Over the last several decades, the Middle East had little choice but to attempt to diversify its economy, particularly in the finance arena. The development of the finance sector in the likes of Kuwait and Dubai, or real estate and resort projects, are valiant attempts to avoid the perils of "extraction economies." Gulf States had hoped to avoid the complete integration of their economies with the fate of the many tiers of petroleum pricing attached to their chief export. After twenty years, the result has been mixed. At best.
Much of the Gulf has budgeted for much lower oil prices. Gulf states, on average, need prices above $47 a barrel to keep from running budget deficits. But some states are more vulnerable than others: Bahrain's so-called break-even price is $75 a barrel, compared with Saudi Arabia's $49 and Kuwait's $33, according to the International Monetary Fund.The speed of crude's tumble -- to about $64 a barrel -- has unnerved officials despite the apparent cushion. At an emergency meeting on Friday, the Organization of Petroleum Exporting Countries hastily decided to cut output by 1.5 million barrels a day, the biggest single cut in almost eight years. After that move failed to curb crude's fall on Friday, some oil officials suggested over the weekend that another cut was in order.
We speculated last week that OPEC would push as hard as it could. The smell of panic was in the air. The effect on actual prices (over the long-term, where it actually matters) is just about as unpredictable a problem as international economic relations has to offer. The consequences to certain states, however, would be pretty clear.
Weeks of sliding equity prices have wiped out billions of dollars of wealth for the region's influential clique of local retail investors. Saudi Arabia's main stock-market index is down by more than 50% year to date. The fall has wiped some $205 billion of value off the region's biggest exchange by market capitalization since June.
It's hard to feel sorry for them, however, when you read this:
On Sunday, Kuwaiti traders, clad in white flowing robes and waving placards, staged their second stock-exchange walkout in as many trading days. (Kuwait's market is closed on Fridays and Saturdays.) Protesting before a government building in downtown Kuwait City, they demanded more state intervention in the markets to prop up share prices. The chief executive of the National Bank of Kuwait, Ibrahim Dabdoub, called on authorities Sunday to close the exchange altogether.
Financial Storm Hits Gulf [The Wall Street Journal]
Posted by guest , Oct 27, 2008 10:20AM
First! What the hell was the point of that terrible story?
Posted by guest , Oct 27, 2008 10:23AM
Fuck those guys. They are such ostentatious consumers when prices are high and everyone else in the world is getting gouged. I feel no pity for them and their pathetic mysogynistic regimes.
The quicker we can develop a viable alternative energy source, the quicker the world can go back to ignoring them.
Posted by guest , Oct 27, 2008 10:31AM
@2 how bout Anwar, off shore (FL, CA, etc) and many interior states have oil. The shale in CO WY areas. That should help get us through until we have AES and we can go back to ignoring those ass wipes.
Posted by guest , Oct 27, 2008 10:32AM
Too long, didn't read.
Posted by guest , Oct 27, 2008 10:34AM
@3
YEEEHAW! WHOOT!
When we scoop up all this free oil in Alaska, we'll send em back to Arabi!
That'll learn 'em good!
Posted by guest , Oct 27, 2008 10:36AM
the ka'aba shoulda been nuked 12SEP01
"War on Terra" is a pathetic joke
Mecca delenda est, baby
Posted by guest , Oct 27, 2008 10:36AM
@3,
hemp, dude.
Posted by guest , Oct 27, 2008 10:38AM
I can now get that Dubai condo for under 3,000,000 whadabahgin
Posted by guest , Oct 27, 2008 10:38AM
9 if we used a little less oil they would have been shafted even sooner. Problem is that guys with small dicks need to drive hummers and escalades to compensate.
Posted by guest , Oct 27, 2008 10:39AM
@ 9 -- you're gayer than a radio-thrusting transit cop
Posted by guest , Oct 27, 2008 10:39AM
WHOOOT!!
Posted by guest , Oct 27, 2008 10:40AM
Ehhh....Gulf markets tanked hard in 2006 and never made it back to their peaks.
Posted by guest , Oct 27, 2008 10:42AM
@15 - yeah! Whooot! Yeehawww!
WHOOT WHOOT!
Ford F150s, whoot!
Posted by guest , Oct 27, 2008 10:49AM
@ 16
die hippie, die!
Posted by guest , Oct 27, 2008 10:50AM
Arabs are lazy bastards. Don't want to work, don't want to learn.
I fucking hate petro-states. I've convinced that oil is a curse on a nation's culture. It's like trust fund kids. You never have to do anything for yourself, so you don't learn how.
Posted by guest , Oct 27, 2008 10:51AM
fuck these morons. If the middle east really wanted to extend an olive branch to their western brethren than they would keepp prices DOWN. Why the fuck are we always placating these one way fuckers. fuck Off!!!!
Posted by guest , Oct 27, 2008 10:54AM
19 We're placating them cause America's prosperity and way of life is totally dependent on cheep oil. Is that so hard to figure out?
Posted by guest , Oct 27, 2008 10:56AM
@18
I'm a trust fund kid. What is how?
Posted by guest , Oct 27, 2008 10:56AM
All we are saying is give peace a chance.....
Posted by prgy , Oct 27, 2008 10:58AM
Hey @ 20. Thank you for your insight and fulfilling answer. You obiviously have a firm grasp on Middle Eastern geo-politico problems.
Posted by guest , Oct 27, 2008 10:58AM
@23 WHOOOT!
Posted by guest , Oct 27, 2008 11:03AM
@25 thats the same sound your mother makes every time i let my dog have its way with her...
Posted by guest , Oct 27, 2008 11:03AM
Looks like Kuwait and Saudi Arabia had the right idea when they budgeted for low price oil.
If the traders walk out of the exchange, doesn't that already prop up the prices if there's no volume? ;p
Posted by guest , Oct 27, 2008 11:06AM
can't say i feel sorry for opec
but the biggest fuck you to them will be when we stop depending on oil
green baby green
Posted by guest , Oct 27, 2008 11:08AM
EP, Dubai never had much oil to begin with and whatever limited reserves they had are all but gone (Abu Dhabi on the other hand is a different story - not all the emirates are created alike).
To lump Dubai and Kuwait together is beyond absurd. What was the point of writing such a mis-informed post other than to draw the bigots out of the woodworks? But I suppose that was the point, eh?
So you find it hard to feel sorry for Kuwaiti traders because they call for government intervention? Because that's just so rare and unprecedented in these troubled times.
Posted by guest , Oct 27, 2008 11:10AM
@28- tell us how you really feel.
Jerk.
Posted by guest , Oct 27, 2008 11:11AM
The long-term prosperity of a nation has ZERO correlation to the amount of natural resources that nation possesses. Similarly, there has never been a natural resource that has gone to infinity in price (thereby giving those who possess it total domination of those who don't. At some price point, humans WILL find alternatives.) Given all of this, why are we stressing about the middle east? If they continue to operate regimes of intolerance and without intellectual freedom, they will continually becoming poorer and poorer (over the long run) until they self destruct. (via civil war, or via emmigration to free-mind free-market governments.) It's up to the gulf states to change themselves, there's nothing outsiders can do to fundementally help them.
Posted by guest , Oct 27, 2008 11:14AM
24 If its not about oil, then what is it about?
Posted by guest , Oct 27, 2008 11:15AM
@33
not agree fully, take Singapore - an example of how natural resources can significantly speed up development and wealth creation. The key, of course, are implementing the right policies and focussing on eduction, hard work and qualified immigration, but some oil cash can definitely help.
Posted by guest , Oct 27, 2008 11:24AM
36-
Are you serious? Singapore is the poster child of an economy that has quickly developed with absolutely zero natural resources (besides an excellent natural harbor.) Singapore has a decent oil-refining industry, but must import the crude.
Posted by guest , Oct 27, 2008 11:26AM
@36
What natural resources does Singapore have in abundance besides seawater and humidity again?
Posted by guest , Oct 27, 2008 11:31AM
LOL ! the petro-states are your allies you retarded americans ! they were mimicking your stupids ways. Stupid terrorists managed to lure your dumb and obese population into more stupidity (eating/shopping/gambling and bombing). Terrorists (bush included) destroyed your country. It was about time. No STFU.
Posted by guest , Oct 27, 2008 11:33AM
@36-38
Singapore is a bad eg. Try Iceland bitches.
Full of fishes!
Posted by guest , Oct 27, 2008 11:33AM
@39 - YEEEHAW & WHOOT!
Posted by guest , Oct 27, 2008 11:33AM
@33.. free market governments? free minded governments? Where will they find that?
Posted by guest , Oct 27, 2008 11:37AM
@ 39
Yes, that's right. America is a smoking crater, left in ashes by the reign of George Bush. We are filled with crumbling cities and a starving populace that fights daily for survival.
Go back to Jackassistan or whatever cave you crawled out of.
Posted by diablo , Oct 27, 2008 11:39AM
Dubai has a lot going for it (money laundering industry). It's not about oil in Dubai.
Posted by guest , Oct 27, 2008 11:40AM
HNIC?
Posted by guest , Oct 27, 2008 11:40AM
THEY TOOK OUR JOBS!
Posted by girl , Oct 27, 2008 12:02PM
@ EP
You seem especially skilled at pandering to idiots, and now you count bigots amongst your fans as well. Surely there's a better way at garnering a response- like perhaps, being a more skilled writer.
@ All the other posters on this board:
I find it hilarious that less than 20% of Americans own passports, and you have the gall to call Arabs unsophisticated and uncultured. Get off your insular, ignorant, fat fucking asses and see the world, then report back to me.
I am utterly disgusted at the comments made on this board. If you inserted "jew" everywhere "Arab" is mentioned it would be indistinguishable from Mein Kampf.
Posted by guest , Oct 27, 2008 12:04PM
40 I don't need to see the world. I've been to Epcot.
Posted by guest , Oct 27, 2008 12:19PM
@ 40:
I see that you're a chick. That explains your shrill bitching.
Posted by guest , Oct 27, 2008 12:22PM
i'm a jew from europe with a passport can i still talk?
Posted by guest , Oct 27, 2008 12:23PM
'girl' is more like 'self-righteous bitch'
Posted by guest , Oct 27, 2008 12:25PM
you should all leave "girl" alone, if for no reason other than the fact that she has the guts to put a name on her posts.
Posted by guest , Oct 27, 2008 12:32PM
@ 45
Yes, she is a bastion of bravery and free speech posting on an internet forum under an assumed name
Posted by guest , Oct 27, 2008 12:35PM
girl-
Do you realize that if you grew up in saudi arabia, iran, or syria you would have received minimal education, would not be able to wear whatever you'd like outside of the house, would not be able to drive, and would have very little say over who you marry?
I agree that there are plenty in america who need to do some independent thinking, and a wholesale indictment of "arabs" as uncultured (or worse) is ridiculous and unnecessary, but are you going to argue that you'd rather be born into an islamic theocracy than a free-market democracy?
Posted by girl , Oct 27, 2008 12:43PM
Thank you, gentlemen. I'll take self-righteous bitch over dim pushover any day of the week.
@ 47, "I agree that there are plenty in america who need to do some independent thinking, and a wholesale indictment of "arabs" as uncultured (or worse) is ridiculous and unnecessary"
This is the only part of what you said that was pertinent to my response.
Posted by guest , Oct 27, 2008 12:46PM
Be careful bashing the ME (Dubai especially) considering the ME is about the only place that needs ibankers at this point...
Posted by guest , Oct 27, 2008 12:48PM
@47 that's not what she was saying. The views she was espousing was the same homogenous, moral relativist views that liberals are puking up every day.
In her world, criticizing a culture's government or economic policy is the same as being Hitler. Also, anyone not subscribing to her worldview are untravelled, uncultured hicks that only post on DB in between trips to WalMart and viewings of Jerry Springer.
Posted by guest , Oct 27, 2008 12:51PM
@ 119 - shut up you are a douchebag
-Moneygrip Wisdom
Posted by guest , Oct 27, 2008 12:54PM
girl-
When you say, "you have the gall to call Arabs unsophisticated and uncultured," your tone (whether intended or not) indicates that you personally find arabs sophisticated and cultured. While there is certainly a "culture" over there, I don't know that I'd call it "sophisticated." (Partially for some of the reasons I outlined above.) Furthermore, stating that 80% of americans don't own passports and then extending that statistic to the dealbreaker posters is intellectually shallow. How else are we going to do all those sweet due dilligence trips to Peru?
47
Posted by guest , Oct 27, 2008 12:59PM
http://www.nytimes.com/2008/06/19/business/19drillship.html their markets will come back expect a couple more commodity swings over 10 year horizon
Posted by guest , Oct 27, 2008 1:05PM
@38 - new theme or old theme?
Posted by guest , Oct 27, 2008 1:07PM
so girl how much time exactly have you spent in the ME? i worked there a lot and you wouldnt even be granted an entry visum to saudi without your husband coming along. in that case he would get a visum and you would be considered his pet/luggage. and oh, if you would go to a starbucks and talk to an unknown man you could face death by stoning.
how a bout that for cultured, girl?
Posted by girl , Oct 27, 2008 1:09PM
@ 52
I dont have time for an extended debate this afternoon but, I will say the following: I judge sophistication on the level of intellectual knowledge the average person has. Having a) grown up in a small town in the midwest and b) done extensive medical relief in small villages throughout the middle east, my humble opinion is that the average Syrian farmer knows a great deal more about international politics/the human condition/any number of other things than the average farmer in Indiana. This doesnt equate to my wanting to take up residence there, but as an American I certainly had alot of enlightening conversations on that side of the pond.
Basing a belief on educated opinion (instead of misinformation) isn't exactly intellectually shallow. But you are, in the end, entitled to your opinion and I'm certainly entitled to mine.
Enjoy Peru...
Posted by guest , Oct 27, 2008 1:13PM
girl, you must either be an arab or a crab.
Posted by guest , Oct 27, 2008 1:31PM
girl-
I've never met an american (or syrian) farmer, but I have talked to plenty of NYC cab drivers--many of whom are much better informed about int'l politics and humanity in general than your average american. That said, these guys also had the sense to come here to carve out a new life rather than syria. I feel for those born over there that haven't had much choice in the matter, but the usa is still far superior intellectually and culturally.
Posted by guest , Oct 27, 2008 1:58PM
@52 (girl)
The bias and disdain that you show against small-town America is quite common amongst those who have "escaped" the midwest and now view their background with a combination of condescension and embarrassment.
I can assure you that the average Indiana farmer is VASTLY more knowledgable than the average third world substinance farmer. Given the fact that a third world goat herder wouldn't know how to use an ATM, drive in the city, turn on a PC, send an email, or otherwise function in a society more than one step removed from the stone age. I'm sure that their ability to get water from the desert has appealed to your idealism, but that does NOT make them inherently superior to farmers in Indiana, no matter what you choose to believe.
It is obvious that you look upon yourself as superior to those you grew up with, assumedly because you have more travel experience than they do and therefore feel entitled to cloak yourself in an air of superiority. You may be surprised to know that international travel is not a prerequisite for intelligence. For instance, Immanuel Kant never left Konigsberg and he is one of the greatest philosophers that ever lived.
Posted by girl , Oct 27, 2008 2:11PM
@ 59
Access to email, ATM's and cars does not presuppose the intellectual curiosity of which I speak, and of which I think many Americans are in dangerously severe deficit. This is a statement not on the people of my town but on people across this country, who have no shame in calling Arabs lazy, unsophisticated, dangerous. Please, don't equate my intolerance of this garbage to my superiority complex. It's in poor form.
Posted by guest , Oct 27, 2008 2:20PM
Hey DB,
While it's difficult to have sympathy for oil traders it is interesting to know what the B/E for barrel prices per country is.
Thanks
Posted by guest , Oct 27, 2008 2:22PM
Girl,
You obviously don't come from Dearborn, MI.
Posted by guest , Oct 27, 2008 2:31PM
@ girl:
"my humble opinion is that the average Syrian farmer knows a great deal more about international politics/the human condition/any number of other things than the average farmer in Indiana."
You were speaking about accrued knowledge, i.e., how to do things/function in society. Now you have changed tack and claimed that you were speaking of "intellectual curiosity", and are judging Americans for supposedly lacking it.
Tell me again how intellectual curiosity fits in with female genital mutilation, stoning, and Islamic fundamentalism. In your precious Syria, a state of emergency denying the populace freedom of speech, religion, assembly, the the press has been in effect since 1963. The Secret Service in Syria makes it a point to harrass and intimidate homosexuals. Maybe the reasons the Syrians are so "intellectually curious" is because their government doesn't let them learn anything.
Posted by guest , Oct 27, 2008 3:49PM
47:
1. Women in Iran and Syria can drive.
2. The proportion of women in engineering and science and technology programs in Iranian universities is higher than in American universities.
3. Iran is not an Arab state
@63:
1. Female genital mutilation is practiced in North Africa, not the Middle East. It is not an Islamic practice.
2. Syria does not have sharia, so the stoning of women does not arise.
EP, I'll be sad if your thoughtless posts undo the good work that Bess has been doing here. It's always a pleasure to read her. In future, I'll remember to skip anything that comes with your byline
Posted by guest , Oct 27, 2008 3:52PM
47:
1. Women in Iran and Syria can drive.
2. The proportion of women in engineering and science and technology programs in Iranian universities is higher than in American universities.
3. Iran is not an Arab state
@63:
1. Female genital mutilation is practiced in North Africa, not the Middle East. It is not an Islamic practice.
2. Syria does not have sharia, so the stoning of women does not arise.
EP, I'll be sad if your thoughtless posts undo the good work that Bess has been doing here. It's always a pleasure to read her. In future, I'll remember to skip anything that comes with your byline
Posted by guest , Oct 27, 2008 4:12PM
@ 65
63 here. I quote the BBC:
In the Middle East, female circumcision is practised in the Yemen, Saudi Arabia, Iraq, Jordan and Syria.
http://www.bbc.co.uk/ethics/femalecircumcision/femalecirc_1.shtml
It IS an Islamic practice. You fail.
Stoning and "honor killings" of girls in Syria is commonplace. I refer you to this website:
http://www.stop-stoning.org/cases?page=1
Both of these sources were the result of a ten second Google search. Try it next time, unless you yourself are from Syria and have no access to Google.
Posted by guest , Oct 27, 2008 9:54PM
@ 66 Everybody must get Stoned!
I spotted the terrorist! He was headed down Backalackadacka Street!
Posted by guest , Oct 27, 2008 10:58PM
Girl, hey baby when was the last time you walked around anywhere in the ME? I was in Dubai last week and it was much different than a few months prior...this time there were more starving Russian hotties selling themselves. Every been to Djibouti? Probably not because you wouldn't be walking away from the infection after they sewed up your labia. Go ahead and say what you will but I am a man and everyone wants to kill me because I am white here...you think you have a shot? There are exceptions, but Girl you'd be buried in the sand after a few hours walking around Riyadh. You fucking kill me. As for culture, some of the mosques and their Mosaics are quite nice, give 'em that. But talk about n$!!@# rich...ever been in the Burj? That place makes Henry Hill's place in GF look like an IM Pei. So So whatever your background, and because I am almost always here have some friends who are natives, just wake the fuck up and realize that these people are savages. Know why you don't touch food with your left hand in Iraq, some parts of Iran and Syria? Because it is unclean. Not because of some religious belief but because they wipe their ass with it. Grow up and stop acting like a child, some people suck (Arabs) and some don't (Americans..well as much). Oh, and to that 17 year old who blew by me in the Bugatti Veyron last week on Zayed Road before Jumeirah at 200...great training for the job you'll secure as a NYC taxi driver once you and your 75 siblings have to split the remaining three grand left in your father's checking account and sans black card.