Art Cashin On The Forgotten Geopolitical Risk

Tyler Durden's picture

No, not Italy, and certainly not Spain. Egypt.

From UBS Financial markets

Geo-Politics Still Ignored - Veteran traders have wondered for weeks about the markets whistling past a variety of geopolitical challenges. Yes! Yes! I know about Spain and Italy but they are potential financial crises not truly political ones.


A good example is the deteriorating situation in Egypt. The Muslin Brotherhood went back on it initial promise and backed a candidate for president. That raised the likelihood of a religious government and possible rule by Sharia law.


The ruling generals appeared to counter by encouraging a second Sharia candidate to possibly split that vote. Then they entered a law and order secular candidate to block a shift to religious government.


The courts (thought to be influenced by the generals) ruled several candidates eligible (to enable that strategy). Meanwhile, an election commission threw a wrench in the whole thing by disqualifying ten candidates.


As the political outlook disintegrates, the country is running short of both food stuffs and currency reserves. The world’s most populous Arab nation (and Israel’s next door neighbor) looks less stable each day.


And then there’s Iran.

But didn't America encourage this particular chain of events? After all, doesn't America know what is best for all?

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EscapeKey's picture


CAIRO (Dow Jones)--Egypt's foreign-currency reserves fell to $15.1 billion at the end of March, according to Egypt's Central Bank, further slowing the rate at which Egypt is losing its foreign currency.

Egypt's holdings of foreign currency decreased by nearly $599 million since February as Egypt's Central Bank has spent foreign cash to forestall downward pressure on the Egyptian pound.

Egypt has lost more than $20 billion of the $36.1 billion in foreign-currency reserves it held at the start of 2011.


johnu1978's picture

It's getting worse by the day!!!


Edible Plant Tours - Primitive Skills Classes

Spirit Of Truth's picture

Figure this one out.

Jan. 23, 2011 - Iran announces a naval flotilla will be sent to the Mediterranean Sea w/warships passing through the Suez Canal for the first time since the Iranian Revolution.

Jan. 25, 2011 - Egyptian revolution begins. 

Jan. 26, 2011 - Iranian naval vessels depart.

Feb. 6, 2011 - Iran's naval vessels dock at Jeddah, Saudi Arabia, the first time Iranian warships are permitted at a Saudi Arabian port since the '79 revolution given the poor relations between the states. 

Feb. 11, 2011 - Egyptian President Hosni Mubarak overthrown in an effective military coup (the anniversary of the Tehran revolt that overthrew the Shah). 

Feb. 22 - Iranian naval vessels pass through Suez Canal. 

Here's the big question mark. 

How did Iran know Hosni Mubarak would be overthrown such that there'd be an opportunity for Iranian naval vessels to pass through the Suez Canal? 

"While the Mubarak regime was in power, there was little possibility of Egypt permitting an Iranian naval task force to transit the Suez Canal."


ceilidh_trail's picture

Something to this? You really don't think this was random chance? Gee Wilikers...

LowProfile's picture


johnu1978:  "It's getting worse by the day!!!"



I think I need to buy a gun's picture

oMG REALLY? You have to be shitting me with this......the same negativity,,,,,,clearly egypt is on the mend

battle axe's picture

If Egypt adopts Turkey's constitution and keeps govt strictly secular, then everything would be good. But that might be wishful thinking. 

GetZeeGold's picture worry?


Oh regional Indian's picture

No no Get zee, be happy. And full of hope for change.

By the way, if you knew the etymology of freedom.......ze wabbit hole is deep and dark, like the woods on a snowy evening, or some such! :-O




CClarity's picture

I am no fan of Sharia law.  But the notion of multiple candidates, some aligned with strong religious views, doesn't sound all that scary - - - it sounds like the USA.  Probably the biggest risk to the USA lies within the USA.  Politically and economically.

LawsofPhysics's picture

Careful, government trolls tend to junk the truth, but you may be correct.  Don't forget;

Ignorance is strength,

War is Peace

Knowledge is Power,

and right now, power and possession are 100% of the law.  There is no question that the majority of that threat can be found in and around the beltway of Washington D.C..

jeff montanye's picture

no no no.  freedom is slavery.  knowledge actually is power.

DOT's picture

Knowing and doing are not the same.

Mutatto's picture

"Probably the biggest risk to the USA lies within the USA."

Specifically, 1600 Pennsylvania Ave.



Centurion9.41's picture

The reason it doesn't sound scary is due to your projection of Western/US values and cultural norms on a foreign situation. 

Evil like Hitler, Stalin, Mao, Saddam, etc., all rise to power during periods of violent instability.

Think of every US polling neighrborhood surrounded by Black Panthers & KKK members, armed with AK-47s.  Not exactly a vision of stability. 

As for risk to the US.  Well the "it's over there" mentailty was a very widely held apathy, before 9/11.

So for the above reasons, and some really bad BO, banksters and politicians, I'll agree with the greatest risks to the US lying within.

LawsofPhysics's picture

Perhaps, but the modern (and mostly veteran) SWAT guys I know will have no problem dispensing with these "organizations".  In fact, many are looking forward to it.

ceilidh_trail's picture

So what's hold(er)ing them back?

lunaticfringe's picture

Forgive me for not giving a shit about Egypt or Muslims. Kind of grumpy today.

EscapeKey's picture

Muslims sit on substantial oil reserves, so unless you don't eat or drive a car...

lunaticfringe's picture

Shit. I tried. But I still don't care.

SheepDog-One's picture

Yep, same in this lifeboat over here....really just dont give a shit about the puppet show anymore.

X.inf.capt's picture

thats nothing a major war wont fix...

and thats whats coming...

by summer!


Charlie's picture

Egypt has almost no oil and is economically insignificant. They however control the Suez canal.

Oh regional Indian's picture

If it's not one thing, it's another. The Suez Canal might as Well be an oil well.


Centurion9.41's picture

Economically insignificant, but controls the Suez.  No dissonance there.

But it does beg who really controls the canal.  One well placed set of weapons, or a scuttled ship laden with bio &/or nuke hazards could make quite a mess for some time.

AchtungAffen's picture

Sharia law? Really? That's your worry... you gotta be kidding me. Someone is a little too afraid of those bearded men with their strange religion 'tseems.

CPL's picture


Fuel/Brake pumps/lines are not being made right now which is backing up into the auto sector this week because of our JIT practices with parts manufacturing.


Fuel-less/Brakeless everything baby!

pods's picture

I love it when our hypocrisy bites us in the ass.

First you have to bring them democracy through bombing or bribing, then you have to bitch about them not doing what YOU want them to.

At least Hannity can use the term "Caliphate" more often now?  Kinda like the sound of that.


Everybodys All American's picture

This has been the history of all Islamic countries. Anyone expecting a different outcome with Egypt was and or is a fool. Hear that McCain, Graham, Hillary Clinton, Obama, etc. The Islamic culture is taught to lie to the infidel. That might explain alot come to think of it.

surf0766's picture

It was not forgotten by those who read an understand. It was only papered over by those who wish to keep the sheep in the dark and put forth an agenda.

Dr. Engali's picture

If we had markets they would be whistling past the grave yard, but we no longer have markets. We have policy tools. Surely a veteran like Art realizes this.

Oh regional Indian's picture

Very true. Well said. Policy tool.....


Vince Clortho's picture

ahh yes ... the vast array of policy tools wielded by the Bearded Crusader.

Centurion9.41's picture

Of course he does Dr. E.  However, Art's writing for an audience.  Which one is the question.

divedivedive's picture

Why is Art Cashin bringing this to our attention ? Were is the news media ? Why is it that news today has a shelf life about as long as it takes a ZH page to fill up with topics ? How many can name the current residing anchors for the leading news organizations ?

Eric L. Prentis's picture

News on TV is just spin, propaganda and lies. Multinational corporations own the TV networks, which kowtow to government and sell the status-quo’s 1% position. Who gives a rat’s ass who the parrot news anchors are, they just read the teleprompters and do what they are told.


The only remedy, do not watch TV.


Experience the wonderful feeling knowing many thousands of TV commercials a week are going unwatched, and are useless on you.   

insanelysane's picture

I'm already short on papyrus manufacturing.

writingsonthewall's picture

Do you know who fears sharia law?


Do you know why?

Because it bans charging interest on loans.

There is nothing more to this - it's the CORPORATIONS who dislike Sharia law - I really don't care what oppressive regime I live under, whether it be corporate-fascism or religious-fanatisism - they're all the same in the end - and will all need to be broken.


The current state of affairs and media hyped hate for Islam is like 2 men fighting over who gets to sleep with your wife!


Maybe the west will learn this is why you should create puppets in Muslim countries so they do your bidding - but then again they have been failing to learn this lesson for many, many years now - they clearly don't get it.


Starting war with Iran would be madness as there are less 'friendlies' in the area than ever.


I don't like the tone of the author - which at the end suggests that America should have considered the outcome when 'encouraging' this - so are we to assume that you would rather people live under dictatorships in order to 'keep the peace'?


That is a price for peace not worth paying - and it has it's roots in fascism, where you allow the oppression of sections of humanity so that calm can be maintained for your benefit.

BeetleBailey's picture

I am waiting...for the rogue pilot to take out most of the capitol, K Street, when all are in session. Just him and his wing man....fully armed.....going off course...nailing the Pentagon too..1600 ......scoot over to Langley....


......start over....cause this shit ain't workin.....the sheeple need to wake up...and no remedies are in sight for that to happen...

jmac2013's picture

Face it, the only risk in the system is the FED shutting off its "liquidity".  Everything else is just hot air. 

NooooB's picture

WOTW, That is far too coherent of an opinion for this place but I'm upvoting you anyway. In fact I'll pile on.

America NEVER "encouraged" this! America got caught with it's pants down across the middle east with it's blatant, and long term support of horrible dictators.

Then we tried to look like we wern't suprised and turn the foocus onto how "Social Media" (an american thing) saved the day! Ridiculous!

In Egypt, the military, whom we give billions to every year, is still in charge and always will be. No matter who they elect. Just like in Turky.

America (And Britian ) are scrambling to make it look like they "support democracy and human rights". 

Bbut we don't really give a shit. Unless there's profit in it. And our profit in Egypt has not, and will not change. All that aid we give the Egyptian Military has to be spent with American companies by law. That's how it works.

So our government steals our tax dollars and gives it to the military industrial complex by way of egypt. And uses the threat of the Sharia boogeyman to justify keeping the money rolling.

All we do, as Americans shopping at wallmart, and allowing the military industrial complex to run the show, is encourage the oppression of huge sections of humanity!

We do it like a job! Why anyone is surprised, at all, is beyond me.. "Peace through Facism" is the profit model. We do it out there because we can't do it here. Yet.


infromthecold's picture

Does anyone who works in geopolitcal risk really see the "ruling generals" in Egypt as a force for encouraging secular democracy?  Or really doing anything other than trying to secure their own interests in any future regime?   I suppose I shouldn't be shocked at this point that the voices speaking loudest about the threat from the Muslim Brotherhood in Egypt are the least informed.  The MB is not a group of wild-eyed Kalishnikov-waving fanatics.  If you analyze the economics of the group you would see that even in the Mubarak era, MB members were estimated to control anywhere between 35-45% of the country's wealth.  They used the powerful professional syndicates to build their power base even when they were unable to field candidates in the general elections.  They are not the outsiders, they are the insiders whose companies have bled-out due to outflows of capital.  The reason that MB has proved so popular has more to do with their reputation for being above the baksheesh culture that is so pervasive in Egypt.  If they choose to field a presidential candidate, they should be able to do so.  It will be interesting to see, however, if their reputation for being a force contra corruption will be able to last should they win the presidental election.  If Turkey is the example, then the reputation of the MB is likely to suffer a few black eyes as it makes the transition to mainstream political party.   The "fear the beard" message from Art Cashin makes me wonder more about UBS positions re the Egyptian capital markets than quake in my boots at the prospect of a Talib in the presidental palace in Cairo.  But yes, please, if you must, continue to withdraw from Egypt, the smart money will happily buy-in at a discount.

nah's picture

actually i would like to see the pyramids someday, few ancient artifacts carry so much meaning


carbonmutant's picture

Egypt's self-counter-revolution

The main manifestation of the self-counter-revolution lies in the Islamist saga. Clearly, the uptrend of Islamists’ “rise,” which prevailed after the parliamentary elections, is significantly fading away. “The lure of power gripped them,” Mohamed, a 25-year dissident Islamist told me, “They don’t care anymore about people, Islam or even da’wa; they only focus on taking power.”

What Islamists don’t realize is that the revolution did not lead to a real diffusion of power; rather, it reshaped its center. Hence, instead of being dominated by a singular political party (Mubarak’s National Democratic Party) with a “group of gentlemen thieves,” Egyptian politics is now under the control of a singular force: the military. Not surprisingly, Islamists still act as opposition, albeit with a different flavor, not as a real power holder.

Clowns on Acid's picture

Another brilliant strategy (Arab Spring) by the Obama Admin, most notably Hillary. 

These people are veritable clowns on acid.

It's going to play out as all left wing "progressive" (opposite of liberal) policies always do....violence and deaths. Just a question of time (3 to 6 months?).