Kuwait Financial Crisis?

It's hard to believe driving down the street and seeingdecision to stop trading in shares of Gulf Bank sent a
a gas station sign that reads- Unleaded $2.15! Youshock wave through the country's bourse, which
read that right. Weren't we paying $4.75 not too longclosed down almost 3.5 percent and brought its
ago? How is this possible? It's possible because theyear-to-date losses to over 19 percent.
barrel of oil that once cost $147, now is being sold forTrading in Gulf Bank shares would be suspended
$62. and then there's this thing called a RECESSIONpending an investigation into the derivatives deals that
and CREDIT FREEZE which is happening in the oil-richcaused the losses. The bourse's statement said some
Arab nations such as Kuwait. investors had balked at covering their losses, but
Kuwait's Central Bank stepped in Sunday to prop upneither the central bank nor Gulf Bank indicated the
one of the country's biggest banks and said it wasscope or timeframe of the bank's losses. BALK isn't
considering guaranteeing deposits in domestic banksthe word, CAN'T cover their losses is the reality.
— in one of the first concrete signs that the globalOver the past few weeks, Kuwaiti investors have
financial crisis may next hit the oil-rich Gulf. While invoiced clear concerns about the market. One
Saudi Arabia, meanwhile, the government said it wouldstockbroker unsuccessfully sued to temporarily close
deposit $2.7 billion into the Saudi Credit Bank to helpthe bourse while other traders last week stormed out
lower-income citizens deal with financial difficulties.of the exchange, demanding the government intervene
Amazing!to halt their near-daily losses. Investor al-Fadhli said
This is not only bad news for the Arab nations, but forabout 40 brokers walked Sunday from the exchange
Hugo the red-capped dictator in Venezuela. He wasto the nearby seaside Seif Palace, demanding to see
not able to make the positive changes for the peoplethe prime minister, Sheik Nasser Al Mohammed Al
at $147 a barrel, so what's going to happen at $62?Sabah, to ask for more government intervention.
The answer is nothing good. But, back to the Mideast.The bottom line to take away from this story is?
Finance ministers from the six-nation Gulf CooperationWe're looking at a world-wide melt down and it's not
Council held an emergency meeting to echogoing to turn around over night, nor is a $700 billion
assurances, which they have repeatedly voiced overbailout the answer. we're going to need MANY
the past few weeks, that the region's banks face noanswers.
liquidity crisis. With oil at $147 yes, but at $62? Kuwait's