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Financial Crisis Hit Arab Nations
Old 10-26-2008, 02:35 PM   #1
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Financial Crisis Hit Arab Nations

After reading this, I shudder thinking what Monday morning will bring. By the way, I did not know the Arab Stock Markets run through the weekend. Obviously, we have been paying for their oil with our CDOs, backed by our innovative CDS's too. The whole world is mad at us... I may not venture outside the country for a while, not wanting to deny that I am a US citizen... Sigh...




From AP News:

Kuwait moved Sunday to prop up the country's second-largest commercial bank and scrambled to protect depositors at other domestic banks, dashing hopes the oil-rich Arab Gulf would emerge largely unscathed from the global financial crisis.

The central bank halted trading in Gulf Bank shares because of high derivatives losses, just a day after Gulf finance ministers said the region's banks were insulated against the liquidity crisis that has rippled through the global banking industry.

...

The Saudi stock exchange — the region's largest — fell by 8.7 percent Saturday and is down more than 50 percent since January. Saudi's benchmark Tadawul index closed down about 1.6 percent Sunday, while the Dubai Financial Market sank 4.7 percent, and Qatar's exchange closed down almost 9 percent. Kuwait's exchange was down 3.5 percent at closing.
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Old 10-26-2008, 02:48 PM   #2
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Most of these countries have done a poor job of diversifying their economies-they are still largely oil-only. The ones that did diversify chose to go into -- wait for it -- financial services. As it turns out, they chose unwisely.

Centralized planning from the top doesn't guarantee wisdom.
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Old 10-26-2008, 05:27 PM   #3
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Still, once the world emerges from this mess, and I am sure we will (don't think anyone knows when), will Wall Street regain the status as the world leading financial center? After what our bankers have done to the rest of the world? Several publications already talked about that. I don't know how it works out, but I'd rather stay clear of the danger zone. No financial stocks for me. Not a US one anyway. It would be false patriotism, more than any other example!
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Old 10-26-2008, 05:47 PM   #4
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Actually, Saudia Arabia never wants the oil price to surge as high as it did. Not because they love us. Hey, does the US sell cheap processors, airplanes, or whatever we still export, or do we charge what the market will bear?

They simply do not want the price to be so high that we would develop alternative energy!!! Despite the recent high oil prices, I do not want to be in their shoes though. What happens when their oil runs out, and it WILL. Back to camel riding? They've got nothing else, other than oil. Heck, they do not even have water!
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Old 10-26-2008, 05:55 PM   #5
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The middle east will need to transfer from a commodities based economy to a services based economy if it hopes to see continued growth as the availability and need goes down for oil (it still has plenty of time to do this, so I don't forsee this happening anytime soon, it will probably occur when alternative energy is starting to be used a primary form of energy in the developed nations). They certainly are going to need some way of bringing in money for the agricultural goods they need and I don't believe they will be able to compete with the manufacturer abilities of the developing nations. This will probably require a huge culture shift for the middle east from where they are now.
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Old 10-30-2008, 02:34 AM   #6
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[quote=NW-Bound;737860]By the way, I did not know the Arab Stock Markets run through the weekend.

Sunday is the beginning of the work week for most of the Gulf Countries. Traditionally, most Gulf Countries had a Thursday-Friday weekend. The U.A.E. broke rank and officially changed to Friday-Saturday in 2006. Since then, most other countries have followed suit except for Saudi Arabia.
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Old 10-30-2008, 03:01 AM   #7
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Originally Posted by plex View Post
The middle east will need to transfer from a commodities based economy to a services based economy if it hopes to see continued growth as the availability and need goes down for oil (it still has plenty of time to do this, so I don't forsee this happening anytime soon, it will probably occur when alternative energy is starting to be used a primary form of energy in the developed nations). They certainly are going to need some way of bringing in money for the agricultural goods they need and I don't believe they will be able to compete with the manufacturer abilities of the developing nations. This will probably require a huge culture shift for the middle east from where they are now.
Qatar, Bahrain, UAE and even Saudi Arabia are setting themselves up top be lowest cost chemical and NG derivative manufacturers. Dubai is a major banking center.

If they do things even half right they should be fine, because while the US and the rest of the West is bleeding cash for energy, the gulf states are catching that blood and making sausage.

If they are smart they won't let us burn all their crude. It can be the foundation and wellspring of a very long lasting petrochemical power center.

We are the losers. Our greedy and stupid bankers and investment bankers have torched USA as a financial center. Fortunately for us, the British are almost as bad.

Ha
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Old 10-30-2008, 03:40 AM   #8
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Oh dear. You mean our friends are having troubles... money troubles. What a shame.

The sooner we move toward energy independence the better.
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Old 10-30-2008, 06:55 AM   #9
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.... Obviously, we have been paying for their oil with our CDOs, backed by our innovative CDS's too. ...
Are you sure it's that "we have been paying for" - or could it be that "they have been buying" our CDO's?

If you look at it as the latter that makes them complicit in the scam & they deserve what they get, no? (Don't many of them study finance at our very own universities?)

Or was it unfair predatory buying of their oil by us?
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Old 10-30-2008, 09:06 AM   #10
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Energy independence--the worthless mirage that has driven a thousand soundbytes.
(or, "the worthless soundbyte that has squandered billions of tax dollars")
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Old 10-30-2008, 10:49 AM   #11
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I admit I wouldn't know how much of our CDOs they bought. This may be a bad assumption. I just do not want us to have to pay for oil with euro or some other currencies in the future. I do not know much about international currency movement, but being skittish in financial matters, I always think of potentially bad scenarios.

We will never achieve energy independence. Our wells are slowly running dry. We need oil for plastics, and all kind of petrochemicals I wouldn't know about. Oil is too valuable to blow it all out our exhaust pipes. Thank goodness our Canukistan friends up north got loads we have been buying from, and will be for some time in the future. We better be nice to each other.
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