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Thursday, January 27, 2011

Brainstorming Thursday part 1

1. The middle east implodes instead of an explosion triggered by Israel - the Muslim world is in turmoil and the consequences will be very severe for the whole world as this seems to be just the beginning.

excerpts from zerohedge

Egyptian Stock Market Plunges Over 11% To Fresh Multi-Year Lows; Is A Suez Canal Transit Halt Imminent?

Ever wanted to see what a market plunge looks like into a revolution-inspired bidless open? Look no further than Egypt: after being halted briefly earlier, the market is now in freefall, dropping 11% in the span of minutes. This brings the two day drop to over 16%, and brings the EGX30 to the lowest level since 2009. Egyptian CDS have surged over 10% to 385 mid, a jump of 40 bps on the day. Anyone who purchased protection on the riot-torn country after we first suggested it is about to roll this weekend, congratulations. And while the important part of the world may ignore what is happening in Egypt, after all it is not US banker money thay is being lost, they may want to consider this: according to reports, there has been live fire in Suez, where the police headquarters have been taken over. More importantly, according to the Guardian, we may see the first army insubordination in this city: "a lawyer and executive director for the Arabic Network for Human Rights Information, has tweeted that some army units in Suez are refusing to support the crackdown against the people." Which means the government may be about to lose control over Suez... And the Suez Canal.

S&P Downgrades Japan From AA To AA-, Outlook Stable

From S&P: "The downgrade reflects our appraisal that Japan's government debt ratios--already among the highest for rated sovereigns--will continue to rise further than we envisaged before the global economic recession hit the country and will peak only in the mid-2020s. Specifically, we expect general government fiscal deficits to fall only modestly from an estimated 9.1% of GDP in fiscal 2010 (ending March 31, 2011) to 8.0% in fiscal 2013. In the medium term, we do not forecast the government achieving a primary balance before 2020 unless a significant fiscal consolidation program is implemented beforehand."

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Former Goldman Insider's Take On Obama's Speech And The Massive Pink Elephant In The Room

Watching Obama deliver his State of the Union Speech last night, reminded me of all the rah-rah quarterly meetings that we had to attend as Managing Directors at Goldman, where senior management would remind us all of how great we were, and if there were any areas of competitive weakness relative to our adversaries at other banks, all we had to do was step up our game, innovate and globalize (or something like that.) Obama wasn't delivering a summary of what has, or is, going on for most Americans last night, no such negative status report. And, if you didn't expect him to, he gave good speech - full of reminders of how it is America's destiny and the American dream to be great and powerful, "robust democracy" that we are. There was a massive pink elephant in the room called reality though....My reaction was wtf?

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Interactive Map Of Recent Food Riots And Price Hikes

While the Fed refuses to extract its head from deep within the sand of ignorant hubris that only a career in Ivy League education can provide, the world continues to burn, in many places quite literally. For all those who are finding it hard to juggle all the rioting, and confuse their Cairos with their Calcuttas, below we present an interactive map disclosing all recent documented food price hikes, protests, and riots.

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