Panic stalks the Square Mile

In the tumultuous first week of August, the international markets woke up to the reality that extrem

During the stock-market panic of autumn 2008, we lived for the weekends. We were renting a cottage near Banbury in Oxfordshire and we would blast up the M40 on Friday nights, wend through the misty streets of our nearest village and then down into a dell, where the house nestled. An hour later, with our little boy tucked away in bed, I'd sit at my computer and watch the US markets until they closed.

Even when I knew that the traders in New York were stumbling from their offices to the bars of Broadway, I couldn't relax. It had become common practice for bad news to be released after the closing bell on Wall Street. Friday-night press releases - whether they were gloomy updates from struggling banks, a grim report from the Federal Reserve or a surprise downgrade from rating agencies - gave traders a couple of days to digest information before getting back to their desks on Monday. Those weekends, while walking through the bright clouds of falling leaves, I would try to get some perspective on the latest financial catastrophe, try to see the markets with a clarity that I wasn't afforded in the white-knuckle working week.

I thought back to that time as I sat up late on Sunday 7 August, trying to make sense of the negative headlines that had caused the stock-market jitters of late July to turn into an early-August rout. The trader's job is one of pattern recognition: to sift through information and judge between the incidental and the meaningful. The best in the business seem to make these judgements at the level of instinct. No mantic powers were required in the first week of August to tell that the news was bad. What traders, analysts and economists are now trying to work out is if this crisis is merely a big bump on the road to recovery, or a sign that the much-feared double dip is finally here.

As recently as 7 July, the FTSE was edging towards 6,100. By the end of 5 August, it sat at under 5,250. We entered correction territory - a fall of over 10 per cent from recent highs - on most major exchanges and, despite some decent US employment data, declines rivalled those that followed the bankruptcy of Lehman Brothers. The Dow Jones index staged a brief rally late that afternoon as Silvio Berlusconi announced measures aimed at liberalising Italy's economy. With the echo of the closing bell still ringing on Wall Street, however, Standard & Poor's (S&P) dramatically stripped the US of its AAA rating for the first time in history.

As long as the US retains its AAA status at the two other big rating agencies (Moody's and Fitch), S&P's move is largely symbolic. Banks and insurers will still be able to treat US treasury bonds as AAA-rated for risk management purposes and the downgrade will have only a marginal effect on borrowing costs. That doesn't mean we should ignore it.

Many will question the validity of S&P's move, given the tarnished reputations of such agencies after their decision to give ridiculously inflated ratings to sub-prime securitisations in the run-up to the financial crisis. The US government has highlighted flaws in S&P's calculations, pointing to a $2.1trn mistake. Yet S&P has, for once, got things right. The drawn-out relief rally that has taken place since early 2009 reflects the concerted, unilateral action taken by governments across the world to address the credit crisis. The over-leveraged financial system was bailed out by politicians, who realised that the only way to keep banks alive was to assume the liabilities of those in the worst shape, while pumping enormous amounts of liquidity into the markets to resuscitate the rest. The plan worked and stock markets heaved a communal sigh of relief.

Fearful symmetry

The political decisiveness of those mid-crisis days was a canard. In the weeks leading up to the S&P downgrade, there was a ghastly trans­atlantic symmetry as US politicians indulged in shameful point-scoring over the (usually routine) raising of the debt ceiling and Europe shilly-shallied over its response to the seemingly endless problems in Greece. Only debt of the most robust credit quality should be rated AAA. The US came within days of defaulting on its bonds as Republicans and Democrats played games of economic brinkmanship. In downgrading the US rating, S&P merely acknowledged that an investment in the country's debt risks falling foul of political intransigence.

Meanwhile, José Manuel Barroso, president of the European Commission, was correct to question the "systemic capacity of the euro area to respond to the evolving crisis" but this was unhelpful. The European Financial Stabilisation Facility - set up to bail out struggling euro-area governments - needs to be bigger than the current €440bn (£385bn) but any major increase will be resisted strongly by Germany. Italian and Spanish bond yields rocketed, pushed higher by a lack of direction at the European Central Bank (ECB), which initially held back from including their debt in its asset purchase scheme.

In the first week of August, the markets woke up to the reality that the financial crisis, which they had thought was behind them, had merely been transferred from the private sector to public balance sheets. Where companies led by supposedly decisive CEOs used to be the big borrowers, the debt is now in the hands of governments run by infighting bureaucrats. In the wake of the S&P downgrade, China called for the US to get over its "debt addiction". As a holder of over $2trn of US debt, China, by far the country's largest creditor, has a right to make its voice heard. More worrying for the US was a suggestion at the end of the press release that China might stop or scale down its purchase of treasuries. The S&P downgrade is not world-changing in itself, but if China uses it as an excuse to alter its asset allocation or push for the replacement of the US dollar as the global reserve currency, China's reference to the US as "the world's sole superpower" would end up carrying some heavy irony.

The last time stocks hit the lows seen on the morning of 5 August was towards the end of August last year, when a combination of concerns over European peripherals (Ireland and Portugal specifically), Chinese inflation and poor US economic data hit investor confidence. The old trader adage "Sell in May and go away" (that is, hold only cash from May to October) would have been particularly useful this year. The rationale behind the maxim is sound: with investors on holiday, any moves in the market are affected by illiquidity. Where, in a fully functioning market, one would expect buyers and sellers to remain more or less balanced, in the summer months there is no one around to stand in the way of a rout. Last year's August slump was largely owing to this summer sluggishness.

The situation this time around is rather different. Because of the ongoing wrangle over the US debt ceiling, traders have been chained to their desks for the past few weeks. Many of those who did get away have been called back from their trips to the Côte d'Azur. Volumes have been heavy recently. On 5 August, US stocks experienced the highest levels of trading since the "flash crash" of May 2010, when computer-driven, high-frequency-trading hedge funds caused a correction of nearly 1,000 points in the Dow Jones index. Then, it was a technical fault in the market that caused the enormous trading volumes. This time, investors are scared and are selling out of all but the most defensive stocks.

Another sure sign of fear is the record volume of options trades that went through on 4 and 5 August as investors attempted to put in place hedges against further market turmoil. Panic once again stalks the Square Mile and traders are struggling to make sense of a complex picture. Usually, in times of market turmoil, gold rises in price; but when panic really sets in, the highest-quality assets suffer.

Some of the best trades of my career were made in the mad days between October 2008 and February 2009, when hedge funds were scrambling to raise money to meet margin calls (a requirement to post cash against the falling value of the fund's assets). Because it was impossible to sell anything but the most liquid assets (the "family silver", as it was described), those of us who did have cash to spend were able to pick up extraordinary bargains, with discounts of anywhere up to 70 per cent of face value. This time, gold is the "family silver". It is always useful to watch the gold price - it's a pretty good sign of where investors are on the greed/fear continuum - and falls in gold in times of panic suggest a capitulation of confidence. If you believe Warren Buffett's mantra of "Be fearful when others are greedy and be greedy when others are fearful", it's a good signal to start picking up bargains.

The big question for traders and portfolio managers is whether we have experienced a short, sharp shock and should be buying selectively or whether we are at the beginning of a new bear market, which would entail an overhauling of asset allocations. The picture looks bleak. If we are entering a double-dip recession, investment strategy will be a matter of quick thinking and guesswork - but there are obvious approaches traders could take and a few likely developments to keep in mind.

1 Equity exposures should be reduced for all but the most defensive stocks. Pharmaceutical companies, basic household and consumer goods should be held.
2 Currency investment will focus on a new breed of solvent nations with stable political and economic systems. The Singaporean dollar, the Norwegian krone and the Australian dollar will join the yen and the Swiss franc as the main safe-haven currencies.
3 We should not rule out dramatic inflation driven by governments attempting to inflate away the unsustainable levels of debt on their balance sheets. Already, there is talk of further quantitative easing in the US. Although everything points to a bubble in the gold price, it remains one of the few sure-fire ways of hedging against inflation.
4 Diversification is still key. A portfolio with a good spread of asset classes (including commodities, private equity and hedge funds) and geographies (with attention to Asia and South America) will - with luck - ride the storm.

Back to reality

As traders returned to their desks on Monday 8 August, it appeared that a weekend's contemplation had failed to lift the gloom. After following Asian stocks lower, the FTSE briefly rallied into positive territory. This window of optimism prompted Nick Clegg to claim that the ECB's buying of Italian and Spanish bonds was "calming the markets". He was wrong.

As Wall Street futures plunged, the FTSE gave up its modest gains and slumped towards the 5,000 level. Gold hit a record high. Crude oil dived. With unrest on the streets mirroring the turmoil in the markets, it is impossible to say how bad things will get from here.

Following Lehman's collapse, it felt as if all of the certainties had been stripped from the markets, as if there was nothing between us and financial Armageddon. It feels like that again. Without bold intervention from the governments at the heart of this crisis, traders will be looking back on the weekends of the 2008 crash with misty-eyed nostalgia. Back then, it felt like the end; now, we know that it was just the beginning.

Alex Preston is the author of "This Bleeding City" (Faber & Faber, £7.99).

This article first appeared in the 15 August 2011 issue of the New Statesman, The coming anarchy

David Young
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The Tories are the zombie party: with an ageing, falling membership, still they stagger on to victory

One Labour MP in Brighton spotted a baby in a red Babygro and said to me: “There’s our next [Labour] prime minister.”

All football clubs have “ultras” – and, increasingly, political parties do, too: although, in the case of political parties, their loudest and angriest supporters are mostly found on the internet. The SNP got there first: in the early days of email, journalists at the Scotsman used to receive bilious missives complaining about its coverage – or, on occasion, lack of coverage – of what the Scottish National Party was up to. The rest soon followed, with Ukip, the Labour Party and even the crushed Liberal Democrats now boasting a furious electronic horde.

The exception is the Conservative Party. Britain’s table-topping team might have its first majority in 18 years and is widely expected in Westminster to remain in power for another decade. But it doesn’t have any fans. The party’s conference in Manchester, like Labour’s in Brighton, will be full to bursting. But where the Labour shindig is chock-full of members, trade unionists and hangers-on from the charitable sector, the Conservative gathering is a more corporate affair: at the fringes I attended last year, lobbyists outnumbered members by four to one. At one, the journalist Peter Oborne demanded to know how many people in the room were party members. It was standing room only – but just four people put their hands up.

During Grant Shapps’s stint at Conservative headquarters, serious attempts were made to revive membership. Shapps, a figure who is underrated because of his online blunders, and his co-chair Andrew Feldman were able to reverse some of the decline, but they were running just to stand still. Some of the biggest increases in membership came in urban centres where the Tories are not in contention to win a seat.

All this made the 2015 election win the triumph of a husk. A party with a membership in long-term and perhaps irreversible decline, which in many seats had no activists at all, delivered crushing defeats to its opponents across England and Wales.

Like José Mourinho’s sides, which, he once boasted, won “without the ball”, the Conservatives won without members. In Cumbria the party had no ground campaign and two paper candidates. But letters written by the Defence Secretary, Michael Fallon, were posted to every household where someone was employed making Trident submarines, warning that their jobs would be under threat under a Labour government. This helped the Tories come close to taking out both Labour MPs, John Woodcock in Barrow and Furness and Jamie Reed in Copeland. It was no small feat: Labour has held Barrow since 1992 and has won Copeland at every election it has fought.

The Tories have become the zombies of British politics: still moving though dead from the neck down. And not only moving, but thriving. One Labour MP in Brighton spotted a baby in a red Babygro and said to me: “There’s our next [Labour] prime minister.” His Conservative counterparts also believe that their rivals are out of power for at least a decade.

Yet there are more threats to the zombie Tories than commonly believed. The European referendum will cause endless trouble for their whips over the coming years. And for all there’s a spring in the Conservative step at the moment, the party has a majority of only 12 in the Commons. Parliamentary defeats could easily become commonplace. But now that Labour has elected Jeremy Corbyn – either a more consensual or a more chaotic leader than his predecessors, depending on your perspective – division within parties will become a feature, rather than a quirk, at Westminster. There will be “splits” aplenty on both sides of the House.

The bigger threat to Tory hegemony is the spending cuts to come, and the still vulnerable state of the British economy. In the last parliament, George Osborne’s cuts fell predominantly on the poorest and those working in the public sector. They were accompanied by an extravagant outlay to affluent retirees. As my colleague Helen Lewis wrote last week, over the next five years, cuts will fall on the sharp-elbowed middle classes, not just the vulnerable. Reductions in tax credits, so popular among voters in the abstract, may prove just as toxic as the poll tax and the abolition of the 10p bottom income-tax rate – both of which were popular until they were actually implemented.

Added to that, the British economy has what the economist Stephen King calls “the Titanic problem”: a surplus of icebergs, a deficit of lifeboats. Many of the levers used by Gordon Brown and Mervyn King in the last recession are not available to David Cameron and the chief of the Bank of England, Mark Carney: debt-funded fiscal stimulus is off the table because the public finances are already in the red. Interest rates are already at rock bottom.

Yet against that grim backdrop, the Conservatives retain the two trump cards that allowed them to win in May: questions about Labour’s economic competence, and the personal allure of David Cameron. The public is still convinced that the cuts are the result of “the mess” left by Labour, however unfair that charge may be. If a second crisis strikes, it could still be the Tories who feel the benefit, if they can convince voters that the poor state of the finances is still the result of New Labour excess rather than Cameroon failure.

As for Cameron, in 2015 it was his lead over Ed Miliband as Britons’ preferred prime minister that helped the Conservatives over the line. This time, it is his withdrawal from politics which could hand the Tories a victory even if the economy tanks or cuts become widely unpopular. He could absorb the hatred for the failures and the U-turns, and then hand over to a fresher face. Nicky Morgan or a Sajid Javid, say, could yet repeat John Major’s trick in 1992, breathing life into a seemingly doomed Conservative project. For Labour, the Tory zombie remains frustratingly lively. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.

This article first appeared in the 01 October 2015 issue of the New Statesman, The Tory tide

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Where are all the people going?

In a new wave of repression under the Sisi regime, Egyptians are being forcibly disappeared.

On Monday 1 June, Esraa el-Taweel, a 23-year-old sociology student, went out for dinner with two of her friends to Chili’s, a branch of a Tex-Mex chain that is popular among middle-class Egyptians. The restaurant is on a large ship permanently moored on the Nile in the Zamalek district, one of the wealthiest neighbourhoods in central Cairo. Esraa often hung out with Souhaib Sa’ad, an economics and politics undergraduate, and Omar Ali, who, when he wasn’t lounging around the city’s many cafés, could be found at an architecture college. Both men are slim with curly hair and Esraa is short, wears colourful hijabs and sometimes uses a cane to walk. Less than 18 months earlier, she had been shot in the spine by security forces at a demonstration. Despite months of physiotherapy, the feeling had not fully returned to her legs.

Earlier that afternoon, Omar had picked Esraa up from her home, as he had often done since her injury, and they went horse riding near the Pyramids. Souhaib joined them later at Chili’s. They liked to try a new restaurant every week and Omar, who initiated the tradition, had never been there before. When they finished their meal, they goofed around taking selfies. At about 8.30pm, after Souhaib had completed his evening prayers, they stepped out on to the corniche, the uneven, tree-lined pavement that runs between the river and a quiet, two-lane road. Shortly afterwards, the three friends disappeared.

By 11pm, Esraa’s younger sister Duaa, with whom she shares an apartment in Cairo, started to worry. Duaa tried calling several times but Esraa’s mobile was switched off, as were Souhaib’s and Omar’s. She tried to reassure herself that Esraa might be staying with a friend, but the next morning she learned that Souhaib and Omar were also missing. The families of the three students decided to wait until 3pm, when Souhaib was due to report to a police station as part of his bail conditions. He had been detained in January 2014 after police found footage of anti-government protests on his phone and he was one of the less-publicised defendants in the trial against the al-Jazeera journalists accused of spreading false news and supporting the recently banned Muslim Brotherhood. After more than 400 days in jail, Souhaib was freed in February pending a retrial, but had to report to the
police daily. If he didn’t show up, the families would know for certain that something was seriously wrong.

Souhaib missed the bail appointment. Relatives of the trio began to look for them frantically in hospitals and police stations across the city but found nothing. Esraa’s parents and three of her younger siblings live in Saudi Arabia, where her father works as a translator, and though her mother boarded the first available flight to Cairo, Duaa, who is 22, and her younger sister Alaa had to manage alone for the three days.

On Wednesday 3 June, 48 hours after Esraa was last seen, Duaa filed a missing person report with the prosecutor general, the standard first step when anyone goes missing in Egypt. She and a few friends set up a Facebook page and launched a Twitter campaign with the hashtag #Where_is_Esraa. They produced a video of her and posted it online. The film opens with footage of Esraa on her bicycle: she waves at the photographer and cycles into the distance. It shows a series of still photos of her with her arms wide open, a camera flung around her neck and a floppy sun hat over her headscarf, and she grins, wearing pink Mickey Mouse ears. Even in the final shot, taken while she was in a wheelchair, with a blanket over her legs and a laptop on her knees, she is smiling.

The video doesn’t show how Esraa struggled with her six-month confinement in a wheelchair – the countless times she tried to lift herself out of it, only to fall on the floor and cry with frustration – but Duaa thinks that it captures her elder sister’s personality. “She’s childlike. She just loves going out and playing and hanging out with her friends,” she said, when we first met at a Zamalek café in mid-July.

Duaa, an art student, is tiny and dresses trendily, her wavy hair piled high on her head, her iPod headphones dangling out of her handbag. She answered my questions carefully, almost robotically, and each time she finished speaking she slumped into her  chair as though she had been pushed. Esraa disappeared during Duaa’s end-of-year exams and, although some friends rallied around her, helping her to submit her coursework so that she wouldn’t fail, others were told by their parents to stay away from the el-Taweel family to avoid getting caught up in the case.

The two sisters are very close. Duaa moved to Cairo from Saudi Arabia for her studies in July 2011, a year after Esraa, and her elder sister seemed to have grown streetwise in the time they had spent apart. Two days after Duaa arrived in the city, Esraa took her to her first demonstration. When the crowd was attacked by beltagiya (“thugs”), the sisters were so scared for one another that they decided they would never protest together again, though they often went separately. I once suggested to Duaa that the way she handled her sister’s disappearance was brave but she just shrugged. She told me that she often wished that their roles were reversed: Esraa would have known what to do.

In the weeks after the disappearances, the photographs of the missing trio circulated online and the questions of their friends, relatives and young people – “Where is Esraa?” “Where is Souhaib?” “Where is Omar?” – echoed unanswered on Twitter and Facebook. Yet the families were starting to build up a picture of what had happened. They approached contacts in the security forces, who reported that all three had been arrested and were being detained. Former inmates at Egypt’s national security headquarters also reported seeing the trio there. Yet, without official acknowledgement, there was little that anyone could do. Esraa’s lawyer, Halim Hanish, told me that he had presented the families’ evidence to the prosecutor general’s office but received no response.

The three students had joined the swelling ranks of Egypt’s forcibly disappeared. The Freedom for the Brave group, a loose network of activists, lawyers and detainees’ families that monitors such cases, recorded that 163 people had been secretly detained by Egyptian security forces between April and June this year. Hanish, a member of the group, said that the figure could be higher, as some families are too afraid to speak out. Another local NGO, the Egyptian Commission for Rights and Freedoms, announced in August that it had recorded 1,250 cases since January. Sometimes, the disappeared are eventually located in a jail or at a police station. Often, new arrivals at a prison will find an inmate who is expecting a visit and ask them to pass on their name, family contact details and a short message. Families can be left waiting for days, weeks or months for news of missing relatives. Discovering that they are in prison is one of the better possible outcomes: occasionally, the disappeared resurface dead.


In 2011, many Egyptians believed that revolution was a way to end such police abuses. One of those who inspired the uprising did not live to see tens of thousands of people across the country take to the streets to chant their demands for “bread, freedom and social justice”. Khaled Said was a 28-year-old man who was beaten to death by security forces after being arrested at an internet café in 2010. A Facebook group created in his honour declared “We are all Khaled Said” and gathered hundreds of thousands of online supporters in the months leading up to the 2011 protests.

Wandering around Cairo today, you might still catch a glimpse of Said’s youthful likeness memorialised in graffiti: a clean-cut, wide-eyed kid in a hoodie. It is a symbol of defiance or, perhaps, of disappointment. In February 2011, when Egypt’s then president, Hosni Mubarak, was overthrown after almost 30 years in power, the interim authorities were quick to abolish the much feared State Security Investigations Service, which was responsible for crushing dissent, replacing it with the Homeland Security agency. But in the past two years, following the popularly backed military overthrow in 2013 of Mohammed Morsi, Egypt’s elected president and a member of the Muslim Brotherhood, Homeland Security has become ever more powerful.

Following years of unrest, Egypt’s military leadership promised peace and stability – after the bloodshed. In its first few months in power, it sought to regain control over the country’s streets by launching a brutal crackdown on Muslim Brotherhood supporters, killing more than 1,000 protesters and arresting many more. In July 2014, an official from the interior ministry told the Associated Press that 22,000 people had been detained in the year since Morsi was ousted, most of them supporters of the Muslim Brotherhood or Islamists. The Egyptian Centre for Economic and Social Rights, a local group monitoring political arrests, believes that the figure is closer to 41,000. Several prominent secular activists have also been arrested.

An armed insurgency in Sinai, where jihadists have declared loyalty to the so-called Islamic State, and a steady series of terrorist attacks in the rest of the country have convinced many Egyptians that their country needs the new marque of authoritarianism offered by President Abdel Fattah al-Sisi, Egypt’s imperious leader. Al-Sisi, who led the 2013 takeover and was elected the following year with an eyebrow-raising 96 per cent of the vote, had served as head of military intelligence under Mubarak. His new interior minister, appointed in March, shares a similar pedigree: Magdy Abdel Ghaffar is a former chief of Homeland Security. “It’s like the security services are controlling everything in Egypt now,” Nada Saad, a human rights lawyer, told me.

It might seem that Egypt’s security state is simply returning to its old ways but that is not quite accurate. The feeling, often expressed by activists and lawyers here, is that this new wave of repression seems to sweep up citizens indiscriminately. Mohamed Elmessiry, an Egypt researcher at Amnesty International, told me that he had spoken to someone who had spent 11 years in detention under Mubarak and then been detained by Homeland Security. “[He] said at least under the Mubarak government, national security knew what they were doing and who they wanted. National security [operatives] now are completely random: they arrest people randomly; they charge and investigate and torture people randomly.”


On 17 June, the first day of Ramadan and 16 days after Esraa went missing, Duaa finally saw her sister. A stranger had called Duaa to say that she had spotted Esraa in al-Qanater women’s prison in Cairo. When Duaa arrived at the gate of al-Qanater, the guard on duty remembered the young woman who had arrived alone and been unable to walk, and advised Duaa to wait with him rather than go inside the prison. Though neither the family nor her lawyers had been informed, Esraa was due to be transferred to court for a hearing. A few minutes later, Duaa saw her sister being escorted into a police van. She called out her name and Esraa, fearing for Duaa’s safety, burst into tears and asked her to leave. Duaa called Halim Hanish, the lawyer acting for her sister.

Hanish and Esraa are good friends. They met during the 2011 street protests and when, on 25 January 2014, Esraa was shot at a peaceful demonstration outside the Mustafa Mahmoud Mosque, he carried her to hospital. He says that they were protesting in favour of a “third way” that rejects both the Muslim Brotherhood and the military. It’s not uncommon now for Hanish to represent old friends. “You have to comfort them, even while you know for sure that nothing good is happening any time soon,” he said. “You have to comfort the families, as well. You have to lie to their faces, look them in the eye and tell them how it seems bright, insha’Allah they will be fine, even though you know [they won’t be]. It gets to you eventually.”

After the call from Duaa on 17 June, Hanish rushed to the prosecution office but was repeatedly told that Esraa was not there. Then he saw her from a distance. He shouted out to Esraa, to tell her that she was no longer alone and he was here for her now. As a result, he says, her hearing was cancelled because the prosecution lawyer wanted to speak to her privately. According to Amnesty International’s Elmessiry, this fits a common pattern for forced disappearances: often the first, second and sometimes third court investigations are conducted while the families are still unaware of their missing relative’s location and while the defendant does not have legal representation. This allows Homeland Security more freedom to conduct the initial investigation and usually extract a confession, which will form the basis of the case against the detainee.

It was not until 27 June that Hanish was able to attend a hearing. The judge said that he needed more time to consider the case against her and postponed her session until 29 June, but that day the prosecutor general, Hisham Barakat, was killed in Cairo in a bomb attack. Esraa did not appear in court until 11 July and since then her pre-trial detention has been renewed every 15 days.

Hanish understands that Esraa has been charged with belonging to the Muslim Brotherhood, spreading false news and disturbing the public by showing footage of police brutality but he knows this only informally: his requests to see the report against her, which details the reasons for her arrest, have been refused. So, too, was a request for her to be moved closer to hospital so that she can receive treatment for her back problems. The ministry of interior did not respond to my requests for an interview, though previously officials have insisted that her detention was legal and have issued denials that forced disappearances take place. Esraa’s family and friends deny all charges against her.

The only available account of Esraa’s ­two-week disappearance is an open letter that her family smuggled out of prison, which was published on local news websites. She wrote that shortly after she and her friends left Chili’s, three men stopped them to ask for their ID cards and mobiles and then forced them into a minibus similar to those that operate as shared taxis in Cairo. Souhaib and Omar were blindfolded and one of the men – who identified himself as an “officer” – asked Esraa to use her hijab to cover her eyes. When her headscarf proved too short, Souhaib took off his T-shirt and she used that instead.

They were driven to Homeland Security headquarters, where she stayed for 15 days. Her blindfold was removed only at night, when often Esraa would ask for one light to be kept on so at least she would see something. “Day-long investigations, hearing voices and screams of tortured victims, men crying out loudly. Souhaib and Omar were taken away and I was alone. I was the only girl
there,” she wrote. On her final day at Homeland Security, before she was moved to al-Qanater, she was interrogated for 18 hours.

Esraa wrote another letter on 28 July. At times, it makes her she come across like a giddy teenager, joking that it is terrible to be stuck in an all-women’s prison as: “Everyone who knows me well knows that most of my close friends are guys. Do you know how tragic this is? J” She describes a cosy companionship with her cell mates (they eat crisps and drink chocolate milk together) but also the hardships: the cockroaches, the heat, the rationed bottled water and the tap water that smells like sewage and gives her skin infections, her worsening mobility, the boredom, the harassment from the “criminal” inmates. She seems to oscillate between dejection (“Sometimes I think, ‘Why do I eat? Why should I still survive?’”) and defiance, quoting the Egyptian activist Mahinour El-Masry: “We don’t like prisons but we’re not afraid of them.”


On 16 June – the day before Duaa caught sight of Esraa – Omar and Souhaib were spotted in Tora, a sprawling prison complex on the outskirts of Cairo. It wasn’t until 10 July, however, that their lawyer, Mohamed Elbaker, learned of the charges against them in a ministry of defence video that named Souhaib and Omar as part of “one of the most dangerous terrorist cells” of the Muslim Brotherhood and alleged that they had been arrested at their organisation’s headquarters.

Souhaib is shown confessing to purchasing a pistol later used to kill a police officer, and to giving protesters fireworks to throw at security forces. You could easily fail to recognise him. His nose and lips are swollen, he is pale and he seems confused. Elbaker says that his client was tortured for ten days before filming.

I met Elbaker in the discreet, unmarked office of Adalah, an organisation he helped set up to represent victims of torture and students in detention. It moves every few months to avoid police raids. Elbaker wore a striped polo shirt and had a long, square beard; at the top of his forehead he had a zabeeba, or “raisin”, a patch of darkened skin that is worn down by Islamic prayer. He reeled off a list of his affiliations – a group called the Costa Salafis, which holds interfaith discussions at branches of Costa Coffee, and the Strong Egypt political party, which was founded by a reformist former leader of the Brotherhood – but said that his greatest political commitment was to human rights. It was 1 August and Elbaker told me that he was trying to record officially the torture used against Souhaib and Omar. Souhaib still had marks on his body but Omar, who did not appear in the ministry of defence film, was in a worse condition. He still could not lift up one of his arms and he was suffering from urinary problems as a result of being repeatedly electrocuted.

The use of torture by national security forces in Egypt has been documented by Amnesty, Human Rights Watch and local rights groups (the Egyptian government periodically refutes their findings). New arrivals at a prison or police centre can expect what is commonly referred to as a haflat al-tashreefa (“welcoming party”), in which guards beat them up. My discussions with lawyers and rights groups suggest that the torture taking place in state security or military intelligence buildings is more systematic: detainees are often blindfolded and may be beaten, suspended from the ceiling, electrocuted, burned with cigarettes or raped to extract a recorded confession.

To be transferred from national security detention to prison is like “going to heaven”, Elbaker says, because it brings with it an end to this torture. Still, Omar’s and Souhaib’s struggle is not over. Unlike Esraa, they are facing a military trial. Their case now falls under the jurisdiction of the ministry of defence, not the justice ministry, and their judge (though fully trained) will be a military official.

A presidential decree of late 2014 has facilitated an increase in the use of military courts against civilians in Egypt. Halim Hanish, who is also representing Omar, described working on a military case as “a hundred times more difficult” than working on a national security case. Lawyers can’t bring their phones into court, so they can spend hours waiting around, unable to contact their colleagues or other clients, and are searched on their way in. Sometimes, they can’t take pens or papers inside. He ­remembers that once a lawyer was forced to take off his shoes and socks in case he was hiding paper in them.

Other than Souhaib’s filmed confession, the Egyptian ministry of defence has not made public any evidence in support of its accusations. The men’s lawyers say that they have not been allowed to see the prosecution reports. Both Souhaib’s and Omar’s fathers had affiliations with the Muslim Brotherhood – Omar’s was killed by security forces at a Brotherhood protest in August 2013 – but their lawyers and families insist that they do not share their fathers’ views and are not members of the group. Everyone I spoke to about Omar described him as fundamentally uninterested in politics – as Hanish, who knows him well, put it: “If you meet Omar for an hour, he will spend 45 minutes talking about food.”

Souhaib was different; he took to the streets to protest in 2011 and frequently after that. But his brother, Osama, told me that Souhaib worked on the presidential campaign of Strong Egypt’s leader, Abdel Moneim Abul-Fotouh. This suggests that Souhaib is critical of al-Sisi’s government but unlikely to be a member of the Brotherhood. The problem that Omar and Souhaib now face, however, is that the military video will now form the basis of the case against them. They are, in effect, guilty unless proven innocent.

When those who were forcibly disappeared emerge again, they must navigate a legal system that is already mobilised against them. The terms of their detention violate international as well as Egypt’s domestic laws. Egyptian law contains specific provisions banning the use of torture, requiring that detainees receive adequate medical attention and specifying that individuals may not be held in police custody for longer than 24 hours without charge.

Souhaib’s detention has caused him the additional complication that he ended up missing sessions of the Jazeera trial. When he finally did appear in court on 29 June, he tried to tell the judge why he had been absent, explaining that he had been held in secret detention for 15 days and tortured. The judge cut Souhaib off, saying that he could register a separate complaint if he wished but the information was irrelevant. On 29 August, Souhaib was sentenced to three years in jail in the Jazeera case – but the other charges against him are so serious that this news barely mattered to him.

Ezzat Ghoneim and Mohamed Sadek, lawyers with the Egyptian Co-ordination for Rights and Freedoms, told me that they tried to file a case at Egypt’s highest court, the court of cassation, to force the prosecutor general to investigate the disappearances. Their case has been rejected several times and they are currently appealing the decision. Neither is feeling optimistic. Those who defend the disappeared do so at great personal risk. In February, a lawyer died at a police station after being tortured. “We face harassment all the time. We always work in fear,” Halim Hanish told me. But last year, Souhaib’s bewildered and devastated father, Sa’ad, who had worked for many years as a metalworker, decided to enrol in law school. He has completed his first year of studies now and spends his evenings hunched over his books. If it’s too late to help his son, he reasons, he might yet be able to offer counsel to others.


The last time that I met Duaa el-Taweel was on 1 September, three months after Esraa’s disappearance. We chatted in Esraa’s bedroom, sitting on her floral bedspread, surrounded by her bright-coloured cuddly toys. A month earlier, Esraa’s beloved cat, Woody, had three kittens and Duaa had named them Esraa, Souhaib and Omar.

Duaa’s and her mother’s routine now revolves around their weekly visits to al-Qanater prison. They always bring her favourite foods, such as kofte and pizza – and deliver messages from Omar and Souhaib. It can take two weeks for the notes to arrive but they have helped the three friends keep up their old banter. Esraa jokes about how she, unlike the boys, has a bed. Omar writes that he can’t imagine Esraa in jail as she’s so pernickety about food and she replies that he’s not exactly tough, either.

Every week, Esraa tells her sister that this might be her last visit: perhaps next week she’ll be free. Then another seven days pass and Duaa makes the trip again.

Sophie McBain is a New Statesman contributing writer

Sophie McBain is a freelance writer based in Cairo. She was previously an assistant editor at the New Statesman.

This article first appeared in the 24 September 2015 issue of the New Statesman, Revenge of the Left