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Gulf Markets Melting Down: Saudi Arabia Plunges 7%, Dubai Sold
Following the end of a horrible week for petroleum importers (not to mention shale producers) despite WTI briefly dipping under $40 (wasn't this supposed to be great news for the US economy?) we have the start of a just as ugly week for the Persian Gulf oil exporters, whose Sunday market open can be described as a continuation of last week's broad risk carnage, and where Saudi Arabia, until recently the region's best performing market, is now down 10% for the year and down 30% compared to 12 months ago.
Appropriately enough following our overnight article lamenting the death of the Petrodollar, the WSJ opens with a description of "stock markets in the petrodollar-dependent Persian Gulf tumbled Sunday to multi-month lows, spooked by sharply lower oil prices and a global equities selloff on growing concerns about China’s economy."
Some examples:
Saudi Arabia, the Middle East’s biggest market, led the regionwide decline to finish the day nearly 7% lower. Dubai stocks dropped by a similar percentage, while regional peers Abu Dhabi and Doha’s markets both fell 5% each to extend recent losses.
Dubai stocks lost 7% to end at 3451.48, while its neighbor in the United Arab Emirates, Abu Dhabi’s market, dropped 5% to 4286.49. Qatar’s main stocks benchmark finished down 5.3% at 10,750. The Gulf stock markets are open for trading Sunday through Thursday.
Investors took a lead from Saudi Arabia, the region’s biggest economy. Its stocks closed 6.9% lower at 7463.32 after Fitch Ratings on Friday downgraded its outlook for the kingdom to negative from stable because of weaker oil prices.
The Saudi economy is heavily dependent on oil, which accounts for 90% of fiscal revenues, 80% of current account revenues and 40% of the gross domestic product, analysts at Fitch noted.
Visually:
By now, we have hammered the point that the price of oil impacts so much more than just the US "price at the pump" that even the most clueless hacks have admitted that plunging oil is not "unambiguously good" for the economy. In fact, it is downright bad for every economy whose confidence is reliant on asset prices, as the liquidation of oil forces the selling of other related assets to satisfy fiscal deficits and capital outflows (if anyone is still confused how this works, then read our article from last November which explained it all) in what a procyclical feedback loop, which was great when the cycle was on the way up and is anythig but now that the global commodity/asset/leverage cycle is finally deflating.
So what comes next? The margin calls, of course:
Not surprisingly, retail investors that still dominate most regional markets further cut their equity exposure, also in part because of margin calls as benchmarks fell below key support levels. Margin financing, or money borrowed for stock purchases, is often used by small investors in the region because of the relatively easy access to credit here.
“The multiple fears of China slowing down, a currency war, reduced oil-related income for regional governments to spend and a growing U.S. economy not being strong enough to withstand these new threats does not make for a pretty picture,” Al Masah Capital said
And just like in China and the US, investors need some reassurance, preferably from central banks and such, that the selling is now over.
“Regional buyers need a lot of conviction to step in front of this speeding train; however, valuations are becoming attractive, especially in Saudi and U.A.E., but these now need to be taken in context of a rapidly changing economic environment,” Al Masah added.
The WSJ concludes by noting that "several analysts agreed that the selling might be overdone, especially in some Gulf markets, but largely remain cautious." In other words, more cautiously optimistic "analysts" - just what CNBC needs ahead of its Sunday night Markets in Turmoil segment.
In the meantime we bring you... "Arab traders with hands on their heads (if not yet faces)"
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Drop the gas prices!
Can't.....we're heading into Labor Day.
How many innocent Syrians including Christian Syrians have the Gulf States murdered using ISIS, ISIL, NUSRA, Al Qeada? You know McCain's selfie pals and also friends of Nudelman and Obola.
Tis the end of the age of OIL...and thus the dollah too..
And after being a long time sceptic of Cryptosurrencies, yes they are totally tracked and owned by USA shadow establishment (what is not these days), but they will get a lot of the attention that metal heads (me included, Ag will do very well still, so many uses in this shitty environment just for purification, medical uses, Industrial and on and on) are hoping will go to metals.
Look at Greece as a classic example...Bitcoin ATM's sprouting...
Stop by and follow along if called...I'm doing my bit for kicking Big oil....where it hertz!
https://www.youtube.com/watch?v=FjmWeypvoQg
This isn't going to help the markets tonight if the NORKs are involved:
08.23 12:45 ET BREAKING NEWS: Huge Explosion at US Military Base in Kanagawa, Japan (Video)"This isn't going to help the markets tonight if the NORKs are involved:"
I wonder if it would be in retaliation for a recent, mysterious explosion at a Chinese port? It would be pretty easy for the Chinese to set the Norks up as the fall guy though, wouldn't it?
This is exactly what AJ Spiker was saying a few years back when he was GOP chairman in Iowa. They couldn't kick him out fast enough; that party needs the Christian vote until they have the chance to liquidate them.
People like Nudelman do not mind seeing christians piled high in body piles! They use their media to paint themselves as the world's most important life forms. The media would never report what they really do! Never!
Is iSIS Winning ??????????
Apparently...
While The Chief is on The Golf...
ISIS winning, apparently Not. They look stopped in their tracks and are barely holding on to what they have. You don't hear much anymore about cities taken. Actually they are having a hard time now getting funds. Having now to sell ancient art works that can be moved and only destroying those that can't. Oil sales being shut down and having to shake down the populace of those they control. Just another bunch of thugs sporting a web site of BS.
ISIS is "winning" until the US Military tells them the show is over! They are allowing this ISIS bullshit for now because it serves their means...
Their low oil price strategy is working great. Hope Saudi soverign is short their market
Barry has Putin against the wall now I bet!
National Houston-based retailer to close 90 storeshttp://www.bizjournals.com/houston/morning_call/2015/08/national-houston...
I always like to see vacancies increase right before rates go up after 80 months of historic lows. The giant farting sound you hear is CRE prices. Starting to feel like epic deflation prices are right around the corner. Finally.
Equity values propped up by leveraged share buybacks should drop like a rock. What is the effect on the S&P of all of the leveraged share buybacks the last few years? Seriously, is a 60% drop in the cards or something closer to 80%. Or do they prop it up at 40%?
Barry is up against a wall alright...the Great Wall! :D
CHINA CHINA CHINA
Why have oil prices collapsed?
CHINA/IRAN TRADE
Israelis don't want you to know that.
morons
Most people aren't even aware that Iran and China have made a deal......
Wow, that pretty much hexplains everything. I knew Iran was selling oil to India for gold, though.
Yay China for playing the Sunnis and Shiites against each other economically instead of militarily.
Seems their markets will mimic what oil has done over the last 6 months.
Something tells me that those Arabs better get start getting used to tents and no airconditioning once again.
It's days like this when I like to trot out this little gem:
http://www.sustainablecitynews.com/dim_ages-html/
Not my work, BTW.
Oh and before you all start dusting off your schadenfreude for a Sunday drive remember than camels don't run on gasoline, your Escalade does. As does your entire modern food and materials supply chain.
They wear some fancy white dresses. That should help cool em off.
The Arabs are O.K.! If oil revenues fall, the Arabs can always fall back on their...well...no...I guess the Arabs are screwed.
They can take a page out of Nauru's playbook when they ran out of guano. Good money to be made as a dumping ground for asylum seekers---or Greater Israel's Arabs.
500 x 1oz Silver Vienna Philharmonic Master Box €7,159.69
https://www.eurgold.eu/silver/500-x-1oz-silver-vienna-philharmonic-2015
404 Error - "Selling below spot and can't deliver shit."
https://www.eurgold.eu/silver/silver-coins/2015-british-britannia-silver...
If it's curtains for the Gulf this means oil is a relic.
Go long TSLA?
Electricity will be the next unaffordable relic.
Truth in word and deed was the last one.
But it'll be GREEN!!!
That's ok I already have enough stock in PT Barnum inc. I don't need two
100% of the Tesla Motors supply chain comes from manufacturers in China and is dependent on cheap and available fossil fuels, and 40% of the electricity (in the US) used to charge it is generated by coal.
I consider myself "green" in the economic sense (not so much in the political sense) and I ride a bicycle and I built my own electric chopper, but I would never own a Tesla because it is wrong.
+1. I saw plenty of scientists trying to invent the next great battery, but until one of their inventions costs less than 10x its weight in gold and lasts much more than a month I will not be holding my breath on renewables.
This coming from a former renewables researcher.
The "renewables" meme is another part of the ongoing corporate mind-fuck of America. They had "Saudi America!" when they wanted the rednecks to think tight-oil was going to make us net exporters again, driving around in our 2-ton Ford trucks on $1/gal diesel. And the same bunch of maggots had "we can run our BAU on renewables!" for the green-necks (I just made that up!) who wanted to drive around all smug in their hybrid SUV (which still runs on gas, what the fuck are they so smug about). The idea being to play each faction against each other but ultimately against their own inner terror at being deprived of something sacred, like driving their lame asses to spectator sporting rituals.
Well I guess those maggots are geniuses because the whole mind-fuck of America thing worked. Though in retrospect it was probably an easy sell. Everyone wanted to believe.
What do those 2 classes of 'necks' have in common? A 6 year mortgage on their rolling shrine. Self righteous debt slaves. End the FED!
Only appropriate since they'll soon be livin' in it.
That was savage!
Doesn't quite meet those requirements but the Velkess battery looks promising.
Something always looks promising. Like a carrot on a stick, out there always promising.
And that my fine friend is how you play this game of extend and pretend.
Aside from Bahrain, all those indexes are now in a bear market.
I wonder if the BlowHorn will even mention that.
What the fuck do you expect in a stock market where all the guys wear long dresses? Silly looking shit. Put some pants on you camel fuckers.
BTW, I've read camel meat tastes alot like chicken if you prepare it right. Soon, camel jerky may be one of thier only profitable exports.
SA will be exporting high-quality crude for another 50 years -- if not 100 years -- but beyond a certain point nobody reading this will see a single drop of it.
The question was never about getting at the oil. Every barrel of oil over there is going to come out of the ground. But once the US tight-oil play is dead the SA oil is going to sell at $500/bbl to rich fuckers who don't question the price -- like oh for example everyone owns a private jet or is willing to pay $15000 a seat to fly NY-to-LA -- and all us low-life pukes think we are entitled to our Sacred American Way of Life (meaning driving our obese asses to the WalMart for cigs and cheese nibbles twice a day) can go live under a bridge and weep continuously about how great it used to be.
Most of you people totally have your heads up yours asses. You know that, right?
And before one of you Bright Boys jumps in and says, But cougar at $500 per tight-oil is economical again! -- yeah it is but you won't see a drop of that either. No that US oil goes straight to the MIC and out onto the battlefield, because at $500 per the US corporate State will be fighting tooth and nail in every oil patch to get Haliburton in there drilling baby drilling. You want to drive around like in the good 'ol days then you can drive a tank mutherfucker.
At higher prices, it becomes economic to synthesize liquid fuels from coal. A cleaner alternative would be to use nuclear energy, but either way, there are alternatives that set a cap on the market price of petroleum products.
Thanks for playing along.
Edit: Guys guys why all the down votes? Can't you tell he was being sarcastic? I set it up, he knocked it in. We're like a comedy act see?
$500/barrel will nevah happen.
https://en.wikipedia.org/wiki/Coal_liquefaction
Probably at negative EROEI. If it burns in the turbine of an Abrams MBT they'll probably do it anyway, war being all about short term negative returns. But I don't see how that does any good for the average American motorist.
Bull. They'll be a net importer in 15 years, max.
Heard that before. Somehow I doubt it. The minute SA stops being the world's crack dealer is the minute they are fed to ISIS. They only become importers if they are consuming their own oil and then some. The House of Saud is mercantile in the extreme, they'll murder their own people before they allow themselves to become net importers. Murder or ship them to Europe on jihad. Send them to Mars who knows. They don't work in the oil fields, then they are oil consumers, then they are not needed.
The calculus here is really simple I'm pretty sure the Saudis have done the math.
The camel meat I've tried was dry, stringy, chewy, salty, and did not taste like chicken. Maybe the meat wasn't prepared right, but what I ate was a loooong way from chicken!
They probably fed you one of the humps; they can be awefully chewy and tough if you don't tenderize the hump meat in camel piss overnight:
http://metro.co.uk/2015/06/11/bad-news-for-anyone-who-likes-to-drink-cam...
Camel can't taste too much different than moose. Though I can't speak from personal experience in either case.
Moose tastes like it has horns. Camel doesn't. It's sublte, and an aquired taste, but once you know the difference there's no going back. Give those bearded motherfuckers one taste of moose and they'd all leave that desert shithole headed to Canada.
Not to be mean, but that entire comment just seems wrong somehow. We might have stumbled into some dark back alley of imprinted human existence here.
Moose tastes great!
and horse doesn't taste like anything, it just taste like horse.
<< Camel can't taste too much different than moose.>>
That's probably because their taste buds are different.
I never go to a stoning on an empty stomach.
I have had it, it's not bad.
Saudi to a Russian and Chinese...
I'd love to sell my oil in Rubles and Yuan but this guy in the "red, white and blue" suit with a gun to my temple is making the prospect for that business arrangement exceedingly difficult at this time!
Probably should have let Saddam have his way with SA in '91. A lot less oil profit would have gone to finance islamic terrorism if we had done that.
Sometimes, even with the best of intentions, when you set something in motion, the reality of unintended consequences, will rise up and slap you silly...
In 2008 people were perplexed when the markets dropped 500-600 points..When the markets start bleeding 1000-1500p you'll see what carnage means.
Scare the people at work. Bwahahahaha!!!
I am not happy it is going to collapse but being that it's inevitable I am going to try and enjoy watching some of the more belligerent morons get completely bitch slapped to the point that their retinas detatch. I figure it is always best to find a positive aspect to everything and there truly is always a silver lining.
What is the old saying? He who lives in glass houses.....
he who lives stoned should not glass thrown houses
No turn left unstoned.
He who stones his women should not complain when the sky falls on his head.
if you didn't stone your women you probably didn't get laid much in the 70's
That's enough from you, Bill Cosby!
"Too many days are left unstoned."
Jefferson Airplane DCBA 21
Tyler. This is off topic...but do you plan to keep your email alert request forever on the site? I had your emails, and realized that almost each time there was only the paywall...so much to satisfy my curiosity. So I have cancelled the unnecessary emails, but still get prompted to add my email to your mailing list.
This along with new commercial look and feel on your site is becoming a major turn off. Why would I want to read the recycled themes when I get harasshed while trying.
Best
Get Firefox if you don't already have it and get noscript and ad block. You won't even see that stuff
Safari is a default browser in my AAPL product. It works fine elsewhere, why would I want to use a different browser to read ZH stuff which is so predictable anyway.
Well, that was too harsh. ZH has its edge in showing stuff you might ignore otherwise.
Manage your own experience, or suffer. In the case of the latter you would count yourself amoung the 98% who don't know any other way.
if the asian markets melt down tonight, and the /es is tanking, pick what you think is a bottom and go long. the ptt will rig the gig and it will explode up on monday. just a word to the wise from a severly burned investor since 2007
The PPT will encounter more difficulty in stemming the flow of losses, thus not surprising that two back to back market declines. It will be interesting to see what happens Monday. Have the PPTs been able to shore up the levees over the weekend?
The longer it takes for the PPT to intervene,, the theory goes, the deeper they are are having to scrape the bottom of the barrel. Kind of like the water shortage out west. Having to dig deeper and deeper for the last gallon of water. But maybe el Nino will give a temporary reprieve.
Watching VIX skyrocket, no quick fixes for china, or europe, Tops in the equity market a month ago, and the Fed jawboning a hike; it seems like they are farther away from QE4 than they have been in a long time. They just stopped buying last fall. That would be a complete capitulation and panic button slam, to all of a sudden go from rate hike to rate manipulation lower.
One guy i follow says the Fed will hike when it is more embarassing not to hike than to hike. Which means 2017.
I think they are scraping the bottom of the barrel.
I think they will sit on their hands and watch.
Why has wahabi saudi got a stockmarket anyway? I thought muslims weren't supposed to gamble?
Off with their heads!
It's a den of thieves, led by Ali Baba, whose express purpose is to 'raid' assets from . . . others.
They are camel traders by heritage. Something like used car salemen.
That's a good point, gambling is also illegal in China....I guess they don't have to worry about their stock-markets so much then, eh?
I've been scouring my copy of 'The Communist Manifesto' lately (The REAL one, as per Marx and Engels) I couldn't find one mention of stocks, shares, bonds...
Or a single party government for that matter, or ANY kind of government...
But hey, the U.S. says all those commie bastards are bad, so I guess the 1848 document on Communism must be wrong, as is the American constitution...barborous relics!
The Communist Manifesto is literal truth. Just ask any resident of one of the world's few remaining worker's paradises.
Get ready for trillions in QE4.
The currency war is kicking into hyperdrive.
Wait, i thought qe4 had no effect. Arent we raising rates? :)
Long on China and Iran.
Short on everything US.
It's UN policy.
I'm no fan of doomsday talk, but in any case recommend Bill Holters page.http://www.silverdoctors.com/bill-holter-we-are-witnessing-a-credit-coll...
Also recommend Greg Hunter's page.
One groups doomsday is another groups opportunity.
Don't you believe in climate change theology?
Pope speaks to Congress next month, slave.
I work hard but I am fortunately not a slave neither mindwize nor workwize:)
That's why I recommend Bill Holter and Greg Hunter.
Greg Hunter has some pretty brilliant interviews on his page.
Go in peace, my friend .
What is happening with crude is a fine example of the effects of FRB sponsored malinvestment. What under normal circumstances should be good for the US economy winds up being bad because the shale producers are sucking on the Bernanke/Yellen tit and will crash and burn. Low crude prices are good for the real economy, but the shit will hit the shale oil fan and splatter everyone tnx to firehose Ben.
Fuck you Ben Bernanke
Low crude oil might indeed be good for the "real economy", but we haven't had any real economy here in US for quite a while now... The Matrix economy (which dominates the entire Western world nowadays) has different rules.
Oh, it is good for the real economy. But it is bad for petro-dollar recycle....aka credit creation. Without this credit creation, speculation dies (aka, the stock market).
Yes cheap credit during a recession can send wrong signals about the extent of the demand. China for example after 2010 became the larger share of commodity consumption before the stimulus of the planet wored off leaving China contracting commodity consumption taking along other countries with it.
And 10,000 baby-boomers in the US per day are retiring. Demand and consumption decreasing.
Squeezing the credit and consumption junkies.
Sooner or later the small banks in the "oil areas" like BOKF and CFR are going to get murdered.
Keep dropping, Insha'Allah.
The Neo-Feudal Master Plan:
http://winteractionables.com/?p=24280
Go Blankfein, get those bearded drag queens.
I remember Putin talking about "boomerangs" in regards to Western sanctions on Russia. Which society/country is more likely to come through and survive a slowing economy Russia or the Gulf States? I'd bet Russia and this could become a very big worry and risk for the Western powers.
True. Russia has a history of surviving hard times (watch Enemy at the Gates). The Arabs were riding camels and shitting in a hole in the sand until oil money allowed them to live in splendor for the last 50 years or so. So, yes my money is on Russia surving this and the Gulf States deteriorating in a complete hell hole over the next 10-20 years.
Everyone should say 'Fuck you Ben Bernanke' now and then, for beneficial mental and physical reasons..
Since none of us will get the opportunity to personally shit down his throat.
"Step in front of this speeding train"?! Seriously??
"Regional buyers" of Saudi Arabia, please wake up and react adequately...
denk-bubbles.com/sell
For those who didn't catch this earlier, Gerald Celente - Trends in the News - Market Melting Down. Celente explains the meltdown as good as anyone can. http://foxmuldar-conservative-thinker.blogspot.com/2015/08/gerald-celent...
Nice post. Gerald Celente will have an interview Sunday today on Greg Hunter's page usawatchdog.com
http://usawatchdog.com/hillary-in-deep-trouble-iran-nuke-side-deal-econo...
@foxmudder
Thanks for posting Celente. That was the best. LOL.
Thanks @Sailorgirl. Can't wait. Kept checking back on GH's to see who it would be today. Popcorn time.
The posting of that link was a bit premature. The interview will show up later sometime today . Enjoy the popcorn and the interview! :-) I think it will be really interesting.
Wish some kind soul would drop Bernanke/Yellen from 30,000 ft
Maybe we'll get lucky and they will fall out of the helicopter.
Maybe we'll get lucky and they will fall out of the helicopter.
saudi = smaller than aapl
It's not just the Arabs either. Israeli stocks were down four percent today.
World has only 38 years left of proven oil reserves. Some analysts say Saudi Arabia could be lying about proven reserves by as much as 40%. With countries like China and India consuming more oil each year the 38 number could easily be under 30. Tick tock. Tick tock.
http://www.worldometers.info/
Not saying you're wrong, but the arctic hasn't been too well explored. The Antarctic not at all. Plus idle fields in Iraq and Iran.
Then there's using the Fischer tropps, possibly powered by nuclear reactors, to convert coal into liquid fuels. Plenty of coal laying about
So yes, the world will run out of cheap oil, will run out of expensive oil later than that, and run out of all oil at some point. Could be I'm 30 years like you say, could be later than that.
Those dress-wearing guys are really into the Caitster...
Time for the Kraken...
https://www.youtube.com/watch?v=4D4tzx5UwdI
This may not be good for the GOLD price if they start dumping their gold. I'm thinking it might keep a lid on the paper price. _JOHNLGALT. By the way WHO IS JOHN GALT?