1-15-11 Recap of the day's events/postings

Facts:

1.      3 presidencies stripped of power in draft of the Strategic Council

2.      Barzani to visit Baghdad to help complete government

3.      Iraq struggling to fill the last 12 seats of the government

4.      Where are we with the SDRs?

5.      Draft policy on the Supreme Council to be submitted to Parliament

6.      Zebari on lifting the remaining sanctions

7.      Iraq eliminating non-Paris Club debt

8.      Agreement on remaining ministries this week

Rumors:

Of Interest (rumors that I find of particular interest either because of who said it or because of how I think it relates to what is happening right now):

1.      Rumor for Sunday RV

2.      Canada gets permission to trade Dinar

3.      Jordan bank confirm 1

4.      Skype chat rumor 1

5.      Skype chat - Canada

6.      Email from blog visitor - Jordan

7.      Kuwait and Jordan confirmation

8.      Dubai exchange

9.      Dubai and Hong Kong exchange

10.  Rudy’s assessment of early RVs

11.  PNC bank – no RV in ME

12.  Global settlements

The Rest (doesn’t mean these are not happening):

1.      Skype chat rumor 2

2.      Blaino rumor

Where Are We At?

1.      Iraq continues its focus on completing the formation of the government.  Barzani is in Iraq and is there to help complete the government.  The draft policy related to the Supreme Council will be wrapped up and put to vote in Parliament, if there are no issues.

2.      We continue to see a focus on removing Iraq from the remaining sanctions from Chapter 7.

3.      The new IMF exchange rates have yet to be released even thought they were scheduled to be released on the 14^th.

4.      Iraq is once again seeking to cancel debt, but this time they are working with non-Paris Club entities.

5.      Continue to see confirmations of Kuwait and Jordan exchanges, but we are now hearing about exchanges in Dubai and Hong Kong.  We also heard that Canada was given the green light to begin trading the Dinar.

6.      Continue to see people who say that the RV did not happen in the ME.

 

What’s Left?

1. Reading of the budget for the second time.
2. Closure on Security positions (5 in total) and the remaining unfilled positions (7)
3. Formal announcement of government
4. Announcement of agreement on outstanding Kuwait issues
5. Lifting of remaining Chapter 7 sanctions (Kuwait related)
6. RV/RI

What’s It All Mean?

1.      Recall that it was mentioned Iraq wanted to complete the government before the Arab Summit, which is in March.  If I were in their shoes, I would not want lingering government formation problems in the month of February, but that’s just me.  In the least, I would think they would want to complete all security related positions before the summit.

2.      I find it interesting to compare the rumors about the RV happening in the ME to what’s going on with the IMF’s schedule for releasing the exchange rates.  The rates are being delayed, and we hear of the RV happening in the ME.  Is there a connection?   Perhaps.  If the ME banks are pulling in large denominations, and they know that the rate will RV at a higher rate, their reserves will be higher.  Could the total of the dinar pulled in increase the value of their currency?  Maybe?  If so, does it make sense to reflect that increase when the IMF releases the new rates?  We’ll see.

3.      Iraq is seeking to cancel debt.  Are they doing this in a race against the clock with the deadline being the end of the DFI, which is in June?  Will they use the RV as leverage to strike deals and get the debt canceled?  If so, does that mean we won’t see the RV until June or later?  I don’t have the answers to these questions.  It’s food for thought.  But, when I think about Iraq RVing now and trying to convince countries to forgive their debt, I find it difficult to believe the RV helps them in this regard.