Home » Behavioural Investing » Egypt is So Screwed Riots Don’t Matter Any More. Muslim Brotherhood is having a Moralistic Temper Tantrum. No effect to risk or volatility. $VXX $VIX

Egypt is So Screwed Riots Don’t Matter Any More. Muslim Brotherhood is having a Moralistic Temper Tantrum. No effect to risk or volatility. $VXX $VIX

Egypt is manufacturing lots of violent TV for action influenced investors. The military élite is not about to give up power to the Muslim Brotherhood. That’s just the way power is. The Muslim Brotherhood is having a moralistic temper tantrum. Democratically elected just as Adolf Hitler was, they proceeded to not improve the economy after major promises to do so. The unrest reignited. The military saw their chance to become the eradicateur.

So while we have useless and tragic bloodshed, no one is able to paint a vision for the future. Egypt’s economy with almost 90 million is tragically non-existent. Tourism an important employer and source of foreign exchange has all but dried up. Both sides will keep the Suez Canal open because it’s a source of revenue.  Just like violence rife Iraq keeps oil flowing. No one takes out the pipelines because both sides will need the money.

The military have the guns and enjoy being a popular organization with the Egyptian population. They also have the support of the Saudi’s with near limitless wealth. The Muslim brotherhood if it were to prevail would need the support of other radical regimes which would demand confrontation with Israel.

Both sides may find nearby Libyan Oil to be highly attractive as a military/financial target.

The Muslim brotherhood riots in the street because they do not recognize the economic incompetence of their leadership. If the violence were to stop right now tourism would return very slowly. If the Muslim Brotherhood prevails tourism will be a distant memory. They cannot abide tourists coming from afar attracted by culture and history which pre-dates and out shines Islam.

Egypt has cheap labour close to Europe. If the military prevails and understand how to work globalism they will attract manufacturing and compete with Asia. If they allow modernity to prevail then they can allow an educated population to grow economically by taking risks and offering something of value. Not sure if the current zeitgeist from either side understands how to leverage this.

The west despite their anti violence rhetoric will do what they can to favour the Egyptian Military. Do not be fooled by cancelled military exercises with US Forces. The Egyptians are busy doing things the US military seeks to avoid. best leave they alone.

I’m not sure if the average man in the street understand how far into the toilet they really are. Which is probably why they are fighting in such irrational manners. In the end they will not effect risk premiums or volatility. Another crazy guy shaking his gun at the West will not change anything.

George Gutowski writes from a caveat emptor perspective. Follow him on Twitter @financialskepti