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September 21, 2008
As Rome burns, economic thoughts from MENA
Well, as we watch the United States nationalise its financial system in fits and starts, rather like the quasi emerging market it has become (I should note that I was amused to read comment somewhere regarding Central Banking and best practice, now that the US central bank has become the handmaiden of its finanance ministry. So much for all that independence talk they've spent the last decade pimping), a moment to look at MENA.
I suppose the Americans can say little about Iran's Gov booting a too uppity Gov of the Cen. Bank, not that one should expect particularly rational comment on Iran from the US at present, regardless.
I must say that the GCC going ahead with the monetary union preps surprised me slightly, insofar as its strikes me their interests are rather divergent at present in terms of policy.... but draft plans and actual execution are not something the Gulf is glued to by habit.
On perhaps the merely amusing side, Rush to the Gulf set to lower salaries speaks to the oversupply of bankers and doubts being expressed that the Gulf is really the boomtown(s) as presented. Dubai rather.... In the same manner, there is a nice set of items to talk about this week, if I get a chance, notably:
- the first signs the Dubai et all Gulf Property Speculation Game is going to splot;
- Capital flight can hit even the most well intentioned little financial black holes...even Dubai Land
- But the oil gusher does allow for very high standards of National Poverty
On the Iranian C. Bank:
Tahmasb Mazaheri, says one ally, was forced by the president to stand down mainly because of his support for tighter monetary policies which have made it difficult for the government to implement its promises of giving cheap loans to the poor and supporting short-term employment projects.
Ah cockamamie emerging market credit schemes. Ah but wait, I bet in the next few months the US is going to produce one even more idiotic than anything that Iran has come up with.
On Dubai Land crash...
When a western banker was carrying out due diligence on a United Arab Emirates bank this year, his conversation with the chief risk officer was somewhat unsettling.“This market isn’t going down – it’s a one-way trade. Real estate and equity here is a once-in-a-century opportunity,” the risk officer told the team of financiers from one of the world’s more conservative banks.
Such an uncharacteristically bullish tenor prompted the banker to quip that the bank should promote the risk officer to head of sales.
That's a risk manager that either needs to be fired or moved out.
Posted by The Lounsbury at September 21, 2008 06:58 PM
Filed Under: Economic Policy
, Foreign Policy & MENA
, MENA Region General
, US Foreign Policy
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Comments
That's a risk manager that either needs to be fired or moved out.
Well, there's an opening in Teheran....
Posted by: matthew hogan at September 21, 2008 09:08 PM
Isn't the 700 bil scheme that leads off that series of FT stories cockamamie enough? I read that Paulson wants absolute power over who gets to manage the money and where it goes, and that he wants it to be beyond the review of the courts.
I can't even begin to imagine something more cockamamie. But I always knew I wasn't much of an original thinker...
As for that risk officer, he would've done just fine in any of the big US banks. I know for a fact, because I helped produce so many of them in my job, that forests were felled to produce every manner of risk reports for the big boys at these big banks. Obviously, either no one read them, or no one understood them. I'm not sure which would be worse.
A halfway decent package. I just want a halfway decent package when we go under, so I can buy a bit of land in the highlands of Mexico, and retire to a life of tequilas & sunshine & watching hummingbirds in the garden & defiling the occasional maid.
Modest dreams, modest dreams...
Posted by: pantom at September 21, 2008 09:25 PM
Rome didn't burn; it died of inflationary currency controls.
Posted by: matthew hogan at September 22, 2008 01:42 PM
Funny, the ban on short selling and some other things make me think of Diocletian's measures indeed.
As for that risk manager, I understand from the quotes he's being moved out where he belongs, in the sales department, provided it's separate from risk management...
Posted by: Shaheen ![[TypeKey Profile Page]](http://www.aqoul.com/nav-commenters.gif)
at September 22, 2008 03:56 PM
