Sunday, February 20, 2011

Middle East, Ireland and Rick James

Middle East

The world has quite the week ahead of itself.  What is evolving in the Middle East is inspiring, sad and extremely explosive.  Tunisia was truly a microcosm of the global revolution now taking place.  Tunisia and Egypt fell far faster than anyone imagined and the same will be true with the coming Middle East revolution.  It is truly sad though to see the level of brutality governments will use to maintain power.  Hundreds have been killed this weekend and unfortunately that number will probably grow quickly.

Few, if any truly understand the Middle East.  With each passing day it is becoming even more complex.  On Monday we will see the Iranian navy pass through the Suez canal, Israel has threatened a response and Saudi Arabia is now surrounded by protests.  In Egypt even though the Mubarak regime has been toppled, banks still cannot open nor can the stock market.   The global economy cannot handle a shock event and should the Middle East explode as it appears it is headed, the effects on oil prices could be devastating.



Ireland

Friday we will see the Irish Elections and right now it appears Fine Gael and Labour will win a majority of the vote with Fine Gael possibly winning the 40% majority on their own. This will further threaten Irish bailouts and hopefully force losses upon senior bondholders.   It also appears the Irish banks are truly on life support right now as they are faced not only with falling assets prices but a growing run on deposits.

The global equity markets are completely ignoring geopolitical risks right now.  Just like the global revolution has evolved faster than anticipated, so to may be the repricing of risk in the capital markets.



Rick James

With all due respect to the late "super freak," what western star do you think Gaddafi, the modern "super freak" has modeled himself after?





Share/Bookmark

No comments:

Post a Comment