Mish's Global Economic Trend Analysis

Egyptian Police Disappear in Widespread Chaos, Vigilantes Defend Homes; Egypt Video With a Message "We Will Never be Silenced!"
Egypt Closes Banks, Stock Market; Protests Spread to Saudi Arabia, Jordan; Saudi King Backs Mubarak; Reflections on Misguided US Policy
Creative Art of Bullish Excuses: Stock Market Still "Good to Go"; Hook Has Been Set
Mubarak's Acts of Cowardice; Obama Calls Mubarak for 30-Minutes; Cell Service, Internet Total Shutdown; Anarchy in Cairo; How Long can Mubarak Last?

Egyptian Police Disappear in Widespread Chaos, Vigilantes Defend Homes; Egypt Video With a Message "We Will Never be Silenced!"

Posted: 29 Jan 2011 08:14 PM PST

Here is another video to consider, with video credit to Tamer Shaaban. It has close to 400,000 views when I saw it.

I like one protester's message in the video ... "We will not be silenced. Whether you are a Christian, whether you are a Muslim, whether you are an atheist, you will demand your goddamn rights, and we will have our rights one way or the other! We will never be silenced!

If the embed above does not play, here is a link: http://www.youtube.com/watch?v=ThvBJMzmSZI&sns=fb

Egyptian Police Disappear in Widespread Chaos, Looting Spreads,Vigilantes Defend Homes

Please consider Egypt vigilantes defend homes as police disappear

Egyptians armed with guns, sticks, and blades have formed vigilante groups to defend their homes from looters after police disappeared from the streets following days of violent protests.

Banks, junctions and important buildings previously guarded by the police and state security were left abandoned Saturday and civilians have quickly stepped in to fill the void.

"There are no police to be found anywhere," said Ghadeer, 23, from an upscale neighborhood. "Doormen and young boys from their neighborhoods are standing outside holding sticks, razors and other weapons to prevent people from coming in."

Police withdrew from the streets when the army was sent in to take over security in Cairo. Witnesses have since seen mobs storming supermarkets, commercial centers, banks, private property and government buildings in Cairo and elsewhere.

Egyptians have called for army intervention to bring back law and order. Saturday, many protesters changed: "No to plundering and no to destruction.

Dozens of shops across Egypt have painted display windows white to hide contents and discourage looting. A cash machine was broken in an upscale neighborhood, witnesses said.

"They are letting Egypt burn to the ground," said Inas Shafik, 35.

Several government buildings were set ablaze during days of protests against President Hosni Mubarak's 30-year rule. They were often left to burn without the intervention of authorities.

Islamic leaders have in the meantime called on people to join vigilante groups to protect their homes themselves. Yet, scenes of looting appeared to spread from upscale parts of Cairo to downtown and poorer areas as well.

Some 700 prisoners escaped in Fayoum, south of Cairo, and killed a senior police officer, sources said. Another senior police officer was also kidnapped in Damietta, a witness said.

"They are torching down the prisons. Our lives and property are at risk. Get out of the way," one shopper shouted, echoing the anxieties of many as they raced to stock up at supermarkets.

Others stayed penned inside their homes for fear of what they said were marauding gangs in some areas. Friday, looters broke into the Egyptian Museum -- home to the world's greatest collection of Pharaonic treasures -- and destroyed two pharaonic mummies, said Zahi Hawass, Egypt's top archaeologist.

In walled-off estates on the outskirts of Cairo, private security locked down gates and refused to let people in.

Ghadeer said: "The looters want to plunder and the government is washing its hands clean of any responsibility."

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Egypt Closes Banks, Stock Market; Protests Spread to Saudi Arabia, Jordan; Saudi King Backs Mubarak; Reflections on Misguided US Policy

Posted: 29 Jan 2011 02:42 PM PST

One sure way to get people fired up is to shut down the stock market and all the banks, thereby denying citizens access to their money. Yet, that is exactly the desperate course of action chosen by Egyptian President Hosni Mubarak.

Protests have now spread to Saudi Arabia, and Jordan. So far however, the protests in Saudi Arabia are of a peaceful nature, mostly related to government response to flooding. Recent history suggests that may change at any moment into something far more significant.

In a move that can easily backfire, the Saudi king defended Mubarak and offered support.

Meanwhile, in Jordan, the pace of protests have now picked up as opposition supporters have held rallies in Amman and called for the resignation of Jordan's prime minister.

Egyptian Bourse, Banks to Close

Bloomberg reports Egyptian Bourse, Banks to Close Tomorrow on Unrest

The Egyptian bourse will be closed tomorrow after thousands of protestors congregated in central Cairo for a fifth day and President Hosni Mubarak ignored demands to resign. Banks will also be shut, State TV said.

"No one expected this to take place and at such a fast sequence of events," said Mohamed Radwan, head of international sales at Cairo-based Pharos Holding for Financial Investment. "The critical time frame for the market is from now until the implementation of economic and democratic reforms demanded by the people."

Soldiers, backed by armored carriers and tanks, are guarding banks and government buildings in the capital after acts of looting and theft yesterday. Forty people were killed and another 1,100 people were injured yesterday and today in the clashes that have swept major cities including Cairo, according to the Egyptian Health Ministry. The government of Prime Minister Ahmed Nazif resigned today at Mubarak's request.

Domino Effect

Bloomberg reports Saudi Stocks Decline Most Since May as Egyptians Defy Curfew

Saudi Arabian shares retreated the most since May on concern political unrest could spread in the Middle East after Egyptian protesters clashed with police and the North African country's president refused to resign.

The Tadawul All Share Index tumbled 6.4 percent, the most since May 25, to 6,267.22 at the 3:30 p.m. close in Riyadh. All but one of the 146 shares fell. Saudi Basic Industries Corp., the world's largest petrochemical maker, slumped 7.5 percent. Savola Azizia United Co., a food producer with subsidiaries in Egypt, dropped 10 percent, the maximum fluctuation allowed in a single trading session.

"There is a lot of worry looming among investors that we're going to see a domino effect across the region," said Amro Halwani, a trader at Shuaa Capital PSC in Riyadh. "That is pushing investors away from equities and straight into cash. It is panic selling across the board."

Mubarak appoints leaders as protests rage

MarketWatch reports Mubarak appoints leaders as protests rage

Mubarak appointed his intelligence chief, Omar Suleiman, vice president and named former civil aviation minister Ahmed Shafik prime minister. Shafik was charged with setting up a new government.

The appointment of the 74-year-old Suleiman may signal that Mubarak won't run again in presidential elections in September. But the appointments of Suleiman and Shafik didn't slow protestors' demands for Mubarak's resignation or immediately satisfy the Obama administration.

"The Egyptian government can't reshuffle the deck and then stand pat," U.S. State Department spokesman P.J. Crowley wrote Saturday on Twitter. "President Mubarak's words pledging reform must be followed by action."

Protests Call for Ouster of Jordanian Prime Minister

Anti-government action in Jordan picked up and Jordanian Protesters Say Prime Minister Must Go

Taking their cue from Tunisia and Egypt, an estimated 3,000 Jordanians marched through the streets after Friday prayers, demanding the resignation of Prime Minister Samir Rifai and calling for political and economic reforms.

They warned corrupt Arab leaders would face the same fate as ousted Tunisian President Zine El Abidine Ben Ali.

Peaceful protests were also held in the cities of Irbid, Karak, Maan, and Diban, AFP reported. Jordan has a population of six million, 70 percent of whom under the age of 30. Official unemployment is running at about 14 percent, but other estimates put joblessness at 30 percent.

The government says it is pumping around $500 million into the economy to improve the people's standard of living.

Peaceful Protests in Saudi Arabia

In Saudi Arabia, Dozens of protesters arrested in Jeddah

Dozens of protesters have been arrested in Saudi Arabia's second biggest city after they protested against the weaknesses of infrastructure of Jeddah.

The protests were triggered on Friday after floods swept through the city, killing at least four people, and raising fears of a repeat of the deadly 2009 deluge, in which more than 120 people lost their lives.

On Wednesday, torrential rains caused flooding that swept away cars and downed electric lines in Jeddah.

The oil-rich kingdom lacks the basic necessary systems and structures to drain water out of the residential areas during a heavy rainfall.

Given infrastructure is this bad, I have a simple question: What the hell is Saudi Arabia doing with all the oil money it receives?

I also have an answer: It is going into the pockets of billionaire sheiks who have more money than they possibly know what to do with. The same could be said for multi-billionaires everywhere.

Saudi Protest Video

Saudi king vows support for Mubarak

Inquiring minds are likely pondering the wisdom of this action: Saudi king vows support for Mubarak

Saudi Arabia's King Abdullah ensures Mohamed Hosni Mubarak of his support amid nationwide protests against the Egyptian president's three-decade-long rule.

In a Saturday telephone conversation with Mubarak, Abdullah Ibn Abdulaziz Al Saud described the popular movements as "tampering with Egypt's security and stability in the name of freedom of expression," AFP reported.

The Saudi king branded the protesters as "intruders" and said, "Saudi Arabia stands with all its power with the government and people of Egypt."

The comments came after a Human Rights Watch report lambasted Riyadh earlier in the week for mistreatment of women, foreign labor and the Kingdom's Shia minority.

There is widespread approval among Arabs for the ouster of Egyptian President Hosni Mubarak. Offering support to someone who is clearly despised does not seem like a prudent move to me.

Reflections on Decades of Misguided US Policy

President Obama is attempting to play this from both sides as best he can. For more details on his phone conversations with Mubarak, please consider

Mubarak's Acts of Cowardice; Obama Calls Mubarak for 30-Minutes; Cell Service, Internet Total Shutdown; Anarchy in Cairo; How Long can Mubarak Last?

Egypt Calls in Army, Imposes Curfew; Mubarak Orders Ministers to Resign; US Puts Egypt Aid Under Review; Will the US Get this one Right?

It's important to note that I am not talking about mistakes in current US policy but rather misguided policy decisions over the decades.

We supported a corrupt Shah of Iran and look at the results.
We supported Iraq on the hopelessly flawed theory "the enemy of my enemy is my friend." There are pictures of Rumsfeld shaking hands with Hussein.
We gave chemical weapons to Iraq.
Our intelligence do not see the takeover of the US embassy in Iran coming.
Our CIA trained Bin Laden to fight Russia in Afghanistan. Now we are hunting Bin Laden and fighting in Afghanistan.
We have wasted trillion of dollars in both Iraq and Afghanistan and all we have to show for it is more enemies.

Contrast that that with our actions in Tunisia. We did not spend a dime, nor did our intelligence efforts even see it coming. Yet, in Tunisia, a protest by the people overthrew overthrew Tunisian strongman Zine el Abidine ben Ali.

Wall of Fear Comes Down

The La Times reports Fearless protesters challenge regimes around Middle East

Reporting from Tunis, Tunisia — A wall of fear has come down.

All across the Arab world, people living under the thumb of repressive leaders are rising up against the rulers who once seemed omnipotent.

They are using the Internet to network and spread the word. They are watching themselves on satellite television. They are drawing strength from the hyperactive energy of the frustrated young people dismissed and discarded by their governments.

It is a contagious spirit.

"It's like a transition moment in the Arab world," said Mohammad Abou Rouman, a political researcher at the University of Jordan, in Amman, where protests erupted Friday. "It's the influence of the Tunisian domino, and it will not stop. It will go to other Arab states."

The uprisings are having a ricochet effect across the Arab world. People are watching the events unfolding on television and Facebook and identifying with the people in the streets.

"I was with my friends on Facebook, and we encouraged each other," said Dali ben Salem, a 25-year-old intern in pharmacy in Tunis. "The solidarity helped me to face the fear."

And whether or not Egyptian President Hosni Mubarak manages to survive what one analyst called a political "tsunami" that is enveloping the Arab world, things will never return to normal, analysts said.

War of the Future

How much money did the US spend on misguided missile programs and misguided missile defense systems, only to be defeated by a group of hijackers with razor blades? Is there more of a threat from a suitcase bomb or a missile?

How much money do we waste keeping troops in 140 countries where they are mostly not wanted?

Please remember Bin Laden's primary objection to the US was that US troops were on sacred Arab soil. So why do we do it? What has it brought us but misery?

We have caused countless trillions of dollars of destruction in Iraq, and in Afghanistan. Sadly, the war in Afghanistan is no more winnable than the War in Vietnam.

Quiet revolutions by the people are the war of the future, and the only kind of war that makes any sense.

Please note that Tunisia did not cost US taxpayers a dime. We should not have wasted a dime to get rid of Hussein either. Iraq was not a threat to the US. Simply put, it was a matter for the Iraqi people to settle, not us.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Creative Art of Bullish Excuses: Stock Market Still "Good to Go"; Hook Has Been Set

Posted: 29 Jan 2011 11:06 AM PST

While reading more on the Egyptian riots in a Bloomberg article, I found this nice quip on global equity prices.

European stocks retreated this week as escalating protests in Egypt and an unexpected drop in the U.K.'s gross domestic product offset accelerating U.S. economic growth in the fourth quarter.

Next Plc, Britain's second-biggest clothing retailer, slumped 7 percent this past week as the U.K. economy shrank.

"Some of the European data was weak and the U.K's gross domestic product was lower than expected, although the message on the U.S. economy is still okay to good, which should support equity markets going forward," said Simon Maughan, co-head of European equities at MF Global UK Ltd.

Creative Art of Bullish Excuses

That statement from Simon Maughan is just the kind of "BS" I talked about in Market Participants "Learn the Wrong Lesson" from Bernanke; Conflicts of Interest in "Stay the Course" Advice.

It is more than a stretch to suggest global equities will be fine on the basis of the US economy alone, especially when there should be huge concerns about the imbalanced, stimulus-fed US economy and the unbalanced global economy in general, especially overheating in India and China, and property bubbles in the UK, China, and Australia.

Moreover, Maughan did not mention valuation, or risks. He was simply looking for any excuse to say "buy stocks".

I do not know whether the stock market goes up or down from here, but his statement is absurd from many angles, especially valuation.

Hook Has Been Set

If stocks do head down now, a hook has been set. That "hook" is blaming this all on Egypt, with a message "buy the dip".

One of these "quick, little dips" will be neither quick, nor little. Whether this is the one, remains to be seen.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Mubarak's Acts of Cowardice; Obama Calls Mubarak for 30-Minutes; Cell Service, Internet Total Shutdown; Anarchy in Cairo; How Long can Mubarak Last?

Posted: 29 Jan 2011 01:23 AM PST

The situation in Egypt has gone from bad to worse. Cairo is in a state of near-anarchy and Egyptian President Hosni Mubarak's cowardly disruptions to the internet and cell phones have made things worse.

Egyptian citizens unable to get news on the internet or cell phones have only one place to get it now, the street.

President Obama called Mubarak in a 30-minute phone call. Obama's message was "Ultimately, the future of Egypt will be determined by the Egyptian people."

If that was a hint, Mubarak did not get it. Instead, Cairo is in flames as protesters have turned more defiant.

Mubarak Orders Crackdown, With Revolt Sweeping Egypt

The New York Times reports Mubarak Orders Crackdown, With Revolt Sweeping Egypt

With police stations and the governing party's headquarters in flames, and much of this crucial Middle Eastern nation in open revolt, President Hosni Mubarak of Egypt deployed the nation's military and imposed a near-total blackout on communications to save his authoritarian government of nearly 30 years.

Friday's protests were the largest and most diverse yet, including young and old, women with Louis Vuitton bags and men in galabeyas, factory workers and film stars. All came surging out of mosques after midday prayers headed for Tahrir Square, and their clashes with the police left clouds of tear gas wafting through empty streets.

By nightfall, the protesters had burned down the ruling party's headquarters in Cairo, and looters marched away with computers, briefcases and other equipment emblazoned with the party's logo. Other groups assaulted the Interior Ministry and the state television headquarters, until after dark when the military occupied both buildings and regained control. At one point, the American Embassy came under attack.

Six Cairo police stations and several police cars were in flames, and stations in Suez and other cities were burning as well. Office equipment and police vehicles burned, and the police seemed to have retreated from Cairo's main streets. Brigades of riot police officers deployed at mosques, bridges and intersections, and they battered the protesters with tear gas, water, rubber-coated bullets and, by day's end, live ammunition.

Cairo in Near-Anarchy

The Washington Post reports Cairo in near-anarchy as protesters push to oust president

The Egyptian capital descended into near anarchy Friday night, as the government sent riot police, and then the army, to quell protests by tens of thousands of demonstrators determined to push President Hosni Mubarak from office.

By the end of the day-long battle, the protesters were still standing and the police were nowhere to be seen.

It remained unclear late Friday night what role the Egyptian military might play. Mubarak, a former air force officer, draws much of his strength from the military, and any decision by the armed forces to withdraw support would mean the certain end of his reign.

But unlike the police, which unleashed an arsenal of weapons against the demonstrators, the military did not take any immediate action, and protesters gleefully welcomed the soldiers' arrival in a thundering of personnel carriers.

Protesters were honking their horns in celebration and roaming freely through central parts of the city late in the evening, in defiance of a strict curfew. The night air was thick with black smoke, and the sounds of explosions, gunshots, sirens, cries and occasional cheers echoed through the darkness.

Success in ousting Mubarak would be a remarkable achievement for a group of demonstrators who have no charismatic leaders, little organization, and few clear objectives beyond removing this nation's autocratic president and other members of his ruling clique.

Before this week, few thought a mass anti-government movement was possible in Egypt, a country that has little experience with democracy. But after Friday's protests, the campaign to oust Mubarak only seems to be gathering strength.

The Washington Post has a stunning set of 57 Egypt Riot Images, some of the best I have seen yet. Here are a few of them.

Jan. 29, 2011
In this photo released by China's Xinhua News Agency, demonstrators climb up armored vehicles at Square Tahrir in Cairo, Egypt early Saturday.
Cai Yang / AP

A protester burns a picture of Egypt's President Hosni Mubarak during clashes in Cairo on Jan. 28, 2011.
Amr Abdallah Dalsh / Reuters

Egyptian protesters face anti-riot policemen in Cairo on Friday, Jan. 28, 2011. The riots escalated throughout the day.
Victoria Hazou / AP

Army tanks line up in Tahrir Square in Cairo.
Peter Macdiarmid / Getty Images

Thousands of protesters gather in Tahrir Square despite a curfew.
Peter Macdiarmid / Getty Images

Egypt Cuts Off Most Internet and Cell Service

The New York Times reports Egypt Cuts Off Most Internet and Cell Service

Autocratic governments often limit phone and Internet access in tense times. But the Internet has never faced anything like what happened in Egypt on Friday, when the government of a country with 80 million people and a modernizing economy cut off nearly all access to the network and shut down cellphone service.

The shutdown caused a 90 percent drop in data traffic to and from Egypt, crippling an important communications tool used by antigovernment protesters and their supporters to organize and to spread their message.

Vodafone, a cellphone provider based in London with 28 million subscribers in Egypt, said in a statement on its Web site that "all mobile operators in Egypt have been instructed to suspend services in selected areas." The company said it was "obliged to comply" with the order.

Egypt, to an unprecedented extent, pulled itself off the grid.

Obama Calls Mubarak, Talks 30-Minutes

Bloomberg reports Obama Tells Mubarak He Must Stick to Pledge of Egyptian Reforms

President Barack Obama told Egyptian President Hosni Mubarak last night he must live up to promises he made about political, social and economic reforms following the fourth day of anti-government demonstrations across Egypt.

Obama delivered the message in a 30-minute phone call between the two leaders that followed public remarks by Mubarak in which he asked the country's government to resign and pledged to fight poverty, speed economic and social changes, and promote civil liberties and democracy.

In a televised address to the Egyptian people just after midnight Cairo time, Mubarak said he asked his ministers to resign and promised that the new government would speed reforms and promote civil liberties. He defended his response to widespread demonstrations, which has included ordering the army to help police impose a 6 p.m. to 7 a.m. curfew by sending armored vehicles and tanks into the streets.

Obama responded that "this moment of volatility has to be turned into a moment of promise." He also called on the Egyptian government to end the blocking of the Internet, including social networking sites that protesters have used to organize.

"Ultimately, the future of Egypt will be determined by the Egyptian people," Obama said. "Governments have an obligation to respond to their citizens."

At the White House, Obama said the Egyptian protestors were exercising "universal" rights to peaceful assembly and association, free speech and "the ability to determine their own destiny.

"These are human rights," he said. "And the United States will stand up for them everywhere."

Mubarak's Acts of Cowardice

Shutting down the internet is an act of cowardice. Firing all your ministers while pledging reform is an act of cowardice. So is ordering Vodafone to shut down cell phone usage. Sending tanks into the street is certainly an act of cowardice.

Not only are those acts of cowardice, they have backfired. People are in open defiance of curfews. After all, they have no way to get the news but see it themselves in the streets.

By the way what is a tank supposed to do anyway? Is it really going to fire on the people? Check out that first image again. Protesters are crawling all over those tanks and armored vehicles.

As I see it, the only thing tanks can possibly do is get people stirred up. Yet, the only thing holding Mubarak's corrupt regime together is the military.

Mubarak came up from the military so there is some loyalty there. However, the military has some genuine support from the people (unlike the despised state police), and I doubt the military will want to lose that support.

How long the military will support Mubarak is the key question at this point. I suspect not long if these riots continue.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

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Saturday, January 29, 2011

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

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