World View: Egypt's Stock Market Crashes 10%

This morning's key headlines from GenerationalDynamics.com

  • Egypt's stock market crashes 10% over government turmoil
  • Riots and stock market may force Morsi to back down
  • Rift between IMF and Eurozone leaders puts Greece's bailout in limbo
  • Russia warns that Turkey's Patriot Missile deployment will destabilize region

Egypt's stock market crashes 10% over government turmoil

Egypt's Stock Exchange
Egypt's Stock Exchange

Egypt's stock market opened on Sunday for the first time since president Mohamed Morsi issued his Constitutional Declaration giving himself dictatorial powers, and the news wasn't good. Stocks fell almost 10%, and would have fallen farther if it hadn't been stopped by automatic triggers. Investors pulled out of Egypt's stock market because of the following concerns:

  • Egypt's economy has been plummeting since the Egyptian Revolution riots and demonstrations started early in 2011, because of a sharp drop in tourism and foreign investment.
  • Last week, Egypt signed a preliminary agreement with the International Monetary Fund (IMF) for a $4.8 billion loan.
  • However, as in the case of Greece, the IMF is requiring Greece to reduce its budget deficits, by reducing energy subsidies to the people, and by raising taxes. Both of these moves are going to be very unpopular, and will generate further turmoil, risking the same kind of vicious deflationary cycle as in Greece.
With riots returning to the streets, there's no chance of increasing tourism again. On Sunday, investors decided to flee for something more safe. Gulf News (Dubai)

Riots and stock market may force Morsi to back down

A 15-year-old protester and 40 people were injured on Sunday in a clash with police when protesters stored a Muslim Brotherhood headquarters office in northern Egypt. Additional riots and demonstrations are being planned for Monday and Tuesday. These events have forced Morsi to declare that the decree he issued is only "temporary," and that he would meet on Monday with the Judges group that is opposing him. However, many Muslim Brotherhood members support Morsi and his decree, leaving the possibility of conflicts between Salafis and Islamists on the one hand versus secularists and liberals on the other hand. It was just a mere five days ago that everyone considered Morsi to be a very clever, shrewd politician, after he brought about the cease-fire between Israel and Hamas in Gaza. He picked that particular time to issue his Constitutional Decree, thinking that he would be politically invincible. But it turns out he was just being too clever by half, and he's lost a lot of the respect he gained earlier in the week. National Post (Canada)

Rift between IMF and Eurozone leaders puts Greece's bailout in limbo

The rift that exploded into the open last week between Christine Lagarde, chief of the International Monetary Fund (IMF), who wants to force Greece to meet its austerity commitments, and Eurozone leaders, who are considering giving Greece a two-year postponement, is delaying agreement on a new bailout payment for Greece. Greece now needs an immediate loan of 44 billion euros (which is a hell of a lot of money) just to meet current obligations through December 21. This should have been settled weeks ago, but it keeps getting postponed. There's a new meeting of the Eurogroup finance ministers on Monday, and Greece is hoping that a favorable decision will finally be reached at that meeting. Southeast Europe Times and Kathimerini

Russia warns that Turkey's Patriot Missile deployment will destabilize region

Turkey's request to Nato for Patriot missile systems, to be deployed on the border with Syria, as we reported last week, is arousing suspicions in Syria, Iran and Russia that the systems would be deployed as a precursor to the implementation of a no-fly zone over Syria, similar to the no-fly zone that Nato implemented last year over Libya. Russia's Foreign Minister Sergei Lavrov referenced a statement attributed to Russian playwright Anton Chekhov: If there is a gun hanging above the fireplace in the first act of a play, then the gun must be fired in the third act, or it shouldn't have been there in the first place. According to Lavrov:

"Our concerns are rooted in the 'Chekhov’s gun syndrome’ that says that if a gun appears on stage in the first act it will definitely fire by the third. ... Any provocation may trigger a very serious armed conflict. We want to avoid this."
Nato has indicated that they are considering Turkey's request, but the final decision will have to come from one of the three nations that actually have Patriot missile systems -- Germany, the Netherlands, and the U.S. Russia Today


Permanent web link to this article
Receive daily World View columns by e-mail


advertisement

Breitbart Video Picks

advertisement

advertisement

Fox News National

advertisement

advertisement

Send A Tip

From Our Partners

Fox News Sports