Category Archives: Finance

Trump Economics, Friedman Economics: the Oligarchy, the Swamp, and the Cesspool…….

Shuwaikh-school1 Me1 (2)Sharqeya-Baneen-15

KuwaitCox2 Hiking

And the beat goes on……
This time I’ll keep my feet on solid ground
Now I understand myself when I’m down
Like the sweet sound of hip music
There’ll always be something new
To keep the tables turning
Hey, this super song
There’ll never be an ending…
And the beat goes on……”    
The Whispers

Betting Against Trump Was a Market-Beater. The companies the president disparaged have done much better than those he favored. Remember when President Donald Trump would call out a company by name, causing its stock price to gyrate madly, whacking a few billions off its market value with just one offhanded tweet? ……. Looking back on this one year later is revealing. From the November 2016 election until when we looked at it January 2017, the Oligarch Index was thoroughly trouncing the Drain the Swamp Index, 15.8 percent to 3.5 percent. Trump hadn’t even been sworn in, yet he was already making his heft felt in the marketplace. Things change…….”

So the famous bi-partisan, lobbyist-driven, Washington Swamp beat the Trump-favored Oligarchy in terms of market performance, at least for the first year. During the past year, the Oligarchy started quickly to morph into what it has always had the potential to be: a Cesspool……….

But still the Oligarchy is not done: it has at least three more years, potentially seven more years. The Swamp will expand and get more odorous for now, become more of a new oligarchy Cesspool. Until the next bubble created by deregulation and natural greed and hubris bursts. Then look out for all the flying “stuff“. Then the new need for “government” help and “regulation”. Back to 2008 and 2009, and……
Perhaps hopefully a more-lasting New Deal (after all, Milton Friedman is dead, along with his brilliant but misguided mind and his Nobel)……….

And the Beat Goes On…..

M Haider Ghuloum

Why Not Liquidate the IMF?………..

Shuwaikh-school1 Me1 (2)Sharqeya-Baneen-15

KuwaitCox2 Hiking

“IMF members delete anti-protectionism pledge, keep currency commitments. Member countries of the International Monetary Fund on Saturday pledged to work to reduce global imbalances but failed to repeat their past pledge to resist all forms of protectionism. The International Monetary and Financial Committee (IMFC), the IMF’s steering body, also repeated its past commitments on currency exchange rates. “We will refrain from competitive devaluations, and will not target our exchange rates for competitive purposes,” the IMFC said……….”

It has been years since I stopped attending the International Monetary Fund (IMF) meetings (annual, semi-annual, etc). So now is the time for me to ask: Why not liquidate the IMF?
I was never impressed with the people I met there, nor with their tailor-made policies: tailor made to satisfy richer countries, tailor-made to squeeze poorer countries. All written up by their Gucci-clad, duty-free addicted staff allegedly for the benefit of the Wretched of the Earth (including the Middle Classes of the major Industrial Countries).

Ditto the IBRD (World Bank), although the latter can be somewhat useful for the poorer countries.
Just think outside the box…….
Mohammed Haider Ghuloum

New Global Financial Phenomenon: from Poor Candidates to Rich Leaders…….

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All the recent talk of the Panama Papers and hidden wealth. It is, as I once observed, the tip of a huge global iceberg.

In the old days, three or four or five decades ago, when an Arab or Muslim leader (not a monarch) died or left power, he left behind only his personal belongings and (maybe) his pension. That was the case with Gamal Abdel Nasser in Egypt, Qassim of Iraq, Ben Bella of Algeria, and various other leaders. The same was true of American leaders: Truman and Eisenhower did not leave office as very wealthy men. In fact nor did Nixon. But that was then. Things are different now, especially in the past two decades.

Now there is one thing that most Middle Eastern leaders, especially Arab leaders, have in common with modern era American presidents  and with many European leaders of the past two decades. They all have the same thing in common with other Muslim leaders and with African leaders and with Latin American leaders and Chinese and Russian leaders.
Know what it is? They all leave office as very rich people, much richer than before they took office.

Americans call it “looking for number one“, and they don’t mean “the people“.  That is one risk they take when they seek office. It is a by-product of the globalization of many things, especially greed and corruption.
Mohammed Haider Ghuloum

Season of the Caliphate: ISIS Goes Global, IPO Expected Next Year……

Shuwaikh-school1 RattleSnakeRidge Sharqeya-Baneen-15


“Teaming up with Boko Haram was just the start. ISIS is extending its reach around the planet. Here’s how they’re doing it. Boko Haram isn’t about to become a mere extension of ISIS, despite a purported pledge allegiance to the self-proclaimed Islamic State this weekend. Instead, ISIS is likely to offer resources, training, and its brand so the Nigerian terror group can create a distinct province within an Islamic caliphate, experts and U.S. officials told The Daily Beast. It’s a model that ISIS is increasingly adopting as it attempts to spread its reach around the planet………….”

It is the ISIS or DAESH bandwagon these days. Every statement by support or allegiance from any outhouse (American not English outhouse) in any corner of the planet is headlined and echoed. We’ve been told the momentum is with the cutthroats, that the Middle East is quaking. From princes and potentates in their palaces to the political prisoners they throw in dungeons.
ISIS is more of a celebrity now than Hillary Clinton and Oprah and Bibi Netanyahu (in Washington and Las Vegas) combined.

Wait, there is more now. Apparently they are learning about the joy of globalization. From Iraq and Syria to Libya, Sinai, African Sahel, and Pakistan. Oh, and cities of Europe. The Hollywood-esque Caliphate of ISIS is going global. It is only a matter of time before they go public, schedule an initial public offering, an IPO, be listed on either NYSE or NASDAQ. The Caliph Ibrahim Al Samarrai could make a killing (no pun, honestly) from his share of the stock. If it can last this year or next, which now seems doubtful. They are finding out that globalism can also be not-so-joyful. They will learn more about that once financial sanctions are imposed on them……….

Mohammed Haider Ghuloum                          Follow ArabiaDeserta on Twitter

New Age Heroes: Financial Opportunists, Lobbyists, and Rogue Crusaders………

Shuwaikh-school1 RattleSnakeRidge Sharqeya-Baneen-15


“Haym Salomon funded not only the Revolutionary War but several leading politicians, yet passed on claiming huge debts. On January 6, 1785, Haym Salomon, the Polish-born immigrant to colonial New York who is revered in American history as the financier of the Revolutionary War, died. He was all of 44 years old — and he was bankrupt………….”

They have a picture of a 10 cent U.S. stamp from 1975 calling Haym (Haim) Salomon a “financial hero”. It says somewhere that he ran a “brokerage business” as well, but apparently he had nothing to do with Salomon Brothers firm that came later. Mr. Salomon died bankrupt, but only because he lived in a different era.

Speaking of financial heroes, I fully expect the new U.S. Congress (both houses) to start creating new “financial” heroes. I expect some top lobbyists to be named, as well as CEOs of Citigroup and JP Morgan Chase and Mr. Blankfein of Goldman Sachs. For their role in the crash of 2008 that required government funds to bail all these geniuses out. The Koch Brothers and Sheldon Adelson of Las Vegas gambling, financial godfather of the New New Republican Party, will surely be on the list. Not to ignore some other likely candidates: famous anti-tax, anti-affordable universal healthcare, anti-affordable higher education, and anti-welfare ‘crusaders’.

The New New Democrats, led by you-know-who-she-is, should they win the White House in 2016, will likely not only follow the same path, but revert to their old habit of appointing top bankers as top financial officers of the U.S. government.
As for myself, I would suggest an economist like Paul Krugman or even Robert Reich for treasury secretary. But that would limit the New New Democrat president to one term. Unless she or he is impeached and convicted first by an uncharacteristically outraged Congress.

Mohammed Haider Ghuloum                          Follow ArabiaDeserta on Twitter

Corporation Democrats and Globalization from Obama to Clinton: TP the TPP?……..

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“President Barack Obama is ready to buck his liberal base in order to advance the Trans-Pacific Partnership (TPP), the pro-corporate international trade deal currently being negotiated in secret by the United States and 11 other Pacific Rim countries……..”

It is the corporations, stupid.
There was a time when it was true that what was good for corporate America was good for mainstreet America. Not so much anymore. Now what is good for corporate America is mainly good for the large shareholders and for the club of CEOs of America in this age of bonus-hunting by management. The real shareholders matter, not the average Jane with an IRA, as they try to tell us on the financial networks.

If you want to know what American corporations probably prefer the ideal state of American labor to be, look at China, India, and some Latin American countries. Well, a mild exaggeration to make the point perhaps, but not by much. A huge lower lower middle class enshrined in a permanent American class society the like of which has not been seen in more than a century.

Mr. Obama is in many ways like ALL other American presidents since Ronald Reagan. He is a corporation president, even though the U.S. Chamber of Commerce strongly campaigned for his Republican rivals (that was just a matter of comparative preference). His party aspires that he will be followed into the White House by the two most corporatist Democrats available in decades: Hillary and Bill Clinton.
Given the country’s well-financed shift to the right, those two might be the only Democrats who have a chance to keep the White House for their party two years from now.

Mohammed Haider Ghuloum

From Beijing and the Gulf to Manhattan and Paris and Rocky Mountains: Look Who is Coming………

_9OJik4N_normal Sharqeya-Baneen-15    DennyCreek2

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Agence France-Presse and other agencies reported this morning that Hilton Hotels is selling sells the Waldorf Astoria to a Chinese firm for $1.95 bn. It took a (proverbial? cliche?) few seconds to register, but the Waldorf? I mean you can’t get any more historical American than John Jacob Astor and the mountain men and the Fur Trade. Who would have thunk only a few years ago that the venerable (that is what they call them now) Manhattan institution will be sold to a bunch of Chinese oligarchs and People’s Liberation Army functionaries.

Then only a couple of years ago reports came out of some Saudi prince buying the Le Crillon in Paris. I had stayed there once for three days, and of course I did not pay for it: it was a paid official business trip, otherwise I could not have afforded it. Then the Qataris have been buying other Paris properties even before they were admitted into the Francophone countries (about two or three Qataris probably speak French but money makes up for any deficiency).

Not to be outdone, the Emirati (UAE) potentates have been buying British sports clubs and any horses and mules and stables that are for sale across England. Come to think of it, Abu Dhabi has been buying almost anything else that is English and for sale (be it nailed or not). Even the upstart robber shaikhs of Bahrain have been known to use their ill-gotten loot to dabble in British properties.

All this is against the trend in the past couple of decades. Even the Mafia’s hold on Las Vegas gambling has faded in recent years, or so the reports say. At least since Francis Ford Coppola wisely gave up on a fourth sequel of the Corleone saga (the third one stank to Sicily and back).

Speaking of oligarchies and potentates and globalization. How come the Russians and their fabled petroleum and gas oligarchs have not been snapping up Western hotels and sports clubs and horses and department stores? Could it be that they knew ‘the sanctions’ were coming?

Mohammed Haider Ghuloum

Deutschland Uber Alles in Education? Wirklich, You Betcha………

_9OJik4N_normal Sharqeya-Baneen-15    DennyCreek2

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     “You know, greed is good………” Ivan Boesky, Gordon Gecko, Rick          Santelli, et al

“American students that want to attend college, but are unable to find the finances to do so, may want to look at schools in Germany as tuition fees have been eliminated country-wide after Lower Saxony became the last state to get on board. Germany universities were free in the past, but a 2006 ruling by the country’s Constitutional Court ruled that limited fees did not conflict with the Germany’s commitment to universal eduction. It didn’t take long for various states in Germany to see how unpopular the new fees were, and slowly each state dropped them, leaving Lower Saxony as the final holdout. Gabrielle Heinen-Kjajic, the minister for science and culture in Lower Saxony, said in a statement that the decision was made “because we do not want higher education which depends on the wealth of the parents.”………..”

Germany is becoming more and more like America was in the period from the 1950s through the 1970s, before the American counter-revolution that started in the 1980s against open higher education. Germany now seems to be leading the way in higher education. The target in Germany is equality and building up a well-educated society, true social mobility through an educated labor force. Educated voters are not seen as a potential enemy by any major party, not openly anyway.

That free universal education used to be the target in America as well, before the banking industry took over higher education over the past three decades. But first, in order to do that, the banking industry had to take over the U.S. Congress, both houses and both parties, which they have done admirably. And they had to get university administrators to cooperate, which they have done. Now the tuition goal is ‘whatever the market bears’, unless one is an athlete.

Change you can believe in? Yes sir, that is the small change you get after paying the tuition and the student loan payments.

Mohammed Haider Ghuloum

A Western Addiction to Sanctions? SWIFT-ing the Houthis of Yemen………

_9OJik4N_normal Sharqeya-Baneen-15    DennyCreek2

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“Every object in a state of uniform motion tends to remain in that state of motion unless an external force is applied to it…….” Newton’s First Law of Motion (one version)

“Iranian Foreign Minister Mohammad Javad Zarif on Wednesday accused the United States of being “obsessed” with sanctions against his country, on the eve of new bilateral talks on a nuclear deal……….”

Apparently imposing these financial sanctions (actually blockades) can become addictive. Anyone who does not know any better, and that probably includes me, might think that the Obama administration has become addicted to inflicting sanctions on other nations and entities and corporations and whatever and whoever catches its fancy in the wrong way. The U.S. Congress is an even more avid imposer of these sanctions, it leads the way: its hawkish threats scare and force the administration to be “proactive” in these matters.

Governments and despots (only a few of them) and peoples and groups and parties and unions and gangs and possibly bad musicians, probably even alumni associations are targeted. From East Asia through Russia and Iran and Lebanon and Syria and Africa and into the threatening little superpower of Cuba, after passing through the mighty empire of Venezuela. Even as the Iran+P5+1 talks were resuming this summer, some evil genius somewhere in Washington was churning out new plans for tightening the screws on the Iranians. Just to keep the mullahs on their toes, or maybe just to let the hotheads in Congress and Knesset know that they have nothing to worry about.

Yesterday, reports came out that the US (and possibly other Western powers) are considering imposing sanctions against the Houthis of Yemen. The Houthis? They are one of the many tribal/political/ethnic/religious factions that dot the Yemeni landscape. But they have nothing to do with Al Qaeda or any other Wahhabi terrorist groups: in fact they are their enemies. They have no goals beyond their own region of Yemen, so what would they be sanctioned for? Sanctioned for daring to protest against their fundamentalist military government and marching on the capital Sana’a. I would have thought the Western powers had their hands full trying to drone the Saudi-Yemeni Al-Qaeda (AQAP) out of existence (often taking a passel of innocent Yemeni civilians along as collateral damage). Or maybe someone in Washington got a persuasive call from someone with a golden telephone in Riyadh or Abu Dhabi.

Anyway, it is not clear how financial sanctions can affect the Houthis of the rugged territory of northern Yemen. As I recall from my past days of extensive travel, the economies of some remote regions are not very monetized, unlike Washington DC (not so many lobbyists with a lot of money hanging around Sanaa or Ouagadougou). These fellows are not known to fly to Las Vegas or Nice or even Dubai, or to own foreign property. Unlike the petroleum princes and potentates, they do not even frequent the diversion-filled joints of Beirut or Cairo or Bangkok. Unlike the Saudi princes, they never fly into the sin-filled cities of Morocco. So, they don’t have as much need for access to foreign exchange, be it dollars or euros or riyals.

Personally, sometimes I think they impose some of the sanctions jut because they can. The mechanisms and the people are in place, so there is some bureaucratic inertia involved, unless acted upon by an external force, as Isaac Newton taught us so long ago. There are no other world currencies that compete with the dollar, and no institution that can compete with SWIFT. SWIFTing a country or an organization is easy. But the Houthis?

Mohammed Haider Ghuloum

Economics of Terrorism in Iraq and Syria: Follow the Money if You Can………


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“The extremist group that is threatening the existence of the Iraqi state was built and grown for years with the help of elite donors from American supposed allies in the Persian Gulf region……….. But in the years they were getting started, a key component of ISIS’s support came from wealthy individuals in the Arab Gulf States of Kuwait, Qatar and Saudi Arabia. Sometimes the support came with the tacit nod of approval from those regimes; often, it took advantage of poor money laundering protections in those states, according to officials, experts, and leaders of the Syrian opposition, which is fighting ISIS as well as the regime. “Everybody knows the money is going through Kuwait and that it’s coming from the Arab Gulf,” said Andrew Tabler, senior fellow at the Washington Institute for Near East Studies. “Kuwait’s banking system and its money changers have long been a huge problem because they are a major conduit for money to extremist groups in Syria and now Iraq.”…………..”

The money
, it all comes down to the money. Any army or militia needs a source of money: zealotry alone is useless. God will surely not help an army or militia that is flat broke. Thousands of Wahhabi terrorists in Iraq and Syria would not function long without money, a lot of money. It is not money from captured oil fields in Iraq and Syria. It is not from taxes in impoverished western Iraqi regions. It is not locally printed money. It is not from ransoms paid for hostages: most of the hostages are poor pilgrims or soldiers who can’t afford a ransom. It is hard currency, mainly U.S. dollars. I have posted on this in the past, more than once. Yet nobody seems able to discover the exact source and route of the money. Correction: we can guess the sources of the money, but nobody wants to come out and say it publicly and do something effective about it. And who has that kind of money, to spend many millions without having to get anyone’s approval?


In the case of Kuwait the writer exaggerates: it has been the pro-Wahhabi elements of the private sector that aid and abet the Jihadis, rather than the government. In the case of Qatar and Saudi Arabia (and possibly the UAE) the situation is different: the princes and potentates started throwing money and weapons at the Jihadis in Syria early on. Some of the same princes and potentates are still at it, financing the terrorists even as official policy seems to be against it. Instability in Iraq has always been part of the strategy of the princes and oil potentates.………… 

is what I posted one year ago about The Economics of Jihad in Syria

“Local Kuwait media report that the tribal Islamist opposition has called for a mobilization for war in Syria (they called it for Jihad in Syria). A bunch of former opposition tribal Islamist MP’s held a sort of tribal charity ball but stag, a large gathering of men to start a campaign to raise money to equip and arm 12 thousand ghazis (ghazi is Arabic for invader, raider, meaning here Jihadi) for Syria. They have called for every family (that listens to them) to equip and arm one Mujahid to go to Syria to fight. One of them suggested that 700 Dinars (about US $2400) would prepare and send a Jihadis to battle in Syria. (No idea if this amount covers one or multiple multiple wives). That of course does not cover the current cost of operations: food, bullets, shelter, bribes, booze, weed, women, etc. All that minus current revenues: whatever can be looted as war booty or obtained as ransom for hostages the FSA and Jihadist militias like to take (they are avid hostage-takers and are still holding two Christian bishops and two other priests hostage, in addition to many Alawis and Shi’as). Some of the well-heeled tribal Islamists at the gathering contributed new non-Islamist cars. One gave a new heathen-made Chevrolet Suburban, another donated a new infidel-made Mercedes-Benz. One former member of parliament got a family to pay for the arming and equipping 28 ghazis (raiders or Jihadis) for Syria. Another former member deposited funds to cover three Jihadis………………”
If $2,400 will send one terrorist fighter to Syria or Iraq. One thousand jihadis would cost $ 2.4 million (as a starting fixed cost, not counting current expenses). Add all other expenses over time, and you do the rest of the math. Take into consideration that the $2,400 might just be a ‘teaser’, a hook, to get things started.