General Financial News
Oil, metals surge as Mubarak dissolves Egypt government
Jan 28, 2011 04:30 PM
Unprecedented and wide-ranging national protests in Egypt grabbed the attention of the global media this week, as the people of the Arab world's largest country poured onto the streets to protest against the economic injustices and the political repression they've lived under during the regime of president Hosni Mubarak.
Mubarak took power after the assassination of Anwar el-Sadat in 1981, and he's ruled the country since, steadily consolidating his power.
After a surprise wave of protests unseated the Tunisian government of Zine al-Abidine Ben Ali, sympathetic movements of varying scales began breaking out across the Arab world. The Tunisian government was unusually corrupt and repressive, but its basic model of centralized autocracy with a thin veneer of democracy can be found around the region.
The protests began in earnest in Cairo and other cities on January 25, a "day of rage" which saw thousands march on the heart of the city, Midan Tahrir, in a nearly unprecedented display of Egyptian civil unrest. Midan Tahrir is a massive square bounded by the Mogamma - the main state administration building - the Nile Hilton, the American University in Cairo campus and the Egyptian Museum.
As protesters filled the square, chanting anti-government and pro-reform slogans, the mood was initially charged but relatively peaceful, news sources reported. It grew nasty after police cleared the square - and other gatherings around Cairo and other cities - with tear gas, batons and water cannons.
The unrest continued on Wednesday and on Thursday, when Nobel Prize winner Mohammed el-Baradei, a former director of the International Atomic Energy Agency, returned to the city from Vienna amidst a crackdown on social media such as Twitter, Facebook and instant messaging. El-Baradei is widely regarded as one of the best possible candidates for the leadership of the opposition movement, which was previously mostly spontaneous and decentralized, organizing through the aforementioned networks.
Thursday also brought the wholesale shutdown of Egypt's internet connections, a move completely unprecedented in modern history.
Today, a massive protest spread across the nation, with running battles in the streets in Suez and other locations. A massive deployment of police failed to contain the protesters in Cairo, who spilled across the Nile and through the streets, arriving once again in Midan Tahrir.
The National Democratic Party headquarters burned along with other major buildings, and military tanks arrived in the streets.
The climactic moment came as President Mubarak appeared on national television to address the crisis, the first appearance he's made since the unrest began. He acknowledged the protesters grievances, asserted the importance of maintaining peace and, crucially, said that he was dissolving the Egyptian government.
However, he gave no sign that he would leave power, leading some to accuse him of a merely cosmetic change that preserves the heart of power. Protesters chanted "down with Mubarak" in response.
The government earlier imposed a curfew, which appears to have been mostly ignored. The last reports had about two dozen Egyptian Army tanks rolling into Midan Tahrir and protesters fleeing down side streets.
Overall, the chaos shocked government, media and investors around the world, who were barely prepared for the impact of such wide-ranging demonstrations with such sustained lasting power.
Investors reacted by fleeing conventional assets and pouring into those likely to be affected by political unrest.
Stock index futures plummeted; at 4:15 p.m. EST, Dow Jones Industrial Average index futures were down 169 points to 11,775, while Nasdaq 100 futures lost 55 points to 2,268. S&P 500 index futures slid 24.3 points to 1,271.50.
DJ Euro Stoxx 50 index futures lost 35 points to 2,958, while German DAX futures slide 48 points to 7,115.
Crude oil futures surged, as Brent crude oil futures climbed 1.953 percent to trade at $99.33 per barrel. West Texas Intermediate light, sweet crude oil climbed 4.387 percent to $89.57 per barrel.
Metals futures gained as well, in a day of volatile trading. At 6:22 p.m. EST, gold futures for April delivery were up $19.30 to $1,339.10 per troy ounce, while silver futures for March delivery gained 92.9 cents to $27.96 per troy ounce.
It's not clear what will happen in the streets of Cairo, who has control of the city and whether Mubarak can maintain power. However, the coming weeks will likely be volatile and unrelenting at this pace of events.
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