As the markets slid south 1-3% on Friday, I got a phone call from a journalist looking for a quote about Egypt: “What does this mean to the markets?”

My honest answer was “I have no idea.” While Egypt isn’t an oil nation, maybe there is a contagion effect of regional destabilization. I have no expertise in Middle Eastern politics; figuring out what the likely cascade of effects might be is far beyond my abilities.

So too the markets. They seem to have shrugged off the video images of protesting crowds clashing with police.


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Category: Current Affairs, War/Defense

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15 Responses to “US Markets Shrug Off Egypt Unrest”

  1. Lariat1 says:

    Wall Street might shrug Egypt off but how long can they dismiss the middle class?


    BR: Years, maybe decades, before it ends badly . . .
    (Ask Marie Antoinette)

  2. JerseyCynic says:

    “Though Egypt doesn’t produce much oil, it controls the Suez Canal and a major pipeline that exports two million barrels of oil from the Persian Gulf.  Oil industry analysts predict that in the worst case scenario the Suez Canal will shut down and revolt will spread throughout the Arab world, which could interrupt production.

    “You start getting into a doomsday scenario, where you do get very high oil prices.  But you are going to see more than the price of oil affected.  You are going to see the world economy effected everywhere,” Robin West, an oil industry analyst said.

  3. JerseyCynic says:

    “……West added that it is very unlikely the effects will be that widespread.  There may be short-term volatility, but whoever is in charge of Egypt will want to make money, so they will find a way to sell oil, he said.

  4. JerseyCynic says:

    The public’s memory gets shorter and shorter these days. But, the events in egypt just may linger long enough until the next revolt, and the next, and ….

    Get ready folks.

  5. JB7456 says:

    This isn’t about oil. It’s about food. Here’s what’s happening as it happens…there are 3 boxes at the top of each column. If it doesn’t load with Egypt, Sudan Syria Jordan, and Food shortage then type those in and you’ll see where this is headed. Massive protests being organized in those countries also. The futures are up actually this morning. I would suggest unloading on to whoever is stupid enough to be buying.

  6. foosion says:

    The market moved last week. Egypt has now been priced in. Unless something unexpected happens, why should it move more?

  7. JerseyCynic says:

    Warning over food shortages from MARCH 2008!…

    Thousands protesting in Egypt

    And we’ve been their allies these past three years?.

    Thank you twitter!

  8. rktbrkr says:

    2% of oil and 8% of all stuff transits the canal so it’s not a make it/break it situation.

    Whoever replaces Mubarek won’t be plied as easily by US & Israel.The Egyptian military has proven inept time and again so there is no real military threat against Israel but this could provide Israel with an opportunity to take out Iranian nuclear facilities and worldwide stock & commodity markets would certainly respond to that.

    elBaradai seems too aloof and detached to appeal to the man in the street in Cairo, he’ll get Sadated by some fire breathing Col.

    The other 800lb gorilla is if the arab political turmoil in Egypt and Tunisia spreads to the Oildoms

  9. Robespierre says:

    @JB7456 Says:
    January 31st, 2011 at 6:40 am

    “This isn’t about oil. It’s about food.”

    Agreed. Despite what you hear on MSN this is all about food and very little about democracy or freedom. Expect other countries to either stockpile supplies (driving prices up) or face shortages severe enough to cause civil unrest. It seems that Dr. Ben will finally eventually get his wish of creating inflation in the US, to bad he needs to slash and burn 3rd world countries to achieve his goal.

  10. rip says:

    @robespierre: Correct. Ben has given the elite speculators all the gasoline they need.

  11. Floyd says:

    It is hard to topple a tyrant.
    It is way harder to establish a true democracy.

    Democracy starts at home, your spouse stating what’s on her mind, your daughter flirting with the neighbors son with little fear of her parents response.
    Do you really expect that anytime soon in the MidEast?

    We may be seeing the populace ridding themselves from a tyrant.
    It is wishful thinking to expect anything better.

    Recall that Egypt is heading an implosion due to its out of control population growth, 2x every 30 years (if not faster). Replacing Mubarak won’t solve that.

  12. rktbrkr says:

    If oil spikes to new records (and commodities and food follow) then Ben B’s wish for higher inflation comes true as these costs ripple thru the economy. MISSION ACCOMPLISHED!

  13. riffraff says:

    Not so fast….

    “China Blocks Some Internet Reports on Egypt Protests”

  14. Rescission says:

    85% of the stores in Egypt are now closed. People are holed up in their homes, but getting low on supplies.
    Neighborhoods are organizing their men to patrol their own streets to keep out the vandals. This is information from a couple living there.

  15. louis says:

    Did we have a mini flash on the VIX today at about 1pm?