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Saudi Stock Exchange Plummets 6%
Not many exchanges are open on Saturday. But the one that matters in a contagionary light sure was. And the drubbing it took was not pretty. "Saudi Arabia's stock exchange tumbled by over 6 percent on Saturday,
setting the stage for other regional markets to drop as concerns mounted
about the violent protests in Egypt. The Tadawul All Shares Index fell 6.44 percent to close at 6,267 points.
The market in Saudi Arabia, where the start of the work week is
Saturday, was the first to react to the violence in Egypt and the drop
in the TASI offered a window into the potential battering that could
emerge when other regional markets reopen on Sunday. On the Saudi market, there were no gainers as investors sold off holdings. Hit hard was
Sabic, one of the world's largest petrochemical companies and the
largest publicly traded firm on the exchange. Sabic's shares fell 8
percent, closing at 97.75 Saudi riyals." And this is just the beginning. If there are any further rumors (or confirmed sighting) of protests in Jeddah and elsewhere, regional markets will go bidless, oil will go offerless, GETCO and other NYSE SLPs will go bankrupt in their attempt to keep the stock market alive, and Bernanke will just go, once the entire world realizes that Genocide Ben, which is what ZH has been calling him for quite a while now, is really much more appropriate an appellation for the man who gives a bad name to helicopters.
From the AP:
"The fall is due to sentiment about what's happening in Egypt, and also in the US because the Dow went down" on Friday, said John Sfakianakis, chief economist at the Riyadh-based Banque Saudi Fransi-Credit Agricole Group.
"You have some collateral damage which is related to investors .... who have exposure in Egypt, and are trying to hedge that exposure by selling down their positions in Saudi Arabia," he said.
Egypt's stocks exchange canceled its start-of-week session on Sunday, and the country's banks were to remain closed following the weekend, Egyptian state television reported. Some banks in Cairo had been looted on Saturday as the violence entered its fifth day.
The protesters have demanded President Hosni Mubarak's ouster and measures to deal with the crippling poverty in the country, rampant corruption and the growing disparity in income distribution.
The rioting — inspired by similar protests in Tunisia two weeks earlier — prompted Mubarak to ask his cabinet to step down. But that move appears unlikely to significantly allay the anger of Egyptians who argue that the 82-year-old leader of the Arab world's most populous nation is sorely out of touch with their daily lives.
The violence sent Egypt's benchmark index tumbling almost 17 percent over two days ending Thursday, and analysts expect that the unrest will fuel another plunge both in Egypt and in regional markets which are slated to reopen on Sunday.
"The momentum is there," said Sfakianakis, predicting that regional markets drop.
"There's no reason to expect the Saudi market to go up because the general sentiment is sell-off and wait- and-see rather than sell-off and immediate buying," he said.
On the other hand, once Ben sends his plunge prevention emissaries to Saudi, and the exchange starts the same endless meltup only reserved for the US stock market, at least the silver lining will be that Chinese fraud companies, about 99% of them, will commence IPOing in Mecca and finally force the US housewife momo chasers to go cold turkey on 100x beta stocks that only trade up on short covering sprees.
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This will kill Amazon NFLX and IBM sales sac off. Buy blood in the streets?
In April.
The most devastating blow the Mubarak government has thrown was not tear gas and rubber bullets; it was shutting down the Internet.
http://www.hedgefundlive.com/blog/egypt-the-stock-market-and-yoga
This is not good, because through some geographical anomaly, the Saudies have OUR oil.
----------------------------------
New futures trading room using ThinkorSwim opening soon.
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I agree with Harry. Panic selling by the small players at the start. And then JPM, PPT, HFT, et al buying the dip all day long. Easy money for them.
North & South Korea were practically ready to start WW3 and the market barely flinched. This stuff in Egypt is nothing compared to that.
FRI was the largest volume selloff for SPY in 6mon. $VIX +24% in 1 day? Oh please. Talk about overdone.
Yes we're due for a correction, but I don't see it happening on Mon-Tue.
Fine, sold to you.
Yeah, but this situation directly threatens oil transportation/prices, does it not? Now, that's messing with a whole other cog in the machine. Not just some saber rattling.. countries need oil. What is your take on that with regards to Suez?
I wonder if the people there would prefer a more Islamic style of government-or if they are just mad because they are hungry or both---or something else. I hope the people get what they need. Hunger is very serious.
IMHO from first hand experience the level of political and economic frustration in the Arab Republic of Egypt is the primary motive. If the Muzzies gain control of the opposition it will be less from groundswell and more from intrigue.
bang da
burka...
If Murabek give up and leaves, then the damage could be contained on Monday. But if he continues to dig in, then we could have a fast and quick meltdown, maybe even a "flash crash".
Like I said, the XLF and XRT don't look too bad, but a gap down on Monday will instantaneously turn these two charts bearish with breakaway downside gaps.
Of course, any gap down will probably be filled when the PPT steps in to start a short squeeze based on some reassuring "words" out of Bernanke promising more QE if necessary.
The problem is the value of fiat, it is not which oilgarch sits on the face of the people in protest. You think the CIA VP lackey will change anything?
It could go down, but, then again, it could go up.
Can we have GS employee disclosures here, please?
C'mon Robo, make a decision. Straddling the fence now is going to give you crotch rot.
>>
This stuff in Egypt is nothing compared to that.
>>
You do not understand that your entire life is defined by oil. Until you do, the world will appear to you through the wrong prism.
There is not a single mention--anywhere--of protests in Jeddah or Yemen.
This is wishful thinking on ZH's part for being wrong for two years.
If you think the evil empire will let the market tank over Egypt you are mistaken.
btw: I fucking hate the banks.
Very much agree with just about all your points, brokenarrow. I don't quite know what you think ZH was wrong about these last two years. But I's like to hear it.
People really should be looking at Jeddah and Saudi Arabia in general. If the protesting spreads there and the royals get run out of the country-- there will be some major issues.
At that point, the evil empire will throw everything aside to protect the flow of oil. No amount of money printing will help (and may hurt) if oil pops to $160 overnight. And our own military gets involved on Saudi soil. Whatever it takes.
As it stands, what's happening in Egypt certainly has effects in the regional. I wouldn't be surprised to see a relief rally on Monday. But were far from seeing the end of this, I'm afraid.
How you ever managed to get signed up on ZH I don't know, but try to pull your head out of your ass and you might find some mention of these events that are just "wishful thinking."
What's a poor kitty, trapped in a ceiling, to do.
TZA Mon opening? Along with every momo out there?
Nope, AVL to the max, for me.
Why did it take fires on CNBS to get the Pig down?
Watch CNBS to see where the herd is being headed.
For those unfamiliar with the lay of the land in Saudi Arabia, here it is in a nutshell.
There are three major population areas in the country, separated by unbelievably bleak desert. The west coast is Jeddah, the commercial hub and former capital, and the gateway to the two holy cities of Mecca and Medinah (banned to non-Moslems). Jeddah is the traditional home to most of the major business families, the names of many of which are well known internationally (bin Laden, bin Mahfooz, Suleiman, Juffali, Kamel, Bakhsh).
In the center is the capital of Riyadh, near the birthplace of the al Saud family, and the heart of Wahabi land. Riyadh has no business being there, and has long been one of the most surreal creations on the planet, a man-made oasis in the middle of perhaps the most harsh climate on Earth. Budding architects cut their teeth on Riyadh in the 1980's. Imagine Disneyland without any smiling faces.
In the east is the Dhahran area, the heart of Saudi Arabia's oil producing lands. Unlike Jeddah and Riyadh, Dhahran/Dammam is majority Shi'ite Moslem, the same as Iran. This has always been a potential flashpoint, as Shi'ites in general are afforded second class status in Saudi, but steady work in the oil industry has kept many so pacified that the predominant threat in the Kingdom has switched from Shi'ite to fanatical Islam (largely Sunni in Saudi Arabia). The oil industry is especially vulnerable to terrorism because of the existence of gas oil separating plants (GOSPs), some of which are offshore, and almost all of which are difficult to guard. Then there are pipelines, which run unguarded through long stretches of desert.
Saudi also has two major industrial cities, Yenbu on the west and Jubail in the east, built during the 1980's to house most of the petrochemical facilities and some oil-loading docks. Yenbu is fairly isolated, though the much larger Jubail is just north of Dhahran.
In 1980 the population of the country was reported to be 4 million, of which 3 million were Saudi and the rest expatriate workers of every level. The majority of the expatriates were from Yemen, Pakistan and the Sudan. Others were from the major manpower exporting nations like the Philippines, Thailand and Indonesia. A sprinkling of Palestinians occupied administrative positions in commercial companies.
Today Saudi reports its population as 21.7 million, a staggering leap from the (probably poorly assessed) 4 million of 1980. Of this new total, a third are estimated to be expatriates.
When the population was small, and oil revenues relatively substantial ($30-40/bbl and 12-14 mmbbl/day in 1980), there were sufficient numbers of jobs and government subsidies to keep most people happy. The al Saud family has a certain degree of legitimacy because they founded the country, and in the past the substantial support given to royalty merely because of their royalty was more easily tolerated. Over time the self-image of the population has slowly morphed from being subjects of the al Sauds to being citizens of Saudi Arabia.
With unemployment skyrocketing, it remains to be seen if the ruling elite retains it legitimacy, especially since the country is near the first generational shift of power in more than fifty years.
always a nice read - thanks
Very nice stuff ; concise , interesting and informative .
http://fofoa.blogspot.com/2011/01/who-is-draining-gld.html
The new FOFOA post breaks down GLD prospectus. The most important point is that investors with more than 100,000 shares have right to physical delivery if they so wished. 100,000 shares is US $13 million. A couple of decent size investors ask for physical and the market moves heavily. This could be a game changer
Did you see this: http://edition.presstv.ir/detail/129692.html
If the Saudi Royal Family loads their private 747 jets with 100 tons of gold and flies out of the country will this be bullish or bearish for gold?
Depends whether the plane crashes in the ocean.
Those crazy Iranians. What will they dream up next?
So if SPX 1220 is hit by Tuesday midday or before does that make a dip (5P) and do you buy it or perhaps just sell puts (and look to get in a little lower or just pocket the premium)?
.
It appears that the Saudi PPT have been busy today. The TASI opened (30-Jan) at 6,246 and within 30 minutes shot up to 6,411. Currently trading at 6,426. 140 stocks in the index are higher and only 2 are lower. I'm glad whatever it was that caused yesterday's crash has been fixed so quickly.
Futures down pretty big already:
-169.00
Let's see if the POMO crew has enough fairy dust to keep the market from crashing.
Um, no, that's from Friday.
Nice one by Henry...whatever is being PUBlicised much in the MSM....u will know that there is something wrong with it....today i read in Shanky's blog comment's....that the signs by protestors in Egypt were in english.....funny...
http://www.henrymakow.com/
i also did not know that there was big political changes in Hungary....
But I thought "this time was different?!?!"
ES
Speculative Wolfe Wave target of 1201.
http://99ercharts.blogspot.com/2011/01/es_30.html
http://www.zerohedge.com/forum/99er-charts-0
put your Emerging Market money in Brazil. Hot Chixxx
unite n and s America economically through shared ownership and risk
and support your local cabaret !!!!!!
missed shorting this 6% (no idea Saudi Index open Saturday!) any chance we can replay this Monday so's i can catch up?