He Who Devalues First Something Something

Twice in the past 6 years there has been a Thanksgiving surprise out of the Middle East. Dubai World defaulted in 2009 and oil prices cratered in 2014. BofA is looking into 2016 for a potential Saudi depeg. If the Saudis are at all considering such a move, the earlier the better.

ZeroHedge: Saudi De-Peg Looms As FX Market Signals Loudest "Black Swan Warning" In 13 Years
And there you have it. It's either stop it with the whole flooding an oversupplied market strategy, or let the peg fall before SAMA runs dry. Bear in mind that it's not just falling crude, the peg, and generous subsidies that are weighing on the Saudis. There's also the war in Yemen and the prospect of a stepped up role in Syria.

No comments:

Post a Comment