Wednesday, February 23

John Batchelor's latest analysis of Libya crisis: financial markets haven't yet priced in worst of worst-case scenarios for Arab revolt

UPDATE January 24 2:00 AM ET
Reporting last night for NBC television news from Tobruk (which is under the control of the rebels), veteran MENA reporter and NBC Chief Foreign Correspondent Richard Engel (who speaks fluent Arabic) said he'd heard that Libyan soldiers who'd defected were guarding the oil wells. Of course that's a very vague report but it comports with a more detailed one provided yesterday at a Filipino website, Manila Bulletin Online. The Bulletin report was put together from AP and AFP wire service reports; I'll skip to the part about oil facilities:
[...] Protesters claim to control a string of cities, from the Egyptian border in the east – where guards at the crossing fled – to the city of Ajdabiya, about 450 miles (725 kilometers) farther west along the Mediterranean coast, said Tawfiq al-Shahbi, a protest organizer in the eastern city of Tobruk.

Ajdabiya is a key city near the oil fields of central and eastern Libya. Protesters and local tribesmen were protecting several of the fields and facilities around the city, said one resident, Ahmed al-Zawi.

Residents are also guarding one of Libya's main oil export ports, Zuweita, and the pipelines feeding into it, he said. The pipelines are off and several tankers that had been waiting in the port to load left empty, said al-Zawi, who said he visited Zuweita on Tuesday morning. [...]
So I think it stands to reason that at least in the region under the control of the rebels, soldiers have defected in large numbers and thus, are probably guarding or helping to guard the wells, at least in that region. As to whether they'll be able to maintain control of the region is another question.

VOA report on the latest developments in Libya.

See John Batchelor Show website for all the links John provides in the following summary of his Tuesday radio show's discussion of the Libya situation and the al Jazeera video he mentions:
Burn the Wells
By John Batchelor on February 23, 2011 2:37 AM

Spoke Joseph Brusuelas [Bloomberg LLP chief economist], David Kotok [Cumberland Advisors], Pat Lang [Sic Semper Tyrannis blog; former DIA], Larry Johnson [No Quarter blog; former CIA and State], re the threats by Muammar Gaddafi that he will wreck his country and murder Libyans and burn the wells.

The critical detail is what the Libyan anarchy does to the markets. Kotok is very bearish on the markets and said he was longer on cash than at anytime since September 2008, and he wished he had more of the energy sector. Kotok believes oil is a one-way trade to $120 on Brent crude, and it can go much higher.

Pat Lang listened to Gaddafi's speech in Arabic and says that it was even crazier than the English version. We also spoke of the sudden return of King Abdullah of Saudi Arabia to Riyadh from Morocco [where he was recuperating from health problems] at least nine months early. Trouble in the kingdom, with a protest movement planned for after prayers on Friday.

Pat Lang says the Saudis will crush the Bahrain opposition. At evening's end Joe Brusuelas mentioned that he was surprised and spooked about how bearish Kotok is, how grim and certain of worse he found Lang and Johnson. The market has not priced in the worst-case scenario of the Arab revolt.

The worst of worst cases is that Gaddafi survives, and the EU is forced to make deals with a monster.

See the bottom video, from Al Jazeera, of the screams of horror of women watching Gaddafi goons wandering the streets with clubs.
See here for the podcasts of all the show's segments, and here for the schedule for the show, which provides a synopsis of each segment.

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