A Look At No POMO Friday As Saudi, Yemen, Kuwait And Bahrain Brace For Protests
Newsflow tomorrow is going to be heavy as Saudi, Yemen, Kuwait and Bahrain all prepare for protests. And if today's actions are any harbinger of what to expect, there will be serious unrest, quite possible turning violent even lethal. The wildcard still continues to be Iran, also a hotbed of recent protest, which has so far not made much noise about the crackdown on Shi'ites in the wealthy Saudi kingdom. Reuters summarizes what to look forward to: " Arab uprisings that have spread to the conservative Gulf region face a crucial test this week in Saudi Arabia where activists have made unprecedented calls for mass protests against the kingdom's absolute monarchy. Protests are planned in other Gulf countries such as Yemen, Kuwait and Bahrain on Friday, the region's weekend. The time after Friday prayers has proved to be crucial in popular uprisings that have brought down Tunisian and Egyptian rulers who once seemed invulnerable. More than 32,000 people have backed a Facebook call to hold two demonstrations in the country, the first of them on Friday. Saudi police dispersed a protest by a Shi'ite minority in the OPEC member's oil-producing Eastern province near Bahrain on Thursday with one to four people wounded as shots were heard, witnesses said." Furthermore, as we disclosed earlier, the Fed may have made a major error by not conducting a market stabilizing POMO tomorrow - arguably the day it will be needed more than ever. Those so inclined are urged to put on some fat tails insurance ahead of tomrrow's events which will most certainly result in some very violent swings in either direction.
"What the regime is worried about is setting a precedent for protests, that when people have problems they're going to feel more comfortable and more willing to take to the streets," said Shadi Hamid, an analyst with the Brookings Institute in Qatar.
Washington -- which has buttressed the Gulf dynasties as a counterbalance to Iran -- raised the stakes in comments this week calling peaceful assembly a universal right that must be respected even in a country that claims unique status as an Islamic state like Saudi Arabia.
Foreign Minister Prince Saud al-Faisal slammed "foreign intervention" in a news conference on Wednesday that seemed to highlight the problems facing a family that monopolises political life in a country named after them.
"The called-for reform does not come via protests and (the clerics) have forbidden protests since they violate the Koran and the way of the Prophet," said Prince Saud, who has occupied the foreign minister portfolio since 1975.
And while the Saudi regime still has the funds to continue attempting to bribe its population into loving it, other countries are less fortunate:
The protest movements hit populous Yemen a month ago and spread to the Gulf states where dynasties who secured their rule in colonial times and have bought their people's acquiescence by dispensing petrodollars.
Bahrain has been the most vulnerable. Majority Shi'ites who resent domination by the al-Khalifa dynasty have staged pro-democracy protests and analysts say Saudi pressure has been heavy on Manama to stamp them out.
This week hardline Shi'ite groups formed an alliance to ditch the monarchy and turn Bahrain -- an island state whose rulers look to Riyadh for support -- into a republic. They are planning a march on the royal palace on Friday.
Yemen is also set for an escalation after opposition groups, who have held pro-democracy marches for the past month, rejected veteran ruler Ali Abdullah Saleh's offer of reforms on Thursday.
A small number of Kuwaitis held protests this week, while activists and intellectuals in the United Arab Emirates petitioned the rulers for democratic elections. Last week Omanis clashed with police over jobs and corruption in government.
Several Gulf rulers seem to hope more money will solve their problems.
Saudi King Abdullah has vowed to distribute some $37 billion in handouts to students, the unemployed and other low-income Saudis via a series of pay bonuses and benefits announced as he returned in February after a three-month absence for medical treatment.
Gulf Arab oil producers launched a $20 billion aid package on Thursday for poorer Gulf countries Bahrain and Oman.
"For most of us, it's not about money, it's about having a share in our government," said Mohammed al-Mansoori, a rights activist in the United Arab Emirates. "In other places people have dignity, here, people don't."
As we have said previously, the market will be far more surprised by events out of Europe before this month is over, as that is where the real time bomb continues to tick.
We will follow tomorrow's events early so grab your popcorn.
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