Middle East and the Stock Market

[Equity Trader]

The situation in the Middle East will over shadow everything here at home and will determin what will happen with the market..This is a major caucern and how it is played out will depend on Arafat and his friends who have an interest in oil..

The elections here will be a major factor on the Arab and Israel problem.Clinton/Gore are pro Israel and Arafat and his croonies might feel that a Bush ticket would be to their interests.In order for them to curb U.S. elections would be to disrupt production of oil thus keep the prices at current levels and with winter setting in here and the reflection to the market,would certainly mean a Bush/Chaney win.

The overall bear in this market is very real,and will persist probably for the remainder of the year.

After 10 years of an excellent stock market ride,it seems that a correction is in order and for us to move once again in the forward motion.This will only happen after the situation in the Middle East and improved corporate earnings once again dominate the news.

Have a great week everyone and we will prevail.

(

 

[IX_Bender]

Sharm el-Sheikh, Egypt, Oct. 17 (Bloomberg) -- Israeli and Palestinian leaders agreed to call for an end to recent violence and consult with the U.S. within two weeks on a possible resumption of peace talks, U.S. President Bill Clinton said.

Israeli Prime Minister Ehud Barak and Palestinian leader Yasser Arafat also agreed to an international commission to investigate the violence, Clinton said. Israel agreed to withdraw its forces to positions held before the unrest began and lift the closure of the West Bank and Gaza Strip.

``We have made important commitments here today against a backdrop of tragedy and crisis,'' Clinton said at the conclusion of an emergency summit in Sharm el-Sheikh, Egypt. ``We should have no illusions about the difficulties ahead.''

In the West Bank and Gaza Strip, where more than 110 people have died in clashes between Israelis and Palestinians since Sept. 28, violence continued after the agreement was announced. Palestinians said the pact didn't respond to some of their basic demands, such as an independent state.

A Palestinian policeman was killed when Israeli soldiers fired at stone-throwing protesters at a border crossing near Gaza City, Agence France-Presse reported. In the West Bank city of Ramallah, demonstrators marched through the streets to protest the agreement.

``Arafat will not succeed in stopping the Palestinian street,'' said Husam Khader, a member of the Palestinian Legislative Council. ``Lifting the siege may calm down the situation but will not end our intifada. The conflict will end with a political agreement that recognizes our rights in Jerusalem and the right of return for refugees.''

Implementation

Barak cautioned that the success of the agreements reached today should be measured by what steps both sides take to end the violence.

``The test will be in implementation,'' he told reporters. ``I suggest to everyone that you look less at gestures and look more at events on the ground.''

Clinton yesterday warned that a failure of the summit could spell an end to the Middle East peace process, which almost produced an overall settlement between the Israelis and Palestinians in July.

Even with today's agreement, a resumption of peace talks isn't guaranteed, people on all sides said.

The Israelis and Palestinians agreed only to send delegations to Washington within two weeks to assess the possibility of a new round of talks, said a U.S. official who briefed reporters after the summit. Others said the fact that Arafat and Barak have agreed to discuss the resumption of peace talks suggests they want the negotiations to resume.

``The peace process isn't dead but the Oslo process, the idea of a permanent status agreement that Barak was ready to accept at Camp David, is completely dead,'' said Gerald Steinberg, a political scientist at Bar Ilan University in Tel Aviv. ``There are alternatives, but anything will have to be linked to Palestinian behavior in the future.''

 

[selkirk]

first Equity trader glad you are posting and getting this forum going. I have heard many experts agree with many of your points however here are my thoughts on the situation.

1.)There is no chance for an oil embargo. If they announce they will not go through with it. Iran and Iraq are two countries that do not have "great relationships" with the west however they are still producing oil. Why? Because if they stop their economies will go in the tank.

2.)Arafat and the PLO have no major oil production, and Syria will get involved if Israel invades Lebanon. Something they say they will not do.

3.) Saudia Arabia has warned of "blunt action" if Israel continues their actions in the streets. What are they going to do, they cannot go to war, especially with US military bases on their soil, how could the US justify military spending in Saudi Arabia if they went to war against their main ally in the region.

Saudi Arabia monarchy will be overthrown in time (maybe years, decades) but it will happen. Saudi Arabia must sound tough since they fear moslem revolution.
in 1979 244 people killed, and 1987 400 were killed at clashes around Mecca.
they have to sound tough. however the end is coming for the monarchy.

4.) Assad son who just took over will want more trade with the west and lower the 30% youth unemployment, he must improve the economy to stay in power, or else brutally put down rebellions like his father. I think he will try the economy first.

5.) Saddam Hussein could raise prices by stopping oil from flowing, however he need money. UN allows money for basic needs. The people have suffered greatly in Iraq (by the way at the end of the gulf war, they did rise up against Saddam but were crushed when the allied forces decided not to send in minimum air power to help. now they suffer with sanctions that are designed to get him out of office but really hurt the average citizen and especially children. Saddam is still living well. If the west wanted him out they could have sent air support for the next 2 weeks, better the devil you know, I guess.... to bad for Saddam enemies and the general population). Anyways Saddam sells oil because he has to pay his army and the police to keep him in power.


6.)Opec better get the price below $25, at least $30. Asia is just coming back from a depression, and Europe is not that strong, the US looks like a soft landing but may actually become a hard landing, $40 oil would to now growth in the US.

So let us say OPEC cuts oil production for one month or two, what will they do later. The world economy would not turnaround over night. Demand would plummet and so would the oil price. many of the OPEC countries would face an angry population that quickly could turn to a moslem revolution.

7.)the world would quickly find more oil: there is more oil in the Alberta (oil sands) than in all of Saudi Arabia. just cost billions to get at, not a problem if oil stays above $25 a barrel. most are increasing these programs. Juniors are no longer internet but pushing oil plays. also fuel cell technology is advancing quickly since these companies are well funded they should be able to generate fuel cell cars quicker.

as for the markets they go up and down, I still have to roll up and out to Nortel December $70 cdn.to March $85 cdn. I am waiting and will slowly add more to my portfolio. starting to like companies that trade 10 PE like Alcan. also tech companies not going away so will hold on to my QQQs and my Sci-tech fund (larger stake than the QQQ). they will come back.......

thanks
selkirk