Archive for the ‘Region: Middle East’ Category

S&P 500 P/E Ratio Still Below Long Run Average – Market Realist

Wednesday, February 27th, 2013

According to Market Realist’s senior financials analyst:

As the S&P 500 index approaches new highs not seen since 2007, the current market’s P/E is some 2 multiple points lower than in ’07 which means that stocks are not as expensive despite being close to making new highs. In concert with this more favorable valuation currently for stocks, we point out there is still ample cash on the sidelines that could be invested which could fuel even further gains for equities.

As the stock market approaches the all-time high for the S&P 500 of 1,565 which was hit on October 10th, 2007, we note that the current valuation of the S&P 500 in early 2013 is substantially cheaper than that high level made in ’07. This could mean further gains for stocks as investors continue to adjust their asset allocation. The current day’s market level of 1,507 represents $108 in all S&P 500′s company’s earnings per share (EPS) resulting in a price to earning’s ratio of just 13.9x. This $108 in EPS for the index currently is a much improved number from the earnings level expected in 2007 which was only $95 per share. This valued the market at 16.5x earnings at the time in 2007, or over 2 multiple points higher than the current valuation now.

For the full article, please follow the link below: Market Realist S&P500 P/E Ratio Below Long Run Average

Video: Libyan Jet Shot Down by Rebel Artillery, Brent Crude Oil Futures Unchanged

Saturday, March 19th, 2011

The video below (LA Blog Only) shows Rebel artillery taking out a Libyan fighter, after the ceasefire was announced and crude fell $2.00 on Friday.  It is not surprisingly that Qaddafi did not honor the ceasefire after killing thousands of his own people in the weeks prior to the incident.  According to UN Ambassador Susan Rice, “Qaddafi’s attacks on Benghazi will not be tolerated by the Western community.”

A warplane was today shot down outside the opposition stronghold of Benghazi, as international leaders including David Cameron gathered in Paris to make final preparations to impose a no-fly zone over Libya.

The jet was observed over the city for some time before reportedly going down in flames, amid the sound of artillery and gunfire.

[youtube]http://www.youtube.com/watch?v=XvwISqREkaU[/youtube]


But Libyan authorities insisted that their forces were holding to a ceasefire announced yesterday and repeated an invitation for international observers to enter the country today to monitor it.

Deputy foreign minister Khaled Kaim told BBC Radio 4′s Today programme: “The ceasefire is real, credible and solid. We are willing to receive observers as soon as possible, even today.”

Rebel sources claim that military assaults by forces loyal to Muammar Gaddafi on cities including Benghazi, Misrata and Ajdabiya continued even after the ceasefire announcement.

US ambassador to the UN Susan Rice last night said the Libyan leader was already in violation of the United Nations Security Council resolution 1973, passed on Thursday, which called for an immediate end to hostilities and authorised “all necessary measures” short of foreign occupation to protect civilians.

Ms Rice told CNN that Gaddafi would face “swift and sure consequences including military action” if he ignores demands for a ceasefire.

Mr Cameron was today meeting US Secretary of State Hillary Clinton, French President Nicolas Sarkozy, UN Secretary General Ban Ki-moon and representatives of Arab states in Paris for talks on the implementation of the resolution.

RAF fighter jets were deploying to the Mediterranean to join the international effort to protect Libya’s people from aerial assault by Gaddafi’s forces.

Neither the Ministry of Defence nor Downing Street would last night confirm whether any RAF planes had set off on their mission, codenamed Operation Ellamy, or where they would be based in the Mediterranean.

Mr Cameron yesterday said that Typhoons and Tornados, together with surveillance and air-to-air refuelling craft, would be ready to leave within hours.

France’s ambassador to the UN, Gerard Araud told the BBC that today’s summit would be “a good moment to send the last signal” to Gaddafi.

“I guess that after this summit, in the coming hours we will go to launch the military intervention,” said Mr Araud.

In a joint statement last night, Britain, the US and France – supported by a number of unnamed Arab states – spelt out exactly what was expected from the long-serving Libyan tyrant.

“All attacks against civilians must stop. Gaddafi must stop his troops from advancing on Benghazi, pull back his troops from Ajdabiya, Misrata and Zawiyah, and re-establish water, electricity and gas supplies to all areas,” said the statement.

“Humanitarian assistance must be allowed to reach the people of Libya.”

And the allies warned: “These terms are not negotiable. If Gaddafi does not comply with the resolution, the international community will impose consequences, and this resolution will be enforced through military action.”

Speaking in the White House after conferring with congressional leaders yesterday, US President Barack Obama stressed that Britain, France and the Arab League would take a “leadership role” in enforcing the no-fly zone and said that there would be no use of US ground troops in Libya.

While he did not say what forces the US would be committing to the operation, he suggested some American military assets would be deployed in an “enabling” role in support of the Europeans.
“We will provide the unique capabilities that we can bring to bear to stop the violence against civilians, including enabling our European allies and Arab partners to effectively enforce a no-fly zone,” he said.

Mr Cameron insisted Libya would not be “another Iraq” and there would be “no foreign occupation”.

“The central purpose of all this is clear: to end the violence, protect civilians and allow the people of Libya to determine their own future, free from the brutality inflicted by the Gaddafi regime,” he told the Scottish Conservative conference in Perth.

Britain was committing itself to military action “at a level that matches our resources, in alliance with other countries, with the full authority of the United Nations Security Council and in accordance with international law”.

“We will provide the unique capabilities that we can bring to bear to stop the violence against civilians, including enabling our European allies and Arab partners to effectively enforce a no-fly zone,” he said.

But Libyan authorities insisted that their forces were holding to a ceasefire announced yesterday and repeated an invitation for international observers to enter the country today to monitor it.

Deputy foreign minister Khaled Kaim told BBC Radio 4′s Today programme: “The ceasefire is real, credible and solid. We are willing to receive observers as soon as possible, even today.”

Rebel sources claim that military assaults by forces loyal to Muammar Gaddafi on cities including Benghazi, Misrata and Ajdabiya continued even after the ceasefire announcement.

US ambassador to the UN Susan Rice last night said the Libyan leader was already in violation of the United Nations Security Council resolution 1973, passed on Thursday, which called for an immediate end to hostilities and authorised “all necessary measures” short of foreign occupation to protect civilians.

Ms Rice told CNN that Gaddafi would face “swift and sure consequences including military action” if he ignores demands for a ceasefire.

Mr Cameron was today meeting US Secretary of State Hillary Clinton, French President Nicolas Sarkozy, UN Secretary General Ban Ki-moon and representatives of Arab states in Paris for talks on the implementation of the resolution.

RAF fighter jets were deploying to the Mediterranean to join the international effort to protect Libya’s people from aerial assault by Gaddafi’s forces.

Neither the Ministry of Defence nor Downing Street would last night confirm whether any RAF planes had set off on their mission, codenamed Operation Ellamy, or where they would be based in the Mediterranean.

Mr Cameron yesterday said that Typhoons and Tornados, together with surveillance and air-to-air refuelling craft, would be ready to leave within hours.

France’s ambassador to the UN, Gerard Araud told the BBC that today’s summit would be “a good moment to send the last signal” to Gaddafi.

“I guess that after this summit, in the coming hours we will go to launch the military intervention,” said Mr Araud.

In a joint statement last night, Britain, the US and France – supported by a number of unnamed Arab states – spelt out exactly what was expected from the long-serving Libyan tyrant.

“All attacks against civilians must stop. Gaddafi must stop his troops from advancing on Benghazi, pull back his troops from Ajdabiya, Misrata and Zawiyah, and re-establish water, electricity and gas supplies to all areas,” said the statement.

“Humanitarian assistance must be allowed to reach the people of Libya.”

And the allies warned: “These terms are not negotiable. If Gaddafi does not comply with the resolution, the international community will impose consequences, and this resolution will be enforced through military action.”

Speaking in the White House after conferring with congressional leaders yesterday, US President Barack Obama stressed that Britain, France and the Arab League would take a “leadership role” in enforcing the no-fly zone and said that there would be no use of US ground troops in Libya.

While he did not say what forces the US would be committing to the operation, he suggested some American military assets would be deployed in an “enabling” role in support of the Europeans.

Mr Cameron insisted Libya would not be “another Iraq” and there would be “no foreign occupation”.

“The central purpose of all this is clear: to end the violence, protect civilians and allow the people of Libya to determine their own future, free from the brutality inflicted by the Gaddafi regime,” he told the Scottish Conservative conference in Perth.

Britain was committing itself to military action “at a level that matches our resources, in alliance with other countries, with the full authority of the United Nations Security Council and in accordance with international law”.

Saudi Day of Rage – Fri., March 11th

Thursday, March 10th, 2011

We have seen riots in Tunisia, Algeria, Egypt, Libya, Bahrain…and now Saudi Arabia?  All of these countries have fallen victim to internal unrest because of both their lack of basic freedoms, and wealth disparity between the rich and the poor.  All of the countries above are known to be wealthy oil nations, but more than 20% of the youth in each are unemployed.  Grain prices in these areas have more than tripled, and food inflation is causing unrest.  Shiites in Saudi Arabia have also claimed discrimination, as almost all senior businessmen and officials are Sunni Muslims, despite qualifications and experience.  This has helped drive Brent crude prices to as high as $118, crippling both emerging and developing economies.  Some are calling for a “day of rage” on March 11th, while others claim it will be delayed…

According to CNN, protesters in Saudi Arabia called for a “day of rage” Friday, though longtime observers of the kingdom remained skeptical that it would make a major impact. ”I don’t think any protests that happen tomorrow will be destabilizing to the country,” said Christopher Boucek, a Saudi expert with the Carnegie Endowment for International Peace.

Prominent blogger Ahmed Al-Omran said the Saudi government remains unresponsive to the streets. ”I don’t think they’re really in touch with the people,” he said. Still, he said, Friday’s planned protests could set the tone in Saudi Arabia for the next few months.

The Saudi government prohibits all kinds of public demonstrations. But more than 100 Shiite demonstrators defied that ban and rallied Wednesday in the eastern city of Qatif, calling on authorities to release Shiite prisoners. A sprinkling of women were among the protesters, said Ibrahim Al-Mugaiteeb, president of the Human Rights First Society. Police kept a watchful eye but did not intervene, he said. Earlier, Saudi authorities had authorized its security forces to “take all measures against anyone who tries to break the law and cause disorder.”

Last week, about 24 protesters were detained in Qatif as they denounced “the prolonged detention” of nine Shiite prisoners held without trial for more than 14 years, Amnesty International said. Police kicked and used batons to beat three protesters in what was an apparent peaceful demonstration, Amnesty said in a statement. ”The Saudi Arabian authorities have a duty to ensure freedom of assembly and are obliged under international law to allow peaceful protests to take place,” said Philip Luther, deputy director of the human rights group’s Middle East and North Africa program. ”They must act immediately to end this outrageous restriction on the right to legitimate protest.” There was no immediate reaction from the Saudi government to the Amnesty statement.

The protests in the majority Sunni kingdom have followed similar demands across the Arab world for more freedom and democracy. Rights activists have been advocating the right to protest for months in the kingdom but they have been denied permission to assemble. Lately, grass-roots ferment mirroring the unrest across the Middle East and North Africa has emerged, with a Facebook group calling for days of rage and Shiites taking to the streets. Activists have been calling for reform and the release of people jailed without charge or trial.

Amnesty said the recent detentions came a week after a prominent Shiite cleric, Sheikh Tawfiq Jaber Ibrahim al-’Amr was arrested after a sermon calling for reforms in Saudi Arabia. He was released without charge Sunday. Most of the protesters are believed to be held in a police station in Dhahran, an eastern city. Among them are activists who have protested arrests and discrimination against the minority Shiites.

“The Saudi authorities must investigate reports of beatings of protesters by security forces. They should also ensure that those detained are either charged with recognizable offences and tried fairly or released,” Luther said. ”While in detention they must be protected from torture and other ill-treatment and given regular access to their family, lawyers and medical staff.”

The Shiite activists in “prolonged detention” have been held in connection with the deadly 1996 bombing of a U.S. military complex in Khobar in which 20 people were killed and hundreds injured. ”According to reports, they were interrogated, tortured and denied access to lawyers together with the opportunity to challenge the legality of their detention,” Amnesty said.

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Oil Should Spike Higher Following Saudi Riots and Nigerian Elections in April – Report Attached

Thursday, March 10th, 2011

The following special report on oil (LA Blog Only, leverageacademy.com/blog) discusses the oil market, providing reasons to be bullish  on the commodity given unrest in the Middle East, Nigerian elections in April, and rising domestic consumption in oil producing countries, including Venezuela, Nigeria, and Iran.  According to the article, the rise of oil prices could easily cause the next recession.   In 2010, soft commodities outperformed energy, but that will certainly change given the political headwinds abroad and continued monetary easing in the developed world.  Therefore, the Bernanke “Put,” combined with political unrest will be to blame for continued sharp price increases in the energy commodity sector.

Emerging market demand, especially in China, which now consumes nearly 10mm barrels of oil per day, will also be driving the demand side of the equation.  Money supply in China was also up 19.7% in 2010, because of the rapid credit growth the country has experienced over the past 2 years.

On the supply side, Middle Eastern youth continue to riot, causing political unrest across the globe.  In Egypt, Libya, Morocco, Saudi Arabia, Tunisia, and Bahrain, youth unemployment is over 20%, which is a severe concern, given the oil wealth of these nations.  The Iran crisis could also re-emerge as the country continues to develop nuclear weapons.  As Iran is mostly Shiite, it poses a great threat to its Sunni neighbors, including Saudi Arabia.  Major risks in the area include that the Straights of Hormuz and Malacca could be blocked in the Middle East if major riots break out.  These two passages account for 32 million barrels of crude transport per day.  The Straight of Hormuz alone carries 33% of oil transport by sea.  Furthermore, one should question how much Saudi Arabia can increase supply, as the country overstated its oil reserves by nearly 300 billion gallons in 2010.  Even if it does increase supply, how will this supply be transported to the West if passages are blocked?

There has not been one year in recent history where Nigerian elections have not posed a threat to the country’s oil supply.  Elections are often bloody, and there is no reason for the upcoming 2011 elections being held in April to be different.

To make things worse, the IEA increased its oil demand forecast by 1.6%.

On December 6th, Brent futures were traded in backwardation for the first time in two years, which means that futures with shorter maturities are more expensive than those with longer maturities (similar to an inverse yield curve).  Backwardation occurs in tight markets, whereas contango occurs when there is oversupply.

What will be the effect of these changes in the oil supply/demand equation?  Well, an increase in oil price tends to affect the economy with a time lag of at least 4-6 months.  An increase an oil price of $10 would cause GDP to fall by 25 bps and S&P earnings to fall by $3.00.

According to the IEA, 4.1% of GDP was spent on oil consumption in 2010.  A sustained price above $100 would mean that the percentage would increase to 5%.  Oil at $120 would mean a percentage increase to 6%, which would be devastating.

Special Report Oil March 2011

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Chavez is the New Mother Theresa?

Thursday, March 3rd, 2011


Since when can Chavez promise world peace?  The dictator in Venezuela has confiscated billions worth of private interests, has nationalized industries, and has ruled with an iron fist over his country for years, exploiting its oil wealth.  He has done so poorly, that he has had to de-value his currency multiple times, despite the oil revenue Venezuela generates.  In an interesting turn of events, Chavez made a call to another dictator, Qaddafi, calling for an end to the riots in Libya.  ”We want world peace!” he said.

Did Chavez win here, where Obama, the UN, and the  entire developed world failed?  Did WTI crude oil fall from $103 to $101 on Chavez’s remarks?  Of course not, it was temporarily overbought.  Let’s wait until the Rage Riots in Saudi Arabia on March 11th to see oil’s true color.  (Beware the ides of March? Unfortunately, doesn’t fall on the same date)  Here is a response from the Arab league:

“A proposal by Venezuela’s president to solve the current crisis in Libya does not include a clear plan, Hisham Youssef, assistant Arab League secretary, said on Thursday.

On 17 February, a popular uprising erupted In Libya against the regime of Libyan leader Muammar al-Qadhafi, who has been in power for 42 years. Thousands of protesters have been reported dead during the clashes with pro-Qhadafi forces.

President Hugo Chavez had suggested an international mediation delegation of representatives from Latin America, Europe and the Middle East be sent to Libya in a bid  to hash out a peaceful resolution through negotiations between protesters and Qadhafi’s regime.

Youssef said Venezuela’s foreign minister phoned Arab League Secretary General Amr Moussa to introduce Chavez’s proposal and that Moussa described the ideas as vague.

“There were no definite ideas, we need to know the basis for the suggested negotiations and where to start them”, Youssef told Al-Masry Al-Youm.

Youssef said the Arab League’s stance on the Libyan crisis was expressed on Wednesday during a meeting of Arab foreign ministers. “This crisis should be handled in  a way that responds to the aspirations of the Libyan people, and not only from a security perspective,” he said.”

So, Chavez certainly our new Mother Teresa.  In honor of this public servant, here is a short biography below:

Mother Teresa (26 August 1910 – 5 September 1997), was a Catholic nun of Albanian ethnicity and Indian citizenship, who founded the Missionaries of Charity in Calcutta, India in 1950. For over 45 years she ministered to the poor, sick, orphaned, and dying, while guiding the Missionaries of Charity’s expansion, first throughout India and then in other countries. Following her death she was beatified by Pope John Paul II and given the title Blessed Teresa of Calcutta.

P.S. WTI crude is back at $102.50 at 10:25 PM EST, March 3, 2011.

Rebel Libyans Get Ready to Attack Tripoli

Sunday, February 27th, 2011

Yesterday, I saw at least 600 New Yorkers with the rebel Libyan flag protesting in Times Square…It has been weeks since a semi-deranged Ghaddafi/Qaddafi/Khaddafi/Kadafi waged war on his people.  With tons of mustard gas in storage and hired mercenaries being paid $2,000/day to open fire on women and children, it surprises me that the man has not yet been deposed.  Western Libya is now in the hands of rebels, who also control Zawiya, the third largest city in the country, miles away from Tripoli.  There are 6 check-points between Zawiya and Qaddafi, and the dictator seems to be getting nervous that an attack is being planned.  This weekend, he announced $400 awards for all Libyan citizens and interest-free loans for the purchase of apartments.  If the man really cared about his people, he would have acted before 850,000 barrels (of 1.6mm) of daily oil capacity was shut down by foreign interests, €20 million of his assets were frozen in the U.K., and 90% of his 45,000 man army left his control.

The streets of Tripoli are deserted, as citizens fear being shot out in the open.   They hide in their homes as their food reserves dwindle…many without cell phone or internet service.  And this is the 21st century?  The per capita GDP of Libya is about $12,000, but most don’t realize that most of this is in the form of oil revenue captured by the government.  With soaring commodity prices, many young Libyans are hungry and unemployed.  They are leading the attack on Qaddafi, and they don’t want/need any help: “They don’t want to be rescued, they don’t want any military intervention,” Garcia-Navarro reported from Benghazi. “They have done this themselves, they say, and they will get rid of Moammar Gadhafi finally themselves, as well.”

“Rebel forces in the city closest to Libya’s capital braced for a possible counterattack by troops loyal to Moammar Gadhafi on Sunday, as opposition leaders in the east announced a national council to serve as the face of the uprising.

Hundreds of opposition fighters with tanks and truck-mounted anti-aircraft guns occupied the center of Zawiya, about 30 miles west of the capital, Tripoli, according to The Associated Press. Gadhafi forces were positioned on the outskirts of the city, which is close to an oil port and refineries.

The tricolor flag of the former Libyan monarchy — now a symbol of revolution — flew from one of the bullet-riddled buildings in Zawiya. Hundreds of people chanted “Gadhafi out” and “Free, Free Libya.” Many streets were blocked by palm tree trunks or metal barricades, and an effigy of the Libyan leader hung from a light pole in the main square with “Execute Gadhafi” emblazoned across its chest.

There were at least six checkpoints controlled by troops loyal to Gadhafi on the road from Tripoli to Zawiya, the AP reported. Each checkpoint was reinforced by at least one tank, and the troops concealed their faces with scarves.

Militiamen and pro-Gadhafi troops were repelled last week when they launched attacks trying to take back opposition-held territory in Zawiya and Misurata in fighting that killed at least 30 people.

Gadhafi loyalists remain in control of the capital, Tripoli, which was reported to be quiet early Sunday, with most stores closed and long lines outside the few banks and bakeries open for business. Traffic in the city was close to its normal level.

Residents thronged Tripoli’s banks Sunday after state TV announced that each family would receive $400 as well as credits for phone service and interest-free loans to buy apartments.

Protesters Say They Don’t Want Foreign Intervention

A bloody government crackdown on the uprising that began nearly two weeks ago in the eastern city of Benghazi prompted the U.N. Security Council to slap sanctions on the regime Saturday. The resolution imposes a travel ban and foreign asset freeze on Gaddafi and his inner circle as well as a weapons embargo against the country.

It also demands an immediate end to violence that it says may amount to crimes against humanity and refers the regime’s crackdown on protesters to the International Criminal Court for possible prosecution.

“The text sends a strong message that gross violations of basic human rights will not be tolerated and those responsible for grave crimes will be held accountable,” U.N. Secretary-General Ban Ki-moon said after the unanimous vote by all 15 member nations.

NPR’s Lourdes Garcia-Navarro said the vote is being met with a more muted response among anti-government protesters in the liberated east of Libya. They welcomed the U.N. action, but feel the international community didn’t move until foreign nationals were evacuated out of the country. Protesters also made clear that they do not welcome foreign intervention in Libya.

“They don’t want to be rescued, they don’t want any military intervention,” Garcia-Navarro reported from Benghazi. “They have done this themselves, they say, and they will get rid of Moammar Gadhafi finally themselves, as well.”

A number of former top aides have deserted Gadhafi since the uprising began 11 days ago, and even the Libyan dictator’s Ukrainian nurse reportedly plans to flee the violence and return home.

Halyna Kolotnytska, 38, is joining senior government officials, diplomats and pilots who have left Gadhafi’s inner circle, according to Ukrainian newspaper reports citing Kolotnytska’s daughter Tetyana.

Ex-Justice Minister Chosen To Head Opposition

As Gadhafi’s control over the country dwindles, opposition leaders on Sunday appointed a former justice minister who defected in the early days of the uprising to head a national council. Mustafa Abdel-Jalil was chosen by the committees running the eastern Libyan cities now in the rebellion’s hands, according to Benghazi city council member Fathi Baja.

“It’s a symbol here, people say, of the fact that they will never acquiesce to be under Gadhafi’s rule,” Garcia-Navarro said in Benghazi, which rebels have described as the capital of “Free Libya.”

Abdel-Jalil, who resigned last week, has accused Gadhafi of ordering the 1988 bombing of the Pan Am flight that killed 270 people, mostly Americans, over Lockerbie, Scotland. The bomber, Abdel Baset al-Megrahi, was released from prison amid controversy and returned to Tripoli in August 2009 on the grounds that he was suffering from prostate cancer and would die soon.

A Libyan rebel fighter displays heavy caliber ammunition found at a military barrack in Benghazi on Sunday.

In an interview with The Sunday Times of London, Abdel-Jalil said the bomber threatened to provide evidence that Gadhafi masterminded the bombing and blackmailed the Libyan leader into securing his release. Gadhafi plowed $80,000 a month into a fund that paid for legal fees, lobbying and family visits to the prison, according to the Times report.

Secretary of State Hillary Clinton said Sunday that the U.S. is “reaching out” to Libyans trying to organize a post-Moammar Gadhafi government and is “ready and prepared to offer any type of assistance.”

“We are just at the beginning of what will follow Gadhafi,” Clinton told reporters en route to a U.N. meeting in Geneva.

Britain revoked diplomatic immunity for Gadhafi and members of his family, and Italy’s suspended a treaty with Libya that includes a nonaggression clause — removing a possible obstacle to Rome taking part in any peacekeeping operations in Libya or allowing the use of its military bases.

Italian Foreign Minister Franco Frattini said Sunday that “de facto suspension of this treaty, even without declaring it, is already a reality.” He said that when there is no government infrastructure, as is the case now in Libya, a treaty is suspended.

President Obama said Saturday for the first time that Gadhafi should step down.

“When a leader’s only means of staying in power is to use mass violence against his own people, he has lost the legitimacy to rule and needs to do what is right for his country by leaving now,” the White House said in a statement, summarizing a telephone conversation between Obama and German Chancellor Angela Merkel.

Clinton said the U.S. is revoking visas for senior Libyan officials and their immediate family members and that future applications from those blacklisted for travel to the United States would be rejected.

The U.S. tone shifted sharply on Friday after Americans in Libya were evacuated from the country by ferry and a chartered airplane.

Amid Evacuations, Some Left Stranded

The U.N. High Commissioner for Refugees reported Sunday that about 100,000 people, mostly foreign migrant workers, have fled over Libya’s borders into neighboring Tunisia and Egypt in the past week — creating a growing humanitarian crisis.

Egyptian people fleeing Libya race to get on buses at the Ras Jedir border post, near the Tunisian city of Ben Guerdane, on Sunday.

“We call upon the international community to respond quickly and generously to enable these governments to cope with this humanitarian emergency,” U.N. High Commissioner for Refugees Antonio Guterres said. The agency has begun to airlift relief supplies to Tunisia for the refugees at the border.

Western nationals have scrambled to get out of Libya as the level of chaos continues to rise. Germany’s foreign minister said the country’s air force has rescued 132 people during a secret military mission involving two German military planes that landed on an undisclosed runway in the Libyan desert.

In a daring rescue Saturday, British military planes entered Libyan air space to collect 150 people, Defense Secretary Liam Fox said. The C-130 Hercules planes, carrying Britons and other nationals, safely landed in Malta after picking up the civilians south of the eastern Libyan port of Benghazi, he said.

But NPR’s Garcia-Navarro reports that others in Benghazi haven’t been as fortunate.

“There are people who have been left behind, citizens of poorer countries who simply haven’t been able to get a boat out of here,” she said. “I’m talking about Bangladeshis, Somalis, and I’m also talking about sub-Saharan Africans.”

Tens of thousands of foreigners in Libya work at oil installations and construction companies, and many of them are sub-Saharan Africans. Some of them left stranded in Benghazi said they have been targets of violence because people believed that they were mercenaries sent in by Gadhafi to quell the unrest in the east.

“They tell terrifying stories of having to hide in the desert to avoid beatings and even killings,” Garcia-Navarro said.

Tunisia’s Prime Minister Quits

Tunisia’s embattled prime minister said Sunday that he will resign, bowing to a key demand of protesters after at least five people died in a groundswell of new unrest in this North African country.

Mohamed Ghannouchi, 69, was seen as a holdover from the old regime by Tunisians behind the so-called Jasmine Revolution that toppled autocratic President Zine El Abidine Ben Ali a month ago. Tunisia was the first Arab country to rise up in revolt against its rulers.

“I am not ready to be the man of repression, and I will never be,” Ghannouchi said in an appearance on state television. He did not say when his resignation would take effect.

He warned that unspecified forces appeared to be swelling to try to quash the move toward democracy, saying, “There are signs that a plot is being hatched to cause the revolution to fail.”

Deadly Clash Reported In Oman

Riot police in Oman clashed with pro-democracy protesters Sunday, killing at least one in a sharp escalation of tensions in the tightly ruled Persian Gulf nation.

Witnesses told the AP that police fired tear gas and rubber bullets at protesters in Sohar, about 120 miles northwest of the capital, Muscat. The deadly clash marked the second day of protests and suggests that a government shake-up by Oman’s ruler on Saturday failed to quell the tensions.

Protesters Reject Offer Of Talks In Bahrain

Thousands of people in Bahrain rallied peacefully in the capital city’s streets Sunday, rejecting the monarchy’s appeals for talks to end a nearly two-week uprising in the tiny island nation.

At least three processions paralyzed parts of the capital, Manama, and appeared to reflect a growing defiance of calls by Bahrain’s rulers to hold talks to ease the increasingly bitter showdown in the strategic island nation, home to the U.S. Navy’s 5th Fleet.

“No dialogue until the regime is gone,” marchers chanted as they moved through the highly protected zone of embassies and diplomatic compounds.

NPR’s Deborah Amos reported from Pearl Square, which has been that heart of the demonstrations, that people were headed to the office of the prime minister to demand his resignation.

Protesters shouted slogans against King Hamad bin Isa Al-Khalifa plastered fences with flyers denouncing security forces for attacks that have killed seven people since the first protests Feb. 14 inspired by revolts in Tunisia and Egypt.”

With reporting from NPR’s Lourdes Garcia-Navarro in Benghazi, Libya; Deborah Amos in Manama, Bahrain; Larry Miller in London; Tom Gjelten in Tunis, Tunisia; Sylvia Poggioli in Rome; and Linda Fasulo in New York. This story contains material from The Associated Press.

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The End of Mubarak

Thursday, February 3rd, 2011

Tunisia’s protests not only ousted their dictator president of 24 years, but spread protest movements throughout the region, to Egypt, Jordan, Yemen, Algeria, and Syria. After week long protests all throughout Egypt, Mubarak announced that he would not run for re-election, but would remain in office until September. Mubarak promises to make constitutional changes to limit presidential terms and broaden the field of candidates. However, Mubarak’s actions appear to be too little too late. Protestors and opposition leaders demand Mubarak’s immediate departure. The ongoing protests in Cairo have forced the government to close banks, trains, and schools, crippling the country’s economy. Furthermore, during his 30-year reign, Mubarak has remained the key US and Israeli ally in the region. His departure brings up issues of how a new regime will change the economic and political landscape of the region, thus affecting everything from the international wheat market, to peace in the Middle East.

SAN FRANCISCO (MarketWatch) — Egyptian President Hosni Mubarak said on Tuesday he would not run in upcoming presidential elections, agreeing to end his three decades of authoritarian rule after eight days of violent protests against poverty, deprivation and lack of opportunity spiraled beyond his control.

“I have spent enough time serving Egypt,” a somber and defiant looking Mubarak said in a televised address to the nation.

Mubarak is the second leader in the Arab world to be toppled by popular protest since the beginning of 2011. Last month Tunisia’s long-time dictator fled the country in the face of widespread demonstrations. Since then, protest movements have gathered pace in Jordan, Yemen, Algeria and Syria.

Mubarak’s speech marked an extraordinary turn of events for the Egyptian autocrat, who ruled the country for close to 30 years and was a key ally of the United States and Israel. His departure is likely to remake the region’s economic and political landscape with unpredictable effects on issues ranging from Middle East peace to the international market for wheat.

But even so, it was not clear that Mubarak’s offer to stand aside in the next election, currently scheduled for September, would appease protesters and opposition leaders who have been calling for his immediate departure and who greeted his speech with jeers and anger.

In a brief, televised address following Mubarak’s remarks, U.S. President Barack Obama said that as Mubarak steps aside, “An orderly transition must be meaningful, it must be peaceful, and it must begin now.”

Obama added, “I spoke directly to President Mubarak, he recognizes that the status quo is not sustainable.”

Peaceful transition

In his statement, Mubarak said he wanted a peaceful transition of power and pledged to spend the time ahead of the presidential election working for reforms, including constitutional change to limit presidential terms and widen the field of candidates.

“I have initiated the formation of a new government … which will respond to our young people’s demands and their anxieties,” he said.

Mubarak spoke after more than a week of protest wracked Egypt, killing as many as 300 people and paralyzing the country’s economy. Mubarak, who reacted initially by sending police into cities to battle with protesters, was eventually forced to accept that he could not control the situation.

A key moment came earlier this week, when the Egyptian Army said it would not fire on protesters who remained peaceful. Another appears to have come earlier on Tuesday when a U.S. diplomat informed Mubarak that the U.S. did not want him to run for re-election.

The speech was watched by thousands of protesters in Tahrir Square in central Cairo. Many of those people reacted angrily to the speech, shouting and repeating demands that Mubarak step down immediately, cable television channel CNN reported.

Mubarak’s opponents have been calling for political and constitutional reforms for years, and some protesters interviewed on CNN said they did not believe the president could be trusted to keep his word.

Saying that the protests had created a “a new Egyptian reality” Mubarak said the people had the right to peacefully protest and urged authorities to protect the Egyptian people. He also said authorities would seek out and punish looters

Egypt’s Protests Strain Market

Sunday, January 30th, 2011

Following in Tunisia’s footsteps, Egypt’s streets have been full of protestors demanding President Mubarak to step down and end his 30 year reign. Mubarak announced early Saturday that he had asked the country’s government to resign, and pledged to install a new government with a better democracy; proclaiming to be on the side of the people, willing to respect their freedom of speech as long as they protested peacefully. However, as protests continued, curfew was broken, and government vehicles were torched, Mubarak mobilized the army to control the crowds. The White House threatened to cut off its annual aid of $1.5 billion to Egypt if security forces continued to use violence to suppress protestors.

Egypt’s Suez Canal conducts an estimated 8% of global sea trade, carrying approximately 1.8 million barrels a day of crude oil and refined petroleum in 2009, according to the U.S. Energy Information Administration. U.S. crude futures rose to $89.43 a barrel, up 4.4% on Friday. Investors worry that uncontrolled protests could destabilize the already volatile region, and have an even greater impact on crude prices. The CBOE volatility index (VIX), used to gauge fear in the market, jumped more than 24% Friday and the Dow Jones Industrial Average fell 1.4 percent to 11,823.70 after a straight 9 week gain.

Stocks worldwide plunged the most since November, crude oil posted the biggest jump since 2009 and the dollar rose versus the euro after protesters posed the biggest challenge to Egyptian President Hosni Mubarak’s 30-year rule. Egypt’s dollar bonds sank, pushing yields to a record.

The MSCI All-Country World Index of stocks in 45 countries lost 1.4 percent at 4:59 p.m. New York time. The Dow Jones Industrial Average fell 1.4 percent to 11,823.70, preventing its longest weekly winning streak since 1995. Oil futures increased 4.3 percent to $89.34. The dollar appreciated 0.9 percent to $1.3611. Yields on Egypt bonds due in 2020 surged 22 basis points to 6.51 percent. Gold futures jumped 1.7 percent, the most in 12 weeks.

Egyptian protesters clashed with police throughout the country and into the night, defying a curfew and setting fire to buildings. Mubarak imposed the curfew after tens of thousands of marchers chanted “liberty” and “change.” After U.S. markets closed, Mubarak said he asked the government to resign. The demonstrations offset data showing that growth in U.S. gross domestic product accelerated in the fourth quarter.

“The unrest in Egypt has people concerned,” said Mark Bronzo, who helps manage over $25 billion at Irvington, New York-based Security Global Investors. “When it comes to the Middle East, there’s worries the unrest is going to spread. It has negative implications for the world.”

The Dow had to close above 11,871.84 to post a ninth straight weekly gain. Before today, it had risen 1 percent this week, supported by higher-than-estimated earnings. More than 74 percent of the 183 companies in the Standard & Poor’s 500 Index that reported quarterly earnings since Jan. 10 beat the average analyst projection, according to data compiled by Bloomberg.

Egypt overshadowed evidence the U.S. economy, the world’s biggest, is improving. GDP expanded at a 3.2 percent annual pace in the fourth quarter, up from 2.6 percent during the prior three months, as consumer spending climbed by the most in more than four years.

Investors who pushed the Dow above 12,000 for the first time since 2008 this week may be getting ahead of themselves. It surpassed that level the past two days. More U.S. stocks are trading above their 200-day average price than any time since April, when the Dow began a 14 percent slump. The cost to insure against S&P 500 losses with options has fallen to an almost three-year low.

The Dow may have surged too fast following its more than 2,000-point jump since August even as analysts forecast a third straight year of profit growth for the S&P 500, said James Investment Research Inc.’s Tom Mangan and BB&T Wealth Management’s Walter “Bucky” Hellwig. Mangan and BGC Partners LP’s Michael Purves see signs investors are too optimistic about the next few months.

Shares of Ford Motor Co. plunged 13 percent as the automaker said profit slid 79 percent. Amazon.com Inc. declined 7.2 percent after saying earnings may miss analysts’ projections. The Chicago Board Options Exchange Volatility Index, which measures the cost of insurance against losses in U.S. stocks, jumped 24 percent, the most since May.

The NYSE Arca Airline Index lost 4.3 percent after oil jumped. Any disruption to Middle East oil supplies “could actually bring real harm,” U.S. Energy Secretary Steven Chu said on a conference call.

The Suez Canal, which connects the Mediterranean and Red Seas, is located in Egypt. One million to 1.6 million barrels a day of oil and refined products moved north to Europe and other developed economies in 2008 and 2009, according to the Energy Information Administration, the statistical arm of the U.S. Energy Department.

Microsoft Corp. had the biggest drop in the Dow, retreating 3.9 percent, after a shortfall in Windows revenue raised concerns about demand. The slump drove the Nasdaq Composite Index to a 2.5 percent decline, the most since August. The S&P 500 fell 1.8 percent, the biggest decrease since Aug. 11.

The dollar and Swiss franc advanced the most in three weeks against the euro as a day of clashes in Egypt between police and protesters spurred demand for the safety of the currencies. Egypt’s pound traded at an almost six-year low against the American currency. Fitch Ratings revised the Middle East nation’s outlook to negative.

The Swiss franc advanced 1.4 percent to 1.2806 per euro. Egypt’s currency traded at 5.8575 per dollar after touching the weakest level since January 2005 yesterday. Turkey’s lira sank as much as 2.1 percent to 1.6171 per dollar, falling along with the currencies of other nations near Egypt. Israel’s shekel declined as much as 1.8 percent to 3.7141.

Treasuries rose, pushing two-year yields to a seven-week low of 0.54 percent. Yields on 30-year bonds had reached a nine- month high of 4.64 percent following the report showing U.S. GDP growth accelerated.

Gold futures for April delivery rose 1.7 percent to $1,341.70 an ounce, the biggest gain since Nov. 4. The metal climbed to a record $1,432.50 on Dec. 7.

Dubai World Restructuring Underway

Monday, March 8th, 2010

Dubai shocked creditors when it decided to postpone interest and principal payments in November of 2009.  Since then, Moelis & Co. has been working with creditors to settle on repayment.  Some creditors still expect full repayment, while others would take a haircut for immediate cash. Certain assets have been “ring-fenced,” such as DP World’s port business, which may list in the UK.  By ring-fencing the asset, it will not be available for creditors.

Amran Abocar of Reuters writes: “Dubai World could put its plan to a creditor coordinating committee that includes HSBC and Standard Chartered in London this week but was being delayed by efforts to value the assets of its Nakheel unit, builder of Dubai’s palm-shaped islands, bankers said.

While some of the 97 creditors expect to see the option of full repayment on the table, others are willing to take a “haircut” in order to get some money back fast, bankers said.

“We are not willing to take a big haircut … in that case we would go back to the committee to see what our options are,” said one Gulf-based banker, who asked not to be named. “Full repayment should be an option, timing is less of an issue.”

Dubai World shocked global markets in November, when it requested a standstill on its debt repayments and said it would come up with a restructuring plan.

Dubai has said the plan would be “fair” but a plan could propose extending debt maturities and Dow Jones said creditors may get as little as 60 cents on the dollar.

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“There are those banks who want to have the money immediately and take a haircut and those who can wait for a longer time,” said one banker at an Asian lender which is among the creditors.

“If one of the lenders doesn’t accept both options, they can go for a legal case. It’s in the interest of the bankers and the company there is some agreement.”

Despite those divisions, hopes of progress in the talks cut the cost of insuring Dubai’s debt against default and boosted Nakheel’s 2011 bond on Monday.

Dubai’s five-year credit default swaps (CDS) fell about 20 basis points to 488.7, their lowest level since Jan 28. They had risen as high as 654 basis points on February 15 after a report that Dubai World was mulling a two-part deal, including one that may repay lenders 60 percent of the outstanding debt over a period of seven years.

Dubai’s stock market index rose over 1 percent on Monday on hopes of progress in the debt negotiations.

“Investors are front-running a possible uptrend that could follow a Dubai World announcement,” says Mohammed Yasin, Shuaa Securities chief executive.

“This should continue for a while. Volumes are low, but it’s not that there’s no money around, just that it is waiting for an outcome (on Dubai World) to provide some clarity.”

RING-FENCING ASSETS

Dubai World has ringfenced key assets from its restructuring plan including ports operator DP World, which has said it may seek a secondary listing on the London Stock Exchange.

A report on Sunday said DP World may offer new shares to shareholders and Dubai World could sell part of its 77 percent stake as it bids to become part of the FTSE 100 share index.

The move would help boost DP World’s liquidity and raise the stock’s free float shares to 35 percent.

Bankers said Dubai World’s debt restructuring plan would not include a proposal to raise capital or contain any surprises like Abu Dhabi’s last-minute bailout in December, which allowed Dubai to repay Nakheel’s maturing Islamic bond.

“It’s more of a local issue than a global issue now because the news is out, people know they want to restructure,” said a European fund manager, who used to hold Dubai World debt. “Given that they paid out on Nakheel in December, creditors will be looking for full payment on the other bonds.”

But a source familiar with the matter said last month that the Nakheel bond maturing in May was unlikely to be repaid.

But Dubai’s debt crisis is still causing ripples around the region. Moody’s downgraded seven Abu Dhabi government-related entities late last week, due to the absence of an explicit, formal guarantee of government backing.

Abu Dhabi, the wealthiest emirate in the seven-member United Arab Emirates federation and home to most its oil, dismissed the downgrade, saying it had the money to meet its commitments to the firms, especially three which are wholly state-owned.

Major creditors to Dubai World also include Bank of Tokyo-Mitsubishi, a unit of Mitsubishi UFJ Financial Group, Lloyds and Royal Bank of Scotland, Emirates NBD and Abu Dhabi Commercial Bank.”