Congratulations to the People of Egypt - May the Transition Be Peaceful and Fruitful

A Personal message to the people of Egypt

I would like to congratulate the people of Egypt for their determination to bring about peaceful change to their country and to begin what we all hope will be a more prosperous future for all Egyptians. This revolution would have made even the Founding Fathers of US proud. A truly historic moment in Middle Eastern political history, which has echoed the fall of the Berlin Wall that led to a seismic shift throughout vast swathes of central and eastern Europe.

Already your actions have propelled others into action in countries like Yemen, Algeria & Jordan who seek a more equal, fair and democratic society.

Also I would like to take this moment to praise al-Jazeera's coverage of the events in Egypt that have taken place over the last 18 days. The network has provided unrivalled coverage of this historic moment in the countries proud history and continues in my opinion to be the leader in the field of providing international affairs news.

Continuing live coverage can be found here http://english.aljazeera.net/watch_now/

The Moment of Mubarak's Resignation - Jubilation in Tahrir Square

Egypt Maintains Business as Normal Away from the Media Spotlight - Live Stream via http://english.aljazeera.net/watch_now/

Source: http://www.theglobeandmail.com/report-on-business/egypts-suez-canal-still-open-for-business/article1889511/

Additionally looking at sea traffic surrounding the port of Alexandria, life would appear to be proceeding as normal - see below diagram.

Source: http://www.marinetraffic.com/ais/

What can clearly been seen here is there are a substantial amount of Cargo vessels and oil tankers in and around the port. Notice the highlighted section in the center at the bottom which shows the quantity of vessels in range of this map, which demonstrates there is still a substantial amount of activity around Egypt. This goes against the mainstream media, which has focused almost solely on the demonstration in Cairo while paying little attention to other areas of Egypt which some would argue are more significant. Since it is the ports and oil industry are the lifeblood of the Egyptian economy which has been growing at or around 7% annually since 2005.

Also the below picture shows just how close the primary oil pipeline in Egypt the "Sumed Pipeline" runs to Cairo, which throughout the crisis has continued to flow without disruption.

Source: http://www.eia.doe.gov/emeu/cabs/Egypt/Suez.html

This has been the main course of concern for investors, which is why you have seen a spike in the volatility of oil price recently with Brent Crude oil soaring above $100 a barrel in London. However upon hearing the news of Mubarak's resignation earlier today oil prices have dipped below pre-crisis levels.

A huge investor in Egypt's oil is the US oil major Apache, which gets approximately 24% of its revenue from Egypt. (see below chart) has seen a negative impact on its share price as the tensions have escalated throughout Egypt. Investors reasoning behind this was because of the potential for supply disruptions and potential for the government or military to cut of supplies or force out western companies as part of a backlash against America or the west in general.

Source: http://www.apachecorp.com/Operations/Egypt/index.aspx

After the announcement of Mubarak's resignation, investors can clearly be seen moving into shares of Apache as confidence of potential supply disruptions eased.

Source: http://www.nasdaq.com/aspx/chartingbasics.aspx?intraday=on&timeframe=intra&splits=off&earnings=off&movingaverage=None&lowerstudy=volume&comparison=off&index=&drilldown=off&symbol=APA&selected=APA

To conclude, despite all the attention by the mainstream media on the events in Tahrir Square, business through trade and commerce continues virtually unabated throughout Egypt.

Investors Appear to Welcome Mubaraks Resignation - Evidence the EGPT

The huge spike on substantial volume in shares of the EGPT Exchange Traded Fund would appear to highlight investor optimism.

Souce: http://stockcharts.com/h-sc/ui?s=EGPT

Just looking at the surge in the price of shares in the EGPT ETF on substantial volume shows that after news initially broke that Mubarak was resigning that investors would appear to welcome the news. This Exchange Traded Fund has been coined the futures exchange for the main Egyptian market, which has been closed for nearly two weeks. Also the MACD (see bottom section of chart) shows that there is clearly upward momentum in this ETF, especially in light of the huge pessimism that was prevalent during the past two weeks.

Also notice that the share price has almost recovered to pre-crisis levels. Another potentially good sign.

A Military Coup or Not? - Egypt

The main question surrounding the resignation of Hosni Mubarak will be the that the role that the military has played given the significance of the meeting of the Supreme Council of Armed Forces which took place yesterday (see previous post).

Also what is significant is that the communique that was released yesterday after the meeting coined "communique number 1" - this, commentators were saying was possible the first document of the new Egyptian regime. Now in the light of hindsight it would appear that this document was the 'first document of the new regime' in Egypt from the armed forces who appear now to be in control of the country.

The Egyptian Constitution can be found here: http://www.egypt.gov.eg/english/laws/constitution/default.aspx

Amusing Tweets Regarding Mubarak

From @50RM

"new dictionary word Mubarak (n.): a psychotic ex-boyfriend/ex-girlfriend who fails to understand its over"

Also long similar lines @HUSSEINANWAR tweets

"no, Mubarak is another word for glue. I will "Mubarak" my poster on the wall... for example"

and finally from @BOROWITZREPORT

"Mubarak is now officially Egypts first zombie president"

Tweets courtest of Al-Jazeera.

The End of Ultra-Low Mortgages in the US.

Recent data released in US shows that the average 30-year fixed rate mortgage has exceeded 5% for the first time in 10months, rates now stands at 5.05%. To put this into perspective the average monthly cost for $300,000 home loan now stands $1,620 compared to $1,462 just a few months ago.

This has the potential to severely dent US consumer confidence, the consumer being the a primary driver of economic growth given that they contribute up to 70% of the GDP.

Furthermore, a report released by the Federal Reserve a couple of weeks ago, highlighted that the housing market remains "depressed". Adding to these concerns is the number of foreclosures in December, which stood at 2.2m (a record). Add to that rising home prices, which increased by 0.2% in the fourth quarter of 2010, still leaves significant room for improvement in the US housing market.