Archive for November, 2008

With his stake in Citigroup (NYSE: C) now self-reported to be less than 4%, Saudi Prince Alwaleed bin Talal bin Abdulaziz Al Saud said Thursday that he will raise it back to 5%, to the same level he purchased back in the early 90′s for around $550M. The decision makes for good conversation in terms of why now, why not earlier, or why at all. But that’s for another time. Let’s not forget that another struggling household name, General Electric (NYSE: GE), which was reported this morning to be looking for SWF funding in Asia, actually has some implicit access to cash from the Gulf, as well.

We are traders all. We barter and bargain, agree then rescind, resume and conclude negotiations for goods and services throughout our lives. We trade because we are inclined by nature to do so, regardless of how we earn our daily bread as defined by the color of our collar, blue or white. It is in our blood.

Next January, President-Elect Barack Obama will be severely tested on many fronts:  a two-theater war; dislocation of global markets; and a mounting environmental crisis that threatens to alter the face of the earth and the security of nations. He will be pressed for answers, not just explanations.

For many, the Middle East is the nexus of terror, provoking wars of intervention, and oil, which has created untold wealth for the region and pollution as a by-product of a fuel-addicted world. It is also a land of over 300 million people, where industry, entrepreneurship, and direct foreign investment have fed a development boom of unprecedented scale. Though Gulf states in particular have felt the effects of the current financial crisis, resulting in plummeting home prices in Dubai and the court-ordered closure of the Kuwait stock exchange, the Middle East’s influence in world markets is uncontested.

We urge the President-Elect to seize the moment and let trade flow freely into this intersection of the world, supplanting terror and war by transforming oil-dependent economies into highly diverse, fully integrated drivers of global growth and opportunity.

Let trade also rebalance a troubled region that for the past 60 years has employed a Cold War model with Israel as the sole arbiter of U.S. and Western interests.

Let trade transcend language, culture, and faith as democracies and theocracies find concord through commerce, with prosperity and security the dividends.

Double whammy: declining oil production, beyond what the IEA had previously thought, combined with the high costs of finding new oil, compel the IEA to double its long-term price expectation ($200 oil by 2030; first things first: $100+ avg per bbl from 2008-2015). Details in the clip below by way of the FT.

clipped from www.ft.com IEA predicts oil price to rebound to $100 Oil prices will rebound to more than $100 a barrel as soon as the world economy recovers, and will exceed $200 by 2030, the International Energy Agency will say in its flagship report to be published next week. “While market imbalances could temporarily cause prices to fall back, it is becoming increasingly apparent that the era of cheap oil is over,” the report states.