Western Souk

The Mid-Eastern souk’s proprietor’s famous come on “have I got a deal for you”, transposed itself last week to New York and Annapolis. Deal making or its attempt was fast and furious, driven by a sense of urgency on both the American and Arab side.

First off at the summit hosted by Rice and Bush, the requisite handshake photo ops with Abbas and Omert were dutifully taken. Clearly, every one of these "here today gone tomorrow" leaders needed to get something out of the occasion. Unquestionably, progress was made in the desire to finally get everyone in a room together. However, it’s too early to assess the real momentum towards facing the pivotal issues that have bedeviled all other peace attempts: final boarders, Jerusalem and refugees.













"Palestinian Refugees: They're not marching for compromise"


Let’s just say its going to be very hard for Abbas because the Arab body politic AKA “the street”, has not been pre-prepared for any compromise on any of these issues. Without a massive education campaign in Arabic starting now and lasting until the day a treaty is signed any treaty with Israel will seem a sellout. Iran, Hamas Hezbollah will never legitimize any peace and they will have popular backing to do so if new thinking is not introduced into the Arab mind now. Just read the Saudi cartoons depicting the meetings (easy to do on line at www.arabnews.com). The horrific medieval image of the Jew representing Israel has dealt the Palestinians a savage hand at the talks. Additionally, Several of the Arab conference participants went home and spoke in Arabic of the talks' failure and repeated their hard lines for total Israeli capitulation, old habits die-hard. It would be nice if once, just once someone in the Arab Mid-East would at least consider using the “painful compromises” speech every Israeli leader has read from before each peace summit.

There was however really good news that came from another stall at the souk, the money exchange stall. Here the Sunni denizens of Abu Dhabi exchanged their petro-dollars for convertible bonds in that now dubious enterprise known as Citibank. All of this arranged by Bob Rubin whose ethnic background is obvious to all. Clearly the Koranic injunction against interest (riba, or increase) on loans was shelved as the 11% coupon carried by the CITI bonds was just too good to pass up in this “murabaha” Arabic for trade instrument Perhaps Rubin gave them a good to go Chanukah “Fatwa.” Coming in a 4.9% stake just under the 5% that would trigger SEC review this bailout is so irony laden it looks like a Christmas tree after a ten foot snowfall.















"Skyline of Abu Dhabi: City fits right in"

The man universally credited for creating the housing asset bubble the man who actually publicly endorsed the risky often fraudulent come on adjustable mortgages was none other than Alan Greenspan supposedly known for monetary, er…let’s try cleverness. When the re-re-repackaging of these mortgages into CDO and SIV’s goes south and CITY is left holding the bag where does he turn for fast easy cash? The Arabs are holding a trillion in drunken sailor dollars because America has leaders who didn’t have the courage to have a sensible energy policy in the first place. For sure this loan will invite new trilateral commission paranoia. For sure Osama must be spinning in his dialysis unit.

The true solace to be taken from all of this is that the Abu Dhabis now have a stake in Manhattan and the health of the U.S. banking system, lessening the chance for another attack with say a dirty bomb. We probably should congratulate Bob Rubin for getting us all in the same economic lifeboat. Let’s just hope it stays afloat.