1-29-11 Recap of the day's events/postings

Facts:

1.     Finance Committee: File federal budget on Sunday

2.     Parliament is hosting next Tuesday, the heads of agencies to discuss the decision of the Federal Court

3.     Deficit spending caused the failure to approve the federal budget

4.     Central bank calls on the government to take advantage of deposits banks instead of borrowing from

5.     Allawi confirms that the course of events would not affect the Arab summit

6.     Article IX of the constitution granted the Kurds the right to manage one of the security institutions

7.     Iraq’s parliament will reconvene Monday to discuss the Federal Court decision and the draft budget

8.     Not implemented the terms of the initiative Barzani

9.     A forthcoming meeting between Allawi and Maliki to discuss the outstanding issues

10.  Congress hoped in agreement Allawi and Maliki on the security ministries

11.  Bancor, the name of the global currency that a shocking IMF report is proposing

12.  Iraqi trade: WTO satisfied with Iraqi trade legislation

13.  State Law: near vote on council security policies by ministries           

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.     Night chats

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

1.     RV rumor from PD

Where Are We At?

1.     Starting with the government formation news, there is still confusion as to when Parliament will meet to discuss the Federal Court decision and the budget.  Monday and Tuesday are the days that are being bounced around.   We also read news that Maliki and Allawi would meet either today or tomorrow to resolve outstanding issues.  The good news is that Allawi is back in town.  The not so good news is that the same article that said he’s back in town said Allawi was not aware of a scheduled meeting with Maliki.  Just as worrisome was the news that not much has been done to implement Barzani’s initiatives (form the government).  Recall that Barzani’s goal was to work with Iraq to complete the formation of the government.  On a brighter note, it does appear that Parliament met today to discuss how to vote on the National Council of strategic policies.  However, it appears that the State of Law doesn’t want the vote on the National Council of strategic policies to go to the House.

2.     On the budget front, there was news that the budget will go to the Standing Committee tomorrow.  It still remains to be seen as to when the budget will go to the House.

3.     On the rumor front, Night spent quite a bit of time today relaying information from his source to everyone on chat.  His source(s) are linking the regional issues to Iraq, which basically should be putting tremendous pressure on Iraq to quickly form their government or face similar situations to what is happening in Tunisia or Egypt.  They are also not happy with what Maliki has done in terms of manipulating the Federal Court to move the independent bodies under his control.  His sources say that Maliki will either be removed, or his powers will be severely limited.  They are tired of both Maliki and Allawi and want action instead of words. 

4.     Someone posted a report to the IMF that outlined a new global or common currency, Bancor.  It was said that this currency would replace all currencies and the author’s (on DD) posting mentioned this is a serious proposal.

5.     Ending this section on a positive note, Iraq made good progress with the WTO.  The WTO reported that they are satisfied with Iraq’s trade legislation! 

What’s left?

1.    Reading of the budget for the first time (due to redraft).

2.    Closure on Security positions (5 in total) and the remaining unfilled positions (4)

3.    Formal announcement of government

4.    Agreement on outstanding Kuwait issues

5.    Lifting of remaining Chapter 7 sanctions (Kuwait related)

6.    RV/RI

7.    HCL

What’s It All Mean?

1.     With regards to the government formation, Iraq has developed a bad pattern of delaying the completion of the final 9 ministries, and in completing the government.  Meanwhile, there’s tremendous unrest in the people within that region.  Night has said and continues to say that the unrest will become greater in Iraq.  If Iraq doesn’t complete their government and begin doing things that benefit their people, it is not difficult to imagine that the people of Iraq will increase their violence and demonstrations, and possibly escalate on par with Egypt. At this point, we can only wait and see what Parliament, Maliki, and Allawi do with the remaining items needed to complete the government.  I hope they break their pattern and form.  A mass uprising of the people In Iraq comparable to Egypt does not suggest to me that an RV would be right around the corner.  I do get a feeling from the articles that there is a sense of urgency from government personnel to get the government completed.

2.     The news of WTO’s satisfaction with Iraq’s trade legislation is good news.  This brings Iraq one step closer to being able to become a full member of the WTO, which is definitely something that we would want to see because it means there wouldn’t be anything in their way in terms of global trade.  Of course, there is one thing that Iraq must do, which the WTO said is a requirement.  They must close the gap between their currency and the dollar.  Or to put it in more common terms, they must RV.

3.     The Bancor news immediately brought to mind global settlements.  There was more rumor from the GET team about global settlements today, but I  didn’t read through the whole chat.  In either case, the Bancor currency information is interesting and a little unsettling.  I’m not sure what it would mean to the value of our investment post-RV.