many market players, the battle over Rousseff’s impeachment is unlikely to end the current political stalemate. Should the president survive, her government won’t gain the political boost necessary to move on the economic reforms needed to tackle the country’s growing fiscal deficit. If Rousseff is ousted, an administration led by Vice President Michel Temer won’t fare much better.
9. Not enough elections: Emerging markets underwent a historic cycle of national elections in 2014-2015, but this year there are relatively few opportunities for EM voters to make themselves heard at the ballot box. As slower growth and stagnating living standards stoke popular discontent, governance and stability will suffer. Historically, markets have been less volatile in non-election years, but this time will be different. By raising popular expectations, the massive income growth that most EMs enjoyed over the past 10 years has created conditions for a rude awakening.
10. Turkey: After a decisive victory for his AK party in late-2015, President Erdogan will now push to replace the country’s parliamentary system with a presidential one. He’s unlikely to reach his goal in 2016, but his aggressive electioneering will further damage an already battered Turkish business and investment climate. On the security front, there is little prospect of an imminent end to PKK violence, and unrelenting US pressure on Ankara to clamp down on the Islamic State will produce only modest results while making Turkey more vulnerable to new attacks by ISIS.
* Red Herrings: US voters aren't going to elect a president who will close the country to Muslims. China’s economy isn’t headed for a hard landing, and its politics will remain stable. Continued strong leadership from Japan's Shinzo Abe, India's Narendra Modi, and especially China's Xi Jinping will keep Asia's three most important players focused on economic reform and longer-term strategy, reducing the risk of conflict in Asia’s geopolitics.

Fourteen years later, the drone is the quintessential weapon of the American military, which now boasts roughly a thousand Predator pilots. At any given moment, scores of them sit in darkened trailers around the country, staring at the bright infrared camera feeds from drones that might be flying over Afghanistan, Iraq, Syria, Pakistan, or Somalia. Between August 2014 and August 2015, a single Predator squadron—the 432nd Air Expeditionary Wing in Nevada—flew 4,300 sorties and dropped 1,000 warheads on ISIS targets. By enabling the White House to intervene without committing troops to battle, the drone has transformed US foreign policy. ... The Predator as we know it—with its capacity to be piloted from thousands of miles away and its complement of Hellfire missiles—wasn’t developed with the expectation that entire wars might one day be fought by pilots sitting in trailers. As a matter of fact, most military planners at the time regarded the Predator as pretty much a technological dead end. ... The lethal Predator wasn’t a production vehicle. It was a hot rod, built for one all-out race against the clock. Of course, in those months before September 11, 2001, none of its designers knew the nature of the clock they were racing against. And most Americans have no idea quite how close they came to beating it.

Early last year, General Khalifa Haftar left his home in northern Virginia—where he had spent most of the previous two decades, at least some of that time working with the Central Intelligence Agency—and returned to Tripoli to fight his latest war for control of Libya. Haftar, who is a mild-looking man in his early seventies, has fought with and against nearly every significant faction in the country’s conflicts, leading to a reputation for unrivalled military experience and for a highly flexible sense of personal allegiance. In the Green Mountains, the country’s traditional hideout for rebels and insurgents, he established a military headquarters, inside an old airbase surrounded by red-earth farmland and groves of hazelnut and olive trees. Haftar’s force, which he calls the Libyan National Army, has taken much of the eastern half of the country, in an offensive known as Operation Dignity. Most of the remainder, including the capital city of Tripoli, is held by Libya Dawn, a loose coalition of militias, many of them working in a tactical alliance with Islamist extremists. Much as General Abdel Fattah el-Sisi has boasted of doing in Egypt, General Haftar proposes to destroy the Islamist forces and bring peace and stability—enforced by his own army. ... Haftar is a top-priority assassination target for Libya Dawn’s militias. Last June, a suicide bomber exploded a Jeep outside his home near Benghazi, killing four guards but missing the primary target. Now there is heavy security around Haftar at all times. At his base, soldiers frisk visitors and confiscate weapons. A few months ago, someone reportedly attempted to kill him with an explosive device concealed in a phone, and so his men collect phones, too.

Two centuries ago, public armies replaced private ones as the dominant tool of warfare. Now, private armies are back ... It is a familiar story. A superpower goes to war and faces a stronger-than-expected insurgency in distant lands, yet has insufficient forces to counter it because of political and military constraints. The superpower decides to hire contractors, some of whom are armed, to support its war effort. The armed contractors prove to be both a blessing and a curse, providing vital security services to the campaign, yet at times killing innocent civilians, causing strategic setbacks, and damaging the superpower’s legitimacy. Without these contractors, the superpower could not wage the war. With them, it is more difficult to win. ... The armed contractors in question are not in Iraq or Afghanistan but in northern Italy, and the year is not 2007 but 1377. The superpower is not the United States but the papacy under Pope Gregory XI, fighting the antipapal league led by the duchy of Milan. The tragic killing of civilians by armed contractors did not occur in Baghdad but in Cesena, 630 years earlier. The military companies employed were not DynCorp International, Triple Canopy or Blackwater, but the Company of the Star, the Company of the Hat and the White Company. Known as free companies, these for-profit warriors were organised as corporations, with a well-articulated hierarchy of subcommanders and administrative machinery that oversaw the fair distribution of loot according to employees’ contracts. CEO-like captains led these medieval military corporations. ... The United Arab Emirates (UAE) has hired hundreds of Latin-American mercenaries to fight the Iranian-backed Houthis in Yemen. After years of struggling against Boko Haram, Nigeria finally employed mercenaries to do the job, and they did. Russia’s President Vladimir Putin has sent mercs to ‘liberate’ eastern Ukraine, a conflict that still simmers. Mercs are reportedly working in parts of Iraq. ... ‘durable disorder’: global governance that contains rather than solves problems. Such a world is already upon us.

Some aches and pains are constraining the global economy, with more severe strains occurring in the emerging world. We believe contagion to the US and Europe will be limited in 2016, and expect their consumer revivals to continue, courtesy of low inflation, low commodity prices, central bank intervention and reduced fiscal austerity. However, above-average equity valuations, peaking corporate earnings momentum and stagnant productivity growth will likely result in a year of modest single- digit returns on diversified portfolios. ... This year’s cover art transforms some well-known aches and pains: exhaustion, tinnitus, periodontitis, bronchitis, acid reflux, hangovers, restless leg syndrome, appendicitis, conjunctivitis, anemia, mononucleosis, E. coli infections, iron deficiency, narcolepsy, macular degeneration and altitude sickness. These aggravating but generally not life- threatening conditions are meant to convey a slow growth world, but not one on the precipice of collapse or recession. Competitive devaluations are unlikely to alleviate these aches and pains; successive rounds of currency depreciation in Europe and Asia mostly redistribute income across countries, rather than boost aggregate demand. ... Most of these conditions are homegrown: Latin American and Australian overexposure to commodity prices, weak consumer activity in Japan, economic dissonance across countries in the Eurozone, a surge in dollar-borrowing emerging economies and slowing corporate profits growth in the US. However, some conditions are the result of contagion: “ECBotulism” refers to the impact of ECB policy on countries like Sweden that are forced to engage in destabilizing quantitative easing, or lose export market share (see page 15 for more details). As for Canada, there was no need to transform the name of an illness for our cover: “Dutch Disease” refers to an economic condition in which one sector of the economy (in this case, oil and gas) drives the currency to such a high level that it causes medium-term damage to the rest of the country’s export sectors.

As global warming thaws the Arctic, Russia is leading the rush to exploit the region’s resources. In late 2013, on a platform in the Pechora Sea, Gazprom became the first company to produce oil offshore in the Arctic, after jailing 30 Greenpeace protesters and confiscating their ship. On the east side of Yamal a partnership led by another Russian company, Novatek, is building a giant terminal to liquefy gas and export it to East Asia and Europe by ice-breaking tanker—though over time there may be less and less ice to break. ... Russia is not alone. More than a fifth of the world’s conventional oil and gas that has yet to be discovered lies above the Arctic Circle, according to a 2008 estimate by the U.S. Geological Survey, and the region is rich in other minerals too. ... Given the hype on both sides of the argument, what’s striking is how patchy the Arctic rush actually is. Few companies have dipped their toes into Arctic waters, and fewer still are making a profit. Last fall Royal Dutch Shell abruptly abandoned its multiyear, seven-billion-dollar effort to extract oil from the Chukchi Sea off Alaska after drilling a single unpromising hole. Record-low oil prices likely contributed to the decision. So did the astronomical costs of operating in a region where infrastructure is sparse, distances are huge, and the weather remains horrific.

Successful empires and kingdoms are good at building infrastructure and sharpening the best ideas. The inscription along the magnificent colonnade above the James A Farley building in central Manhattan, the largest post office in the United States, reads: ‘Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds.’ Herodotus wrote the words 2,500 years ago, to describe the ancient Persians – who were always on the lookout for innovative technologies and ideas that made it easier to administer their great empire. Getting messages quickly and reliably from A to B in the ancient world was no less important than it is today. ... The instant communications made possible by recent technological changes should not make us susceptible to the breathless commentary about globalisation as something new. For more than two millennia, news and information, goods and products, ideas and beliefs have flowed through networks linking the Pacific coast of China with the Atlantic coasts of North Africa and Europe, the Indian Ocean and the Persian Gulf with the Mediterranean and Scandinavia. Since the late 19th century, these networks have been known as the Silk Roads. ... We are witnessing the world’s centre of gravity return to the axis on which it spun for millennia. When viewed from the vantage point of the Silk Roads, the familiar narrative begins to quiver, history itself begins to shift. In fact, to understand the world, the best place to look is not in the centre of the West nor in the heart of the East, but on the old Silk Road where the two come together. ... Most scholars have neglected these networks for three reasons. First, they challenge the familiar, triumphalist story of the rise of the West. Second, historians today work in crowded and competitive fields requiring increasingly narrow and precise specialisations. ... Finally, there’s the simple fact that Western scholars’ ability to follow historical connections can be limited by the lack of knowledge of central Asian languages.

Thomas Kelly, the American ambassador here, likes to say that Djibouti today feels like what Casablanca must have felt like in 1940. “All the different nationalities elbowing into each other,” he says. “All the intrigue.” ... About 4,000 soldiers and contractors live here, and they include commandos from Joint Special Operations Command, the team that undertakes the military’s most sensitive counterterrorism operations. After the 2012 attack on the diplomatic mission in Benghazi, Libya, a 150-member rapid response team was established at Camp Lemonnier, assigned to handle future threats to diplomatic personnel abroad. Djibouti is also the U.S. military’s regional hub for drones, and it sends thousands of Predators and Reapers across the region each year.

The goal: neutralize crude oil as an economic weapon and find a way to persuade a hostile kingdom to finance America’s widening deficit with its newfound petrodollar wealth. And according to Parsky, Nixon made clear there was simply no coming back empty-handed. Failure would not only jeopardize America’s financial health but could also give the Soviet Union an opening to make further inroads into the Arab world. ... The basic framework was strikingly simple. The U.S. would buy oil from Saudi Arabia and provide the kingdom military aid and equipment. In return, the Saudis would plow billions of their petrodollar revenue back into Treasuries and finance America’s spending. ... The current tally represents just 20 percent of its $587 billion of foreign reserves, well below the two-thirds that central banks typically keep in dollar assets. Some analysts speculate the kingdom may be masking its U.S. debt holdings by accumulating Treasuries through offshore financial centers, which show up in the data of other countries. ... While oil’s collapse has deepened concern that Saudi Arabia will need to liquidate its Treasuries to raise cash, a more troubling worry has also emerged: the specter of the kingdom using its outsize position in the world’s most important debt market as a political weapon, much as it did with oil in the 1970s.

Finance may be the most powerful weapon of war. It moves armadas, armies, and squadrons. It funds troops and artillery. It endows suicide bombs and improvised explosive devices. It pays for special forces and mercenaries. It underwrites cease-fires and purchases surrenders. Finance is the weapon that makes all other weapons of war possible. ... This Article is about the financial weapons of war, their growing importance in national affairs, and their wide-ranging effects on law, finance, and society. This Article offers an early, broad examination of the realities of modern financial warfare. This Article descriptively and normatively explores the new financial theater of war, analyzes the modern arsenal of financial weapons, highlights emerging legal and policy concerns, and proposes key recommendations for current and future financial warfare. ... While policymakers, analysts, and scholars have long been studying the respective, evolving fields of modern finance and modern warfare, there has been surprisingly little meaningful legal scholarship on the crosscutting realities of modern financial warfare. Drawing on a rich legal literature that spans the laws of war, finance, and cyberspace, this Article seeks to fill this understudied, underappreciated—yet critically important—legal intersection of war and finance. ... Part I provides a general layout of the modern financial theater of war. It describes the modern financial infrastructure as a globalized, high-tech, American-centric system. ... Part II highlights particular armaments of financial warfare. Rather than provide an exhaustive catalog of financial weapons, it offers a broad inventory of the financial weapons of war. It classifies the financial weapons of war as analog weapons and cyber weapons. ... Part III contends with new concerns. It asserts that the financial weapons of war present critical challenges for traditional laws and norms relating to financial hostilities, cyberattacks, and non-state actors. ... Part IV offers new pathways. It proposes three pragmatic policy recommendations that should be undertaken in the near term response to modern financial warfare while larger issues remain unresolved by global policymakers.

All we know at this point in time is that Brexit will (probably) happen at some point over the next 2-3 years, but we still have no idea what the actual implications will be. ... In that context I note that it has taken Canada ten years to negotiate their free trade agreement with the EU, and that was prioritised by the EU negotiators. The EU have already declared that the UK will not be prioritised. On top of that, the UK will now have to negotiate trade agreements with pretty much every country around the world that it does business with – a monumental task, and the legal resources to do that job do not exist, according to a government official. ... As events unfolded, it would probably be fair to say that the vote wasn’t really about what it was supposed to be about; that got lost along the way. No, it turned into a referendum for or against immigration and a protest vote against Brussels and London. The amount of bitterness in large parts of the country – and in particular in the North – is such that many saw the referendum as an opportunity to give Brussels and London (or at least the elite in those cities) a slap in the face. ... Now, a couple of weeks after the referendum, we are admittedly in a bit of a dilemma – almost akin to a prisoner’s dilemma. The more financial markets puke over the next few months, the more likely lawmakers on both sides are to forget past disagreements and insults, and work on a solution that would keep the UK in the EU. On the other hand, if financial markets get a whiff of something about to happen - a possible compromise solution – financial markets will perform better, and thus make it less likely to happen.

All we know at this point in time is that Brexit will (probably) happen at some point over the next 2-3 years, but we still have no idea what the actual implications will be. It all depends on the forthcoming negotiations between the UK and the EU (and the rest of the world), and David Cameron and Boris Johnson probably both did the wise thing and chickened out, because that isn’t going to be much fun. ... In that context I note that it has taken Canada ten years to negotiate their free trade agreement with the EU, and that was prioritised by the EU negotiators. The EU have already declared that the UK will not be prioritised. On top of that, the UK will now have to negotiate trade agreements with pretty much every country around the world that it does business with – a monumental task, and the legal resources to do that job do not exist, according to a government official. ... As events unfolded, it would probably be fair to say that the vote wasn’t really about what it was supposed to be about; that got lost along the way. No, it turned into a referendum for or against immigration and a protest vote against Brussels and London. The amount of bitterness in large parts of the country – and in particular in the North – is such that many saw the referendum as an opportunity to give Brussels and London (or at least the elite in those cities) a slap in the face.

Thursday. My one chance in the week to buy staples—cooking oil, rice, laundry detergent—at state-set prices. All Venezuelan adults are assigned days of the week to shop for regulated goods based on the numbers on our national ID cards. My days are Sundays and Thursdays. Sundays are useless, though. Stores stopped selling regulated goods over the weekend a long time ago. Thursdays are only marginally more useful. For the past several months, the lines at the two supermarkets near my house in eastern Caracas have been so long, stretching out for two blocks, that it’d take hours to get a chance to shop. And then there’s no guarantee I’ll find anything once inside. ... Still, I drive by the supermarkets in the morning to give them a quick look. No chance. They’re so jam-packed, there isn’t even a spot to park. I keep going. My reporting assignment on this day will take me to several parts of the city, so, of course, I’ll be on the prowl for something, anything I can take back to my two kids—an eight-year-old boy and ten-year-old girl—and husband Isaac.

Many in Turkey worry the failed takeover will only hasten the end of independent journalism there. In recent years, Turkish journalists have described a climate far worse than anything they can remember. TV stations critical of the government have been dropped from the state-run satellite broadcaster—one of them, the pro-Kurdish IMC TV, in the middle of a live interview with Dundar and Gul. Foreign journalists have been deported and denied entry to the country, and last fall mobs led by a prominent young politician in Erdogan’s party twice attacked the Istanbul offices of the newspaper Hurriyet. Reporters Without Borders lists Turkey 151st out of 180 countries in its World Press Freedom Index, between Tajikistan and the Democratic Republic of Congo. In June the watchdog group’s Turkey representative was arrested and placed in detention on charges of distributing terrorist propaganda. ... Under a law that criminalizes insulting the nation’s leader, more than 2,000 cases have been opened against journalists, cartoonists, teachers, a former Miss Turkey, and even schoolchildren in the past two years. ... Most of its income comes from newsstand sales: Its circulation hovers around 50,000, and at 1.5 Turkish lira (49¢), it’s slightly more expensive than most papers. That funds operations, ink and paper, and the modest salaries of its staff of 200. ... The paper faces the same problems papers face everywhere, as younger readers get their news from social media and the internet destroys the newspaper business model.

This is the story of the first 15 years of how we have dealt with that newfound fear—how we have confronted, sometimes heroically and sometimes irrationally, the mechanics, the politics, and the psychic challenges of the September 12 era. ... Have we succeeded in toughening up what overnight became known as “homeland security”? Absolutely. But not without a series of extravagant boondoggles along the way. ... Are we safer? Yes, we’re safer from the kind of orchestrated attack that shocked us on that September morning. It’s harder for terrorists to get into the country, and harder for them to pull off something spectacular if they do. But we have not plugged some of the most threatening security gaps. Worse, as the Orlando massacre reminded us, the world has become more populated by those who want to exploit those gaps, including those living among us—and who, in the United States, can easily obtain military-grade weapons. They are not deterred by the prospect of their own death, and they are happy to commit acts less ambitious than those of 9/11. That makes their attacks much harder to detect in advance. Our defenses are far stronger, but what we have to defend against has outpaced our progress. ... Have we adjusted, politically and emotionally, so that we can make rational decisions as a government and as a people to deal with the ongoing threat? Not yet. In a bitterly divided democracy, where attention spans are short and civic engagement is low and the potential for oversimplification and governing-by-headlines is high, that is hardly a surprise.