Saudi Arabia crackdown and persistence of the unforeseen:
"It is not the risks we worry about that harm us. It is what Donald Rumsfeld once called the “unknown unknowns” that we were not thinking about and did not even know about. In markets, assets deemed high risk tend to be priced so that they do little harm when things go wrong. Crises happen when that thought to be safe surprise us.
This week we celebrated the anniversary of a huge political shock — the election of Donald Trump — with possibly an even more shocking development. In Saudi Arabia, the young crown prince asserted his authority imprisoning many members of the Saudi power structure. Even if the prison in question is a five-star hotel, this is a shocking development.
First, as we know, Saudi Arabia is an enormous oil producer. It led Opec throughout the 1970s when oil price spikes forced recessions in the western world. Second, Saudi Arabia has a critical role in the politics of the Middle East. Its nationals accounted for most of the 9/11 hijackers and it is the land of Osama bin Laden’s birth. It has a tense political and religious rivalry with Iran, the other pole within the Middle East, and the latest developments seem to ratchet up the chances of an outright between the two."
'via Blog this'
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