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Days of Sand and the Victory of Time

“We swear by God that we are ready to sacrifice our blood for Egypt and its people against any terrorist, extremist, or fool.”

I still can’t get over the hilarious look on the inorganic face-shaped lid covering John Kerry’s skull when Egyptian security searched him for weapons before he spoke to President al-Sisi. Even all the Botox injections and/or facial weirdness couldn’t hide his dismay. It was a belligerent and direct way of saying that the Obama’s support of the Muslim Brotherhood made them supporters of bloodshed, terrorism, and the destruction of democracy.

Egypt has a bigger problem than Obama’s screwed up grasp of foreign policy, though unscrewing those problems is a part of the narrative. The larger point is that Egypt has economic problems that rival its political instability. It is instructive to overlay the credit agency ratings actions and the politics, onto the yield to maturity of the Egyptian government USD long-term bond.

Spreads are at high levels due to the Russia airline explosion and weakening PMI readings, though nothing like what was reflected when Morsi was at the helm. The extent of the incompetence of the Morsi regime is shown by the high yields and downgrade to CCC+, which indicates a credit view that default is likely. Within months of Morsi’s overthrow and imprisonment, Egypt received an upgrade and an epic 300 basis point tightening.

The honeymoon is now over. The Russian airline crash is widely viewed as signaling that reason hasn’t fully triumphed over the dark core of Islamic extremism. Thus justice must be an iron fist. Despite the sensible economic policies pursued by President al-Sisi, the economy is stalling out. These two forces—the political and the economic—feed on each other.

At 550 basis points, it offers a decent position trade. Three reasons why. One, tourism will return, because there is no other place like Egypt. Second, Obama will be gone in less than a year. Third, the allure of Islamic extremism—at least in Egypt—is done and over. Something new and interesting human energy is afoot.

Tourism provides a big part of the hard currency that makes Egyptian USD bonds serviceable. It has pristine beaches, and the final dust of its tombstones is a veritable mill of glory. Keep in mind that ISIS has kink for destroying priceless artifacts from the ancient world in Syria and Iraq. Imagine what these fools without peer would do to the Sphinx if they got the chance. The very possibility is so tragic that it will not be tolerated and tourism revenue will recover.

The US values Egypt as a strategic ally and has for decades. It will continue to do so and the new administration, democrat or republican, will take great pains to repair the damage caused by Obama’s confused foreign policy. This will mean that foreign aid will be restored and economic ties will be reestablished. It will mean big money.

The power of Tahrir protests cannot be underestimated. This was an event in time and space with few parallels. Literally millions of citizens assembled to protest the growing tyranny and real intent of the Muslim Brotherhood: the dismantling of the constitution and the establishment of a rigid version of Shariah law. Egypt has shown that there is no place for this in their society.

This is clear from the fact that millions of protesters came because Morsi's Islamist supporters considered it open season on Coptic Christians. Sheikh Essam Abdulamek, a member of parliament's Shura Council, warned Egyptian Christians on television "do not sacrifice your children as general Muslim opinion will not be silent about the ousting of the president." Christian families in Minya were threatened not to join the protests and “to worry about your children and your homes. This message is being delivered with tact. But when the moment of truth comes, there will be no tact." The truly insane cleric Safwat Hegazi told the country's Christians: "You share this country with us, but there are red lines, and one red line is the legitimacy of Dr. Morsi. Whoever splashes water on that, we will spill his blood." To which the Egyptian military replied: “We swear by God that we are ready to sacrifice our blood for Egypt and its people against any terrorist, extremist, or fool.”

Face it: All beings travel toward God in different ways. The answer is not imposing a straightjacket of severe piety on everyone, or adhering to some masochistic austerity you know you’re “supposed” to follow, but end up resenting and hating to the core of your being. The journey is about grasping the continuum of experience, cultivating reverence for your fellow man. There's a kind of holiness in everyone. Poets, musicians and saints have depicted fragments of it. Everyone can live it in an overall approach to life and world.

Fatalism is too absurd and small and meaningless for Egyptians to tolerate anymore.

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