Egypt Closes Banks, Stock Market; Protests Spread to Saudi Arabia, Jordan; Saudi King Backs Mubarak; Reflections on Misguided US Policy

One sure way to get people fired up is to shut down the stock market and all the banks, thereby denying citizens access to their money. Yet, that is exactly the desperate course of action chosen by Egyptian President Hosni Mubarak.

Protests have now spread to Saudi Arabia, and Jordan. So far however, the protests in Saudi Arabia are of a peaceful nature, mostly related to government response to flooding. Recent history suggests that may change at any moment into something far more significant.

In a move that can easily backfire, the Saudi king defended Mubarak and offered support.

Meanwhile, in Jordan, the pace of protests have now picked up as opposition supporters have held rallies in Amman and called for the resignation of Jordan's prime minister.

Egyptian Bourse, Banks to Close

Bloomberg reports Egyptian Bourse, Banks to Close Tomorrow on Unrest

The Egyptian bourse will be closed tomorrow after thousands of protestors congregated in central Cairo for a fifth day and President Hosni Mubarak ignored demands to resign. Banks will also be shut, State TV said.

“No one expected this to take place and at such a fast sequence of events,” said Mohamed Radwan, head of international sales at Cairo-based Pharos Holding for Financial Investment. "The critical time frame for the market is from now until the implementation of economic and democratic reforms demanded by the people."

Soldiers, backed by armored carriers and tanks, are guarding banks and government buildings in the capital after acts of looting and theft yesterday. Forty people were killed and another 1,100 people were injured yesterday and today in the clashes that have swept major cities including Cairo, according to the Egyptian Health Ministry. The government of Prime Minister Ahmed Nazif resigned today at Mubarak’s request.

Domino Effect

Bloomberg reports Saudi Stocks Decline Most Since May as Egyptians Defy Curfew

Saudi Arabian shares retreated the most since May on concern political unrest could spread in the Middle East after Egyptian protesters clashed with police and the North African country’s president refused to resign.

The Tadawul All Share Index tumbled 6.4 percent, the most since May 25, to 6,267.22 at the 3:30 p.m. close in Riyadh. All but one of the 146 shares fell. Saudi Basic Industries Corp., the world’s largest petrochemical maker, slumped 7.5 percent. Savola Azizia United Co., a food producer with subsidiaries in Egypt, dropped 10 percent, the maximum fluctuation allowed in a single trading session.

“There is a lot of worry looming among investors that we’re going to see a domino effect across the region,” said Amro Halwani, a trader at Shuaa Capital PSC in Riyadh. “That is pushing investors away from equities and straight into cash. It is panic selling across the board.”

Mubarak appoints leaders as protests rage

MarketWatch reports Mubarak appoints leaders as protests rage

Mubarak appointed his intelligence chief, Omar Suleiman, vice president and named former civil aviation minister Ahmed Shafik prime minister. Shafik was charged with setting up a new government.

The appointment of the 74-year-old Suleiman may signal that Mubarak won’t run again in presidential elections in September. But the appointments of Suleiman and Shafik didn’t slow protestors’ demands for Mubarak’s resignation or immediately satisfy the Obama administration.

“The Egyptian government can’t reshuffle the deck and then stand pat,” U.S. State Department spokesman P.J. Crowley wrote Saturday on Twitter. “President Mubarak’s words pledging reform must be followed by action.”

Protests Call for Ouster of Jordanian Prime Minister

Anti-government action in Jordan picked up and Jordanian Protesters Say Prime Minister Must Go

Taking their cue from Tunisia and Egypt, an estimated 3,000 Jordanians marched through the streets after Friday prayers, demanding the resignation of Prime Minister Samir Rifai and calling for political and economic reforms.

They warned corrupt Arab leaders would face the same fate as ousted Tunisian President Zine El Abidine Ben Ali.

Peaceful protests were also held in the cities of Irbid, Karak, Maan, and Diban, AFP reported. Jordan has a population of six million, 70 percent of whom under the age of 30. Official unemployment is running at about 14 percent, but other estimates put joblessness at 30 percent.

The government says it is pumping around $500 million into the economy to improve the people's standard of living.

Peaceful Protests in Saudi Arabia

In Saudi Arabia, Dozens of protesters arrested in Jeddah

Dozens of protesters have been arrested in Saudi Arabia's second biggest city after they protested against the weaknesses of infrastructure of Jeddah.

The protests were triggered on Friday after floods swept through the city, killing at least four people, and raising fears of a repeat of the deadly 2009 deluge, in which more than 120 people lost their lives.

On Wednesday, torrential rains caused flooding that swept away cars and downed electric lines in Jeddah.

The oil-rich kingdom lacks the basic necessary systems and structures to drain water out of the residential areas during a heavy rainfall.

Given infrastructure is this bad, I have a simple question: What the hell is Saudi Arabia doing with all the oil money it receives?

I also have an answer: It is going into the pockets of billionaire sheiks who have more money than they possibly know what to do with. The same could be said for multi-billionaires everywhere.

Saudi Protest Video




Saudi king vows support for Mubarak

Inquiring minds are likely pondering the wisdom of this action: Saudi king vows support for Mubarak

Saudi Arabia's King Abdullah ensures Mohamed Hosni Mubarak of his support amid nationwide protests against the Egyptian president's three-decade-long rule.

In a Saturday telephone conversation with Mubarak, Abdullah Ibn Abdulaziz Al Saud described the popular movements as "tampering with Egypt's security and stability in the name of freedom of expression,” AFP reported.

The Saudi king branded the protesters as "intruders" and said, “Saudi Arabia stands with all its power with the government and people of Egypt."

The comments came after a Human Rights Watch report lambasted Riyadh earlier in the week for mistreatment of women, foreign labor and the Kingdom's Shia minority.

There is widespread approval among Arabs for the ouster of Egyptian President Hosni Mubarak. Offering support to someone who is clearly despised does not seem like a prudent move to me.

Reflections on Decades of Misguided US Policy

President Obama is attempting to play this from both sides as best he can. For more details on his phone conversations with Mubarak, please consider

1. Mubarak's Acts of Cowardice; Obama Calls Mubarak for 30-Minutes; Cell Service, Internet Total Shutdown; Anarchy in Cairo; How Long can Mubarak Last?


2. Egypt Calls in Army, Imposes Curfew; Mubarak Orders Ministers to Resign; US Puts Egypt Aid Under Review; Will the US Get this one Right?

It's important to note that I am not talking about mistakes in current US policy but rather misguided policy decisions over the decades.

• We supported a corrupt Shah of Iran and look at the results.
• We supported Iraq on the hopelessly flawed theory "the enemy of my enemy is my friend." There are pictures of Rumsfeld shaking hands with Hussein.
• We gave chemical weapons to Iraq.
• Our intelligence do not see the takeover of the US embassy in Iran coming.
• Our CIA trained Bin Laden to fight Russia in Afghanistan. Now we are hunting Bin Laden and fighting in Afghanistan.
• We have wasted trillion of dollars in both Iraq and Afghanistan and all we have to show for it is more enemies.

Contrast that that with our actions in Tunisia. We did not spend a dime, nor did our intelligence efforts even see it coming. Yet, in Tunisia, a protest by the people overthrew overthrew Tunisian strongman Zine el Abidine ben Ali.

Wall of Fear Comes Down

The La Times reports Fearless protesters challenge regimes around Middle East

Reporting from Tunis, Tunisia — A wall of fear has come down.

All across the Arab world, people living under the thumb of repressive leaders are rising up against the rulers who once seemed omnipotent.

They are using the Internet to network and spread the word. They are watching themselves on satellite television. They are drawing strength from the hyperactive energy of the frustrated young people dismissed and discarded by their governments.

It is a contagious spirit.

"It's like a transition moment in the Arab world," said Mohammad Abou Rouman, a political researcher at the University of Jordan, in Amman, where protests erupted Friday. "It's the influence of the Tunisian domino, and it will not stop. It will go to other Arab states."

The uprisings are having a ricochet effect across the Arab world. People are watching the events unfolding on television and Facebook and identifying with the people in the streets.

"I was with my friends on Facebook, and we encouraged each other," said Dali ben Salem, a 25-year-old intern in pharmacy in Tunis. "The solidarity helped me to face the fear."

And whether or not Egyptian President Hosni Mubarak manages to survive what one analyst called a political "tsunami" that is enveloping the Arab world, things will never return to normal, analysts said.

War of the Future

How much money did the US spend on misguided missile programs and misguided missile defense systems, only to be defeated by a group of hijackers with razor blades? Is there more of a threat from a suitcase bomb or a missile?

How much money do we waste keeping troops in 140 countries where they are mostly not wanted?

Please remember Bin Laden's primary objection to the US was that US troops were on sacred Arab soil. So why do we do it? What has it brought us but misery?

We have caused countless trillions of dollars of destruction in Iraq, and in Afghanistan. Sadly, the war in Afghanistan is no more winnable than the War in Vietnam.

Quiet revolutions by the people are the war of the future, and the only kind of war that makes any sense.

Please note that Tunisia did not cost US taxpayers a dime. We should not have wasted a dime to get rid of Hussein either. Iraq was not a threat to the US. Simply put, it was a matter for the Iraqi people to settle, not us.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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