02/22/11 Baltimore, Maryland – Tunisia? Nah, not so much. Egypt? Meh. Bahrain? Almost. It took Libya to really get a rise out of the markets.
Or a fall, depending on what asset class you’re looking at today.
Only Libya ranks high enough on the list of the world’s top oil exporters to register a reaction. The CIA Factbook ranks the desert nation No. 15 in exports:
Bahrain, by contrast, ranks No. 49. But sitting, as it does, close to Iran, the island nation gets a few extra brownie points for strategic importance.
Shell, BP and Marathon are but a few of the international oil companies pulling their workers out of Libya and shutting down operations. ExxonMobil, ConocoPhillips and Occidental haven’t said much more than “no comment.”
As a direct consequence, the price for a barrel of the black goo has reached a level last seen before the panic spike in 2008. Brent crude is up more than $1.50, to $107.33. West Texas Intermediate is up over $7, to $93.33.
Other headlines from the region aren’t helping. Iranian warships are passing through the Suez Canal, something the Israelis call a “provocation.” And Somali pirates have killed four Americans aboard a yacht hijacked Friday off the coast of Oman.
But the Libya story is more than that of a major oil exporter shutting down. It was one thing for Tunisians to rebel against a government with a weak army…or for Egyptians to rebel when the army largely refused to shoot at them.
But it’s another thing altogether when Col. Gaddafi sends in warplanes to strafe crowds of Libyan protesters…and the protesters keep showing up.
Neither has it been a cakewalk in Bahrain. If you’ve got the stomach for it, there are a number of disturbing videos posted on YouTube detailing the level of violence being unleashed by the respective governments on their own citizens.
“Back in the 1990s, I spent time a fair amount of time in Bahrain,” said Outstanding Investments’ Byron King in his essay “Investing Around the Chaos in the Arab World.” “Bahrain is about 70% Shiite and 30% Sunni. The Sunnis run the government, industry, business, banking, commerce. The Shiites are consigned to the other side of the camel tracks.
“I recall driving around Bahrain and encountering these surly-looking groups of underemployed young men — mostly Shiites — who were locked out of the economy. Nothing to do but smoke cigarettes, make a few dinar in the underground economy… and nurse grudges against the guys on top.
“It struck me even then that Bahrain was a pot that would boil over, sooner or later.”
We’re just about there.
Addison Wiggin
for The Daily Reckoning
Addison Wiggin
Addison Wiggin is the executive publisher of Agora Financial, LLC, a fiercely independent economic forecasting and financial research firm. He’s the creator and editorial director of Agora Financial’s daily 5 Min. Forecast and editorial director of The Daily Reckoning. Wiggin is the founder of Agora Entertainment, executive producer and co-writer of I.O.U.S.A., which was nominated for the Grand Jury Prize at the 2008 Sundance Film Festival, the 2009 Critics Choice Award for Best Documentary Feature, and was also shortlisted for a 2009 Academy Award. He is the author of the companion book of the film I.O.U.S.A.and his second edition of The Demise of the Dollar… and Why it’s Even Better for Your Investments was just fully revised and updated. Wiggin is a three-time New York Times best-selling author whose work has been recognized by The New York Times Magazine, The Economist, Worth, The New York Times, The Washington Post as well as major network news programs. He also co-authored international bestsellers Financial Reckoning Day and Empire of Debt with Bill Bonner.
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LOL. I wonder when the protesters in Madison are going to start throwing Republicans out of windows ?
You have 30,000 riot in the Middle East. But 70,000 protesters standing in the the snow in January take a week to even be noticed, and get just a footnote on the evening news.
plus, the cherry of irony atop the nuts of a chocolate-covered tongue upon a slowly-melting globe of white vanilla: this is where Nelson Hunt (not Rockefeller, his nemesis), right about the “i give up because i.m freaking broke. again” time, wildcatted into one of the biggest strikes in the history of the planet and became the world’s “second richest man”, and decided to try to corner the silver market, leading to the greatest melt-down of US Silver coins in the same history of the same planet. ever.
those who do not know this history may be, simply, condemned. to high fructose corn syrup, while being raptured by their American Idolatry.
Once that sponsor of terrosism Gaddafi has been lynched – what kind of mofo uses warplanes to kill their own people and then blame America for the problem? – then Obama can cut the counter terrorism budget by 95%. Government has balanced the budget the peace has come to the world again. Shame on all western leaders who decided to support this dictator.
Madison protesters aren’t facing the dangers the protesters in the Middle East are. Fat and happy parasites wanting to further plunder our money is not something CNN cares to cover because they know the people paying the bills will turn on them. The Mid East countries produce something of value. WI public sector parasites only produce more red ink.