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 market opened on Sunday for the first time sincepresident Mohamed Morsi issued his Constitutional Declaration givinghimself dictatorial powers, and the news wasn’t good. Stocks fellalmost 10%, and would have fallen farther if it hadn’t been stopped byautomatic triggers. Investors pulled out of Egypt’s stock marketbecause 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 increasingtourism again. On Sunday, investors decided to flee for somethingmore 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 aclash with police when protesters stored a Muslim Brotherhoodheadquarters office in northern Egypt. Additional riots anddemonstrations are being planned for Monday and Tuesday. These eventshave forced Morsi to declare that the decree he issued is onlythat is opposing him. However, many Muslim Brotherhood memberssupport Morsi and his decree, leaving the possibility of conflictsbetween Salafis and Islamists on the one hand versus secularists andliberals on the other hand. It was just a mere five days ago thateveryone considered Morsi to be a very clever, shrewd politician,after he brought about the cease-fire between Israel and Hamas inGaza. He picked that particular time to issue his ConstitutionalDecree, thinking that he would be politically invincible. But itturns out he was just being too clever by half, and he’s lost a lot ofthe 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 InternationalMonetary Fund (IMF), who wants to force Greece to meet its austeritycommitments, and Eurozone leaders, who are considering giving Greece atwo-year postponement, is delaying agreement on a new bailout paymentfor Greece. Greece now needs an immediate loan of 44 billion euros(which is a hell of a lot of money) just to meet current obligationsthrough December 21. This should have been settled weeks ago, but itkeeps getting postponed. There’s a new meeting of the Eurogroupfinance ministers on Monday, and Greece is hoping that a favorabledecision 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 deployedon the border with Syria, as we reported last week, is arousing suspicions in Syria, Iran andRussia that the systems would be deployed as a precursor to theimplementation of a no-fly zone over Syria, similar to the no-fly zonethat Nato implemented last year over Libya. Russia’s Foreign MinisterSergei Lavrov referenced a statement attributed to Russian playwrightAnton Chekhov: If there is a gun hanging above the fireplace in thefirst act of a play, then the gun must be fired in the third act, orit shouldn’t have been there in the first place. According to Lavrov:
“Our concerns are rooted in the ‘Chekhov’s gunsyndrome’ that says that if a gun appears on stage in the firstact it will definitely fire by the third. … Any provocation maytrigger a very serious armed conflict. We want to avoidthis.”
Nato has indicated that they are considering Turkey’s request, but thefinal decision will have to come from one of the three nations thatactually have Patriot missile systems — Germany, the Netherlands, andthe U.S. Russia Today