Saudi General Reportedly Tortured To Death After Refusing To Fork Over His Fortune

Rumors that Saudi Crown Prince Mohammad bin Salman has hired mercenaries to torture recalcitrant royals and officials sleeping in the ballroom of the Ritz Carlton in Riyadh have been circulating since shortly after last month’s “corruption crackdown” naked cash grab.

Crown Prince Mohammad bin Salman

Now, Middle East Eye reports that one of MbS’s guests has reportedly died under torture rather than fork over his money and assets to his domineering relative. He was reportedly beaten and tortured so bad his family members had difficulty recognizing his body.

Major general Ali Alqahtani, who was detained in early November as part of an alleged anti-corruption drive, had been working in the royal guard forces.

 

He was the manager of the private office of Prince Turki Bin Abdullah, the son of former king Abdullah Bin Abdulaziz, according to the newspaper.

 

Alqahtani died on 12 December after being tortured with electric shocks, and his family struggled to recognise him after receiving his body, according to sources, the newspaper reported.

We know this might come as a shock to some – Tom Friedman and the New York Times said MbS was such a nice guy! But that doesn’t change the fact that he is effectively extorting members of his own family to help plug a gaping hole in the Saudi government’s budget, willfully employing violence when necessary in a fashion that would make Tony Soprano proud. Case in point: Yesterday, we noted that the Saudi government had reportedly made Prince Alwaleed bin Talal – one of the world’s richest men - an offer he cannot refuse: Either fork over $6 billion to the Treasury, or spend the rest of his life being strung upside down and tortured by foreign mercenaries.

Back when oil was at $100 and above, the Saudi economy was firing on all cylinders, and nobody even dreamed that the crown jewel of Saudi Arabia - Aramaco - would be on the IPO block. But official data released earlier this week showed the Saudi economy contracted this year for the first time in eight years. It’s estimated to have shrunk by 4% as thousands of state-subsidized jobs have disappeared.

But despite the contraction, the Saudis have announced a radically expansionary budget for 2018. The government is forecasting spending at 978 billion riyals ($260.8 billion), up 10% on 2017 estimates, as the royal family’s proxy war against Iran in Yemen enters its third year.

Even though oil prices are seemingly stuck at $50 a barrel, the Saudi government knows that its survival depends in part on placating the country’s citizens, who’ve grown accustomed to the trappings of a lavish welfare state.

This goes back to one of the reasons MbS has been able to get away with his crackdown: millions of regular Saudis have lauded MbS’s treatment of his fellow royals, seeing it as their long-overdue comeuppance.

Given that political opposition to the Crown Prince – who is expected to soon succeed his ailing father as king.

The Taxman Cometh: Court Orders Coinbase To Hand Over Information On Cryptocurrency Users

Most could see the writing on the wall: the taxman cometh.  The Internal Revenue Service has been upset that Americans are daring to make money that they cannot tax, but not for much longer.

Bitcoin’s initial big draw was that it was unregulated by the government.  Most digital currencies exist in a sort of twilight state just beyond the grasp of federal regulators, but the U.S. tax authority is starting to get upset that they cannot steal this money, so they’ve figured out how to do just that.

On Wednesday, a federal judge in San Francisco ruled that Coinbase must supply the IRS with identifying information on users who had more than $20,000 in annual transactions on its platform between 2013 and 2015. After noticing that the number of tax returns claiming gains from virtual currency didn’t line up with the emerging popularity of digital currencies like bitcoin as an investment vehicle, the IRS asked Coinbase to hand over a broad swath of information on its users. Coinbase pushed back, and now the court has landed on a compromise that the company is calling a “partial victory.” –Tech Crucnch

“Coinbase itself admits that the Narrowed Summons requests information regarding 8.9 million Coinbase transactions and 14,355 Coinbase account holders. That only 800 to 900 taxpayers reported gains related to bitcoin in each of the relevant years and that more than 14,000 Coinbase users have either bought, sold, sent or received at least $20,000 worth of bitcoin in a given year suggests that many Coinbase users may not be reporting their bitcoin gains,” the court documents read.

If you are a US citizen and have been speculated /trading Bitcoin you have ordinary income gains that need to be reported…coinbase has to turn over your account records and the IRS is coming for you

— FxMacro (@fxmacro) November 30, 2017

The fact that the government couldn’t tax bitcoin was a big selling point for many. Cryptocurrency users who value the decentralization and privacy afforded by digital currencies won’t be happy, but there is a bit of good news. Coinbase succeeded in limiting the government’s initial request for information on all Coinbase users who made transactions from 2013 to 2015 to the smaller subset of high-value users.

The court narrowed the scope of documents that the IRS can request from Coinbase to taxpayer ID number, name, date of birth, address, transaction logs and account statements, deeming the rest of the documents “not necessary.” Again, these personal data requests will only apply to accounts that have bought, sold, sent or received more than $20,000 in any of those types of transactions between 2013 and 2015.

Make no mistake, the taxman cometh.

The Secret Way To Party Like An Elite When You"re In Monaco

The Monaco Yacht Club is one of Europe’s most exclusive clubs. This place has everything: Russian oligarchs, Chinese titans of industry and members of Europe’s royal families mingle with the rich and famous from around the world.

While entry to the club is probably unfeasible for most people of average means, Bloomberg reports that there’s still a way in to the club that was founded by the late Ranier III, Prince of Monaco and husband of Grace Kelly.

For those who don’t hold a golden entrance key, there’s still a way in – to the Foster+Partners-designed building, that is. Curious tourists need to visit the Wine Palace.

Of course, becoming a member requires two sponsors, approval by club president Prince Albert II, and a fee the club declined to disclose.

The club boasts some impressive stats: It keeps 3,200 bottles of wine, Champagne, and spirits on its shelves. Most are French, with Bordeaux producers Château Smith Haut Lafitte and Château Cheval Blanc being particularly hot sellers. Prices start from just €10 ($12) a bottle and average around €40, despite the boîte’s fashionable location. The food menu is compact but ticks all the boxes, with a varied cheese platter, foie gras, palm-size tartines, smoked fish and, in summer, a pretty pile of tiny heirloom tomatoes and rounds of fresh mozzarella.

A seat on the club’s terrace allows for prime people-watching. And while the Wine Palace might not be officially part of the Yacht Club, many of the club’s members will visit the restaurant to peruse its wine selection.

Monaco boasts an impressive array of vaunted restaurants, five Michelin-starred, eleven Michelin-recommended. But for travelers on a budget, Bloomberg interviewed several locals and assembled a list of sleeper picks:

Maya Bay:

“A well-known Japanese-Thai spot on the ground-level of a very standard apartment complex, the bland exterior here belies how trendy the restaurant actually is. Reservations are essential, especially if you want to sit outside. There is an indoor dining room with a dozen tables and chandeliers dripping from the deep red ceiling, plus a wood pavilion in the peaceful garden out back. 24 Av. Princesse Grace; Lunch 12–2:30 p.m., dinner 7:30–11 p.m.”

Sass Café:

“The Mediterranean-leaning Sass Café is a great pick for dinner. It serves such delicate dishes as tagliolini with prawns and rucola or Provençal sea bass to tables of suited and heeled couples. 11 Av. Princesse Grace; dinner nightly from 8 pm.”

Monte-Carlo Beach Club:

“Classic Côte d’Azur embodied: Think chairs with beautiful white-and-blue striped cushions and iconic views from the terrace, especially late in the day when the sun starts setting behind the mountains and the water and all of Monte Carlo stretch out before you. Nicolas Bellavance-Lecompte, co-founder of design fair Nomad Monaco, says it makes the most elegant of aperitivo hours: “I like the negroni, and to eat, I have the barbagiuan, a fritter with chard and ricotta, which is very Monaco.” 2 Av. Princess Grace; open daily.”

Buddha Bar:

“Monte Carlo staffers whose job it is to know where to go— a bartender at Hôtel Metropole, the concierge at Hôtel de Paris, and two clued-in employees of the Casino de Monte-Carlo (which, to be fair, does have the same owner)—recommend Buddha Bar, once home to the 154-year-old casino’s cabaret bar. People come for sushi and stay for mojitos, which are still having a moment on the Riviera. If you don"t want to go to a club but still want to listen to music and dance a little, this is the spot. Place du Casino; 6 p.m.–2 a.m. daily.”

Odyssey:

“By day, this Karl Lagerfeld-designed Joël Robuchon restaurant is for hotel guests only, but nights from May to October, the outdoor restaurant is open to all. It’s a low-key contrast to Robuchon’s formal restaurants within the hotel; the fare is simpler and seasonal. There might be lobster medallions and eggplant risotto, sandwiches, grilled meats, or salads with white tuna belly and anchovies. Diners, Champagne in hand, tend to be mid-30s and up, a mix of couples, families, and friends out for a refined but relaxed dinner. Inside Hôtel Metropole, 4 Avenue de la Madone; from 7:30 p.m. daily May to October.”

Now that the famous Monaco Yacht Show has come and gone, tourists looking to avoid massive crowds can easily enjoy sightseeing and local amenities without needing to push through crowds of Lanvin-wearing beauties and the bajillionaires they begrudgingly tolerate.
 

Monaco Has To Build Into Mediterranean Sea To House Super-Rich

The principality of Monaco is about the same size as New York’s Central Park and slightly bigger than London’s Regent’s Park. Besides hosting the Monaco Grand Prix it is home to thousands of multi-millionaires, including tennis player Novak Djokovic and F1 driver Lewis Hamilton, who enjoy the fact that Monaco does not levy income tax or capital gains tax. As the Financial Times notes.

Monaco’s enduring popularity for tax exiles also rests on its year-round climate, unrivalled security and its wealthy, multicultural society...

 

It has an opera house, a philharmonic orchestra and concerts throughout the year. It has good transport links: Nice International Airport is just six minutes away by helicopter.

The problem for Monaco is that more and more millionaires want to live there – even though property is the second most expensive in the world after Hong Kong - and there simply isn’t the space. Furthermore, the average Monegasque home only changes hands once every 37 years.

In another bizarre sign of the financial bubble, is will build 120 new luxury homes by reclaiming 6 hectares (15 acres) from the Mediterranean Sea. According to The Guardian.

Construction has begun on a $2bn (£1.5bn) scheme to reclaim land from the sea around Monaco so that more luxury apartments can be built for the thousands of extra millionaires expected to move to the principality in the next 10 years. Nearly 35 in every 100 Monaco residents are millionaires and more of the global super-rich want to join them. Around 2,700 more are expected to call Monaco home by 2026, according to research by estate agent Knight Frank, taking the total to 16,100 out of a total population of under 38,000.

But the sovereign city-state – which is only slightly bigger than Regent’s Park in London – has run out of space for those seeking the “fiscal advantages” that the tax haven offers. To attract the world’s wealthy, Prince Albert II, the reigning monarch, has approved the “offshore urban extension project”, which will add six hectares (15 acres) to Monaco’s 202 hectares. This will allow the creation of 120 luxury homes selling for more than $100,000 per sq metre – more expensive than One Hyde Park in London and 15 Central Park West in Manhattan.

The new Portier Cove ecological neighbourhood, near Casino de Monte-Carlo, is regarded as vital for the continued growth of the principality; according to state statistics body L’Institut monégasque de la statistique et des études économiques (IMSEE), not one new-build apartment went up for sale last year.

Monaco has been down this route before, when a larger reclamation was shelved due to the 2008 financial crisis and environmental concerns. While another financial crisis could still affect the current project, the environmental opposition has been placated this time.

Previous plans for a larger reclamation scheme were dropped after the financial crisis and environmental concerns. But Bouygues, the construction company behind the project, has promised there will be no detrimental effect on the environment. Important species on the seabed have been moved to a new reserve and the company said 3D-printed artificial coral reefs on the 18 trapezoid reinforced concrete caissons used to create the boundary of the new land would provide an artificial reef for wildlife.

True to form, a “global super prime” estate agent in the principality is expecting prices to continue rising into a new “stratosphere”. The Guardian continues.

Edward de Mallet Morgan, global super prime residential partner at Knight Frank, said huge demand and a severe lack of supply had sent Monaco prices “through the roof”. A cool $1m in Monaco will buy 17 sq m of prime residential property, less than a third of the space it would buy in Paris and just over half of the 30m of space it would command in prime central London.

Only 70 of the Portier Cove apartments – some of which are designed by The Shard architect Renzo Piano – will go on sale (the others being retained by the developer). Mallet Morgan said that by the time the development was finished “who knows what stratosphere Monaco’s prices will have reached”. “Such is the demand for new waterfront homes that price will be little deterrent to buyers – and their tax advisers - who are thinking ahead with wealth preservation in mind for future generations of their families,” he said.

Having crunched the numbers, Knight Frank estimates that 1,220 of Monaco’s 38,000 residents were worth more than $30 million in 2016, a 10% increase on the previous year. Using this definition of ultra-high net worth (UHNW), Monaco has 320 UHNW individuals per 10,000 citizens compared with 2 in every 10,000 citizens in the US. Speaking to the Guardian, Mallet Morgan discussed the tax issue…and how much “ready” cash you’d need to apply for residency.

“In their private lives and business lives, they naturally want to structure themselves so that they are only paying as much tax as they need to. You can’t avoid that Monaco is a tax haven, you can dress it up as a low-tax environment, but it is a tax haven with a lot of tax breaks for families, businesses and importantly inheritance tax.

“Inheritance tax is important for a lot of families who have developed wealth over generations, because here there is no tax at all on passing wealth over to children.” The inheritance tax break applies to assets held in Monaco or overseas.

There is no personal income tax in Monaco. In the UK, income above £150,000 is taxed at 45%. Companies incorporated in Monaco are exempt from taxes if most of their business is based in the principality. In order to apply for Monaco residency, applicants must open a Monaco bank account and deposit at least €500,000 (£440,000).

Security is another attraction, as is the "ease of commute".

Nick Edmiston, the founder and chairman of superyacht builder Edmiston & Co, said a high sense of personal security was a big draw for the super-rich. “You can walk around wearing expensive jewellery and feel safe,” said Edmiston, who has lived in Monaco since 1989. “Many wealthy people are used to always being surrounded by bodyguards but that’s not necessary in Monaco.”

However, Mallet Morgan warned rich prospective buyers that they were not likely to get much space for their money. “You can pay the best part of €500,000-€750,000 for a parking space,” he said, and a €6m two-bed apartment is going to be “quite pokey compared to London”. But a lot of people commute to London or Paris. “It is easy to go anywhere from Nice airport, which is a short helicopter ride away,” he said. “You can easily go and have a meeting with your trustees in Geneva, and then go to the Opera in Vienna that evening.”

We wonder what the reaction of the "established" Monaco residents will be to the "nouveau refugees" if, this time, the project can be finished before the next crisis.

 

Iran Urges Russia To Ditch The Dollar, Isolate America

Iran has suggested isolating the US by ditching the dollar during a meeting yesterday with Russian President Vladimir Putin in Tehran.

Remonstrating against US threats to impose new sanctions and cancel the nuclear agreement, Ayatollah Ali Khamenei branded the US an enemy and urged Moscow to completely sever ties with the US currency:

"By ignoring the negative propaganda of the enemies, that seek to weaken relations between countries, we can nullify US sanctions, using methods such as eliminating the dollar and replacing it with national currencies in transactions between two or more parties; thus, isolate the Americans.”

As The Express reports, Putin met Iranian political leaders in an effort to nurture a warming relationship strengthened since Donald Trump recently threatened to abandon the international nuclear deal with Iran reached in 2015.

The Russian premier criticised American interference in the region and described his country’s warm relations with Tehran. Despite the sanctions, Putin said:

“We devoted our funds to scientific and technological progress, and we had significant growth in the fields of biotechnology, IT, agriculture and space industries. Now, in spite of the initial concerns, we have realised that we can do whatever we decide to.”

Khamenei wants to step up cooperation to enable peace in the Middle East, Iranian state TV reported.

During the meeting with Putin, Khameini said:

"Full resolution of Syria"s crisis needs strong cooperation between Iran and Russia. Our cooperation can isolate America. This cooperation will restore stability in the region.”

Mr Putin praised cooperation with Iran as "very productive," adding that "we are managing to coordinate our positions on the Syrian issue."

What's Next For President Macron

As noted earlier, following Macron"s victory the reaction in key FX crosses and pairs has been very subdued, suggesting today"s outcome was no surprise to traders at least in terms of technical positioning. Another reason why "the news may be getting sold" is that as Deutsche Bank and various other sellsiders suggested, another near-term hurdle looms in just a few weeks time with the French parliamentary elections.

Other immediate deliverables include naming a prime minister, forming a government, passing labor market reform, and negotiating Brexit. Here is a breakdown of what the immediate next steps facing the youngest ever French president are, courtesy of a late Sunday note out of Deutsche Bank.

France: Macron President, what next?

Emmanuel Macron won the second round of the presidential election capturing ~65% of the expressed votes against Le Pen. The turnout was satisfactory at ~75% but lower than previous presidential elections. Also, ~10% of the votes were blank, two to three times the usual share. Ultimately, far-left voters supported Macron more than expected by the latest polls.

This is a disappointing result for the National Front. In 2002, Jean-Marie Le Pen against centre-right candidate Chirac had gathered 18% of the expressed votes in the second round. In 2017, Marine Le Pen gathered 35%. The National Front rise is less impressive than these figures suggest. In 2002, it captured 14% of the electorate once accounting for abstention, and ~23% in 2017.

Macron will now have to name a Prime Minister with parliamentary experience, able to lead the lower-house election campaign and then manage the daily business of parliamentary politics. He mentioned that his PM name and government will be revealed after the inauguration that needs to happen by 14 May.

As we wrote in Focus Europe on Friday 5 May, recent electoral results and polls suggest that Macron"s party could be the main party in the French lower house post 11-18 June elections. An outright majority for his new party "En Marche!" appears numerically possible. If not, a majority could be reached with the participation of moderate centre-left and/or centreright MPs who have already expressed their preparedness to govern with Macron in such a situation. In the coming weeks, Macron will be hoping to convince them to directly join his party, while they may be very reluctant to take the risk.

In terms of reform timetables, Macron aims to pass labour market reforms quickly over the Summer 2017, take more time to pass unemployment reforms at the end of 2017 and take a longer perspective on simplifying the retirement system (see here for details).

Regarding Brexit and the EU, Macron has run on a pro-EU platform and has repeatedly explained his ambition to make France an equal partner to Germany. He will most likely prioritise the relationship with Germany over Brexit. A victory by Macron at the presidential election is unlikely to lead to easier negotiations for the UK.