U.S. Stock Futures Decline on Concern Egypt May Slow Recovery
Bloomberg/Jan 30
U.S. stock-index futures fell, indicating the Standard & Poor’s 500 Index may extend the biggest decline since August, as investors speculated Egypt’s crisis will slow the global recovery… “The situation in Egypt is the catalyst for a downturn,” said James Paulsen, chief investment strategist at Minneapolis- based Wells Capital Management, which oversees about $340 billion. “We have a market that is vulnerable to a technical correction. There’s an investor mindset that’s been expecting that to happen for a while now, given where the market is and how fast it’s come up.”

Egyptian Unrest Has Repercussions in Global Economy
Wall Street Journal/Jan 30
The Egyptian economy is relatively small, with total output of just about $217 billion last year. But the nation carries outsize importance as home to the Suez Canal, a key shipping route for oil and other products between the Red Sea and Mediterranean. Apart from oil, about 8% of the world’s seaborne trade passes through the Suez canal, according to Egyptian government figures. Over the weekend, a dusk-to-dawn curfew across the country caused shippers operating in the canal to warn customers of potential delays. Canal traffic has continued unhindered through the protests. But if the violence in Egypt spreads to its oil-producing neighbors, crude prices will likely top $100 a barrel, which would damp an economic recovery gaining momentum in many countries.
Second Suez Crisis
Ground Report/Jan 30
Egypt matters for one reason — the Suez Canal. The Suez Canal carries 10% of world trade and 4.5% of world oil production. Shut down the Canal and the world economy takes a tumble. Right now, the world economy can’t handle such an exogenous shock. The global economy would sink back into recession and the fiscal crisis would re-ignite. Governments would default in Europe. States would declare insolvency in the United States. Food prices and energy would sky rocket in the emerging markets. Stock markets will collapse. A wave of political upheaval would sweep the Mideast and then the world. Hosni Mubarak should not step down and flee Egypt like Ben Ali did in Tunisia. If he does, the Egypt unrest will immediately radicalize.
U.S. stock market falls as Egypt unrest continues
Washington Post/Jan 29
Egypt is central to U.S. interests in the Middle East as a moderate state and a key player in both counterterrorism operations and regional peace negotiations, said Helima L. Croft, a geopolitical analyst at Barclays Capital. If street protests were to end President Hosni Mubarak’s nearly 30-year hold on power, “I think there would be a fear that you could see radicalism sweeping across the Middle East,” Croft said, adding that the fear might be unfounded.
In Egypt, the Time Has Come for Mubarak to Go
Brookings Institution/Jan 29
Since the Nixon-Kissinger era, Egypt has served as the strategic cornerstone of U.S. policy in this volatile region. As the largest, militarily most powerful, and culturally most influential country in the Arab world, Egypt has disproportionate influence on the course of events there. And the Egyptian-U.S. alliance has been fundamentally important both to war and peace in the Middle East.
Egypt Spurs Jump in Developing Money-Market Rates
Bloomberg/Jan 30
Money-market rates in developing nations are increasing at the fastest pace since 2008 as central banks from China to Brazil lift borrowing costs and banks hoard cash on concern unrest in Egypt may destabilize the Middle East.
Egyptian standoff: Mubarak stays, army won’t oust him and people stand fast
DEBKA/Jan 30
debkafile’s Middle East sources report that the Egyptian crisis looks like being in for a protracted period of uncertainty unless the army, which holds the key to breaking the deadlock, decided to step in and pick a side -Mubarak or the people. The generals alone have the clout to force Mubarak to step down and get out, as happened in Tunisia, or smash the street demonstrations. This would mean a massacre, the army’s identification with a repressive regime and the end of its historic acceptance as the people’s army. It will be noted that the new Vice President Gen. Omar Suleiman, 76, is seen more as a loyalist of the president, whom he served as intelligence minster and strong arm, than the military.
Israel ‘anxiously monitoring’ turmoil in Egypt
LA Times/Jan 30
The political upheaval could threaten the decades-old alliance between the neighbors, the cornerstone of Israel’s regional strategy.
Arab Elite Say Monarchies Are Safe From Unrest
New York Times/Jan 30
The unrest engulfing Egypt caught business and political leaders at the World Economic Forum off guard, but it became the hottest topic among the Arab elite here… Few of the executives present expected a revolution to spread across the oil-rich nations of the Gulf, where the governments are monarchies, which often do not create the types of expectations that accompany a democracy. Rulers in these countries use their oil wealth to invest in social stability by ensuring that their own people lead comfortable lives through subsidies on things like electricity, education and food. “Saudi Arabia and the Gulf countries are going to be spared because they are not democratic regimes,” said Jamal Khashoggi, the general manager of Al Waleed 24 News Channel. People in those countries “don’t feel cheated because there are no elections,” he said.