Bahrain F1 cancelled, Asian stocks slump, oil up
Posted on 22 February 2011 with 1 comment from readers
The Libyan dictator’s whereabouts are unclear after furious denials that he has fled his country. But Bahrain has cancelled the first race of the Formula One season, bowing to security fears amid continuing unrest.
Meanwhile, in overnight trading stocks on all the top Asian markets plunged by two per cent, and the US futures suggest a much lower open today after the holiday on Monday.
Oil price surges
Brent crude oil is almost $108 a barrel, WTI crude near $93 with the tipping point for the US economy around $95-100 a barrel. Libya produces $1.4 million barrels per day and key foreign oil workers have hastily left the country amid scenes of horrific violence. Bond prices are up.
This is a classic flight to safety by the financial markets which were very complacent last week in the face of the mounting chaos across the Arab World. Now greed is giving way to fear as the market’s emotions change.
Last week investors were worried about missing the last uptick in the long bull market rally. Today it looks likely that this is a key reversal point.
The last time markets rallied this far, this fast was in the mid-1930s and that ended with the crash of 1937 (click here). Will it be different this time?
1 Comment posted by readers:
Moody’s cut Japan’s bond outlook to negative. The first of many more, I think.
A major earthquake has hit Christchurch, New Zealand. They said it is on a DIFFERENT fault from the one just last September 4! The damage is heavy this time. They are getting help from Australia this time. http://www.newstalkzb.co.nz has live audio. Live video over the net can’t be viewed outside NZ.
We are all in for a very rough ride if oil exports from the Middle East are reduced.