Readings: ME / GCC rolls over, Ethanol woes, US manufacturing
Gulf economies are more susceptible to financial turmoil than in the past because of their greater dependency on international expertise, investment and tourists to diversify away from oil. While Dubai, home to the world’s tallest building and the man-made Palm Island, is considered most at risk, no part of the Persian Gulf will go untouched.
Kuwait on Wednesday became the third Gulf state to prop up its banking system. It did so after losses on currency derivatives at Gulf Bank KSC, the country’s second-largest lender by assets, sparked a surge in customer withdrawals from the bank.
The United Arab Emirates said Oct. 12 it would guarantee deposits of all local lenders and large foreign banks. It also set up a $19 billion facility to help banks make loans. Saudi Arabia, the world’s largest oil exporter, put $2.7 billion into a government-run bank in Riyadh to provide no-fee loans to low- income citizens.
Dubai - The one bust no one’s talking about yet.
Bloomberg: Goldman Drops Coverage of Ethanol Makers After VeraSun Fails
Goldman Sachs Group Inc.’s analysts abandoned coverage of the ethanol industry today after VeraSun Energy Inc., the largest publicly traded U.S. ethanol maker, filed for Chapter 11 bankruptcy protection.
Pacific Ethanol Inc.’s half-decade money-losing streak will continue for at least another five years, Murti and Mody said in the note. Pacific’s shares fell 87 percent this year.
Was this the shortest bubble amongst the many created during the 2003-2007 period?
In what some economists called a sure sign of recession, the Institute for Supply Management said Monday its manufacturing index fell to 38.9, the lowest reading since September 1982.
Monday’s reading was dramatically below this past September’s reading of 43.5 and far lower than economists’ expectations of a reading of 41.5.
Why is this a surprise? Have you seen the Baltic index lately? Or copper prices? Steel? Chinese manufacturing statistics?
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