1-23-11 Recap of the day's event/posting

Facts:

1.     House of Representatives host the heads of bodies to discuss the final accounts

2.     Iraqi finance minister vowed to insert Kurdish demands in budge

3.     Maliki, Allawi, Jaafari meet periodically to resolve security ministries and Policy Council

4.     Central warns of compromising its independence and calls on the Federal Court to clarify its decision

5.     CBI auction results

6.     Iraq says it will withdraw from the government if they do not constitute Council Policy

7.     United Nations was considering the Federal Court decision on the independent bodies

8.     Custom tariff law will not affect the standard of living of the Iraqi people

9.     Maliki wants to resolve the remaining ministries at once

10. Adoption of the 2011 budget law next 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.   Nighthk11 chat

2.   Med chat

3.   ME countries to RV soon

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

1.    RV not imminent

Where Are We At?

1.    The government formation news is pretty much the same as what it was yesterday.  The security positions are still being discussed so that they can be filled.  There is a sense of urgency to get the government completed.  We still see Allawi threaten to not participate in government if things don’t go the way he expects.  We also see Maliki trying to consolidate power by leveraging the Federal Courts decision to move independent bodies away from Parliament and under him.  The Courts decision is concerning to the CBI as they are independent and do not feel that its in the best interest of Iraq to support the Federal Court’s decision.

2.    In terms of the budget, there is movement here as well.  The issues regarding the Kurds and the budget is being discussed and there is an expectation that the budget will be adopted into law next week.  But, they must review last years financial statements prior to the budget being completed.

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.    No change from yesterday.   

1-23-11 Nighthk11 chat

Highlights/Thoughts
Click on the title of this posting to see the details of this chat on J4D

1. Violence will continue to escalate until they get the government formed
2. Issue of the CBI and the SFC are another indication of why Allawi wants them gone
3. Purchase of the Federal Court's decision was to put Maliki in control of all of Iraq's funds
4. As Med stated, the Iraqi Constitution is very clear on the matter of the CBI -- NO
5. Night is expecting movement on completing the government this week
6. Night's confidence is high given the information given to him
7. There is no more patience and tolerance is at zero for their mistakes
8. Upon stabilization of their government, there will be a cabinet shuffle beginning at the top
9. Only thing holding up the RV is the government

1-23-11 Skype chat - Med

Highlights/Thoughts

1. Friend of Med, who only calls every 6 months, said the embassy in DC is hitting harm to take his company into Iraq
2. Friend is telling embassy he won't unless they can make some type of profit that can be exported out
3. Embassy told him it all hinges on the government
4. As of yesterday, the embassy was told to tell investors that the Dinar is only waiting until the government is formed
5. CBI will move almost immediately when the government is completed
6. They never once mentioned the budget

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MED Chat - MY BUDDY CALLED ME LAST NIGHT TWICE
I DON’T USUALLY HERE FROM LIKE ONCE EVERY 6 MONTHS
HE SAID THAT THE EMBASSY IN DC
IS REALLY HITTING HIM HARD
TO TAKE HIS COMPANY INTO IRAQ
HE IS TELLING THEM THAT HE WON’T UNLESS THEY CAN MAKE SOME TYPE OF PROFIT
THAT CAN BE EXPORTED OUT
THEY TOLD HIM THAT IT ALL HINGES ON THE COMPLETION OF THE GOVT
AND THEY ARE TELLING HIM AS OF YESTERDAY
THAT THEY ARE BEING TOLD TO TELL INVESTORS
INTERESTED IN IRAQ
THAT THE DINAR IS ONLY WAITING TILL THEN
AND IT WILL BE MOVED BY CBI ALMOST IMMEDIATELY
WHEN IT IS COMPLETED
THEY NEVER ONCE MENTIONED THE BUDGET

1-23-11 Skype chat rumor - ME countries to RV soon

Highlights/Thoughts

1. Al Jazeera news TV today announced that all currencies in the middle east would revalue soon
2. This was heard from the person's Egyptian mother-in-law
3. Entire gulf nations would be raised to be close together in value

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[******] They announced on Aljazeera news TV that all currencies in the middle east would be revaluing soon. So this was a great piece of news. heard that today from my Egyptian mother in law. I will get more details later on what she heard. We were cut off in the middle of the conversation but she was very positive this would be happening at any moment. But they said the entire gulf nations would be raised to be close together in value.

1-23-11 Iraqi lawmaker: Adoption of the 2011 budget law next week

Highlights/Thoughts
Click on the title of this posting to get the details of this article

1. A lawmaker in the Parliament said that the budget will be approved early next week after the issues have been resolved
2. Hattab said that "The House of Representatives will continue to closely balance the exchange rate mechanism in 2011, and especially how to deal with the fiscal deficit," which reached more than $ 12 billion."

1-23-11 Posting from Steve of PD

Highlights/Thoughts
Steve's posting regarding the Dinar is a good read. It's too long to summarize. If you're looking to gain a solid understanding of the Dinar and why it should RV, this is a good read.

1-23-11 A source at the National Alliance: Maliki wants to resolving the remaining ministries at once

Highlights/Thoughts
Click on the title of this posting to get the details of this article

1. Maliki wants to resolve the remaining ministry positions at once (including the security ministry positions).
2. He does not want to go to the Parliament twice
3. Osman suggested that the political blocs were not in a hurry to resolve the remaining ministry positions because the constitutional period for forming the government has passed and Parliament voted on the government
4. Many of the members of Parliament do not believe that the security positions will affect secruity

1-23-11 Dinar (IQD) on Forex Info Emailed to DD 1/22/11

Highlights/Thoughts
Click on the title of this posting to get to the details of this post on DD

1. Author of email suggests that the IQD is live and tradable on Forex
2. To him it means 2 things: 1) The Forex people know something we don't; 2) The IQD could be placed on Forex and allow the market to drive up the rate thereby removing the zeros
3. Option 2 is not likely scenario because without a declared value, the value of the IQD could go up or down in significant values on a daily basis. The latter would not be good for Iraq
4. It's better for Iraq to set a rate and allow the exchange rate mechanism to float the dinar in the market at the normal ceiling/floor thresholds (up or down 4% in a 24 hour period)
5. Rate will likely go up exponentially either way based on speculation
6. For any of this go happen precludes the CBI has stopped auctioning the Dinar (Note: There was an auction today)
7. Author feels the Forex houses are anticipating the Dinar will be traded internationally and are currency swapping on the small pips (pip is a term used in the Forex world and means a percentage in point, which refers to the smallest movement that a price could make in the Forex market)
8. The supposed trades in Forex could also mean that the CBI is using this method to further remove the large denominations in a staged manner. CBI cannot do this for days, weeks, or months.
9. Budget is a moot point
10. Parliament stripped Maliki of certain powers relating to naming people to the security ministry
11. Parliament is calling emergency sessions relating to the issues of the security ministries
12. Author believes RV will happen by 1/31

1-23-11 Central Bank: Customs tariff law will not affect the standard of living of the Iraqi people

Highlights/Thoughts
Click on the title of this posting to get to the details of this article

1. CBI advisor said that the custom tariff law will not affect the standard of living of the Iraqi people because of the law of proportions
2. The law of proportions emphasizes the deduction of amounts of import customs (10% to 20%) on luxury goods and excludes food items
3. The activation of the Customs Law will contribute to the protection of Iraqi products

1-23-11 Iraq: United Nations was considering the Federal Court decision on the independent bodies

Highlights/Thoughts
Click on the title of this posting to get the details of this article

1. The UN is reviewing the decision of the Iraqi Federal Court to have independent bodies under the Prime Minister instead of the House of Representatives

1-23-11 Iraq says it will withdraw from the government if they do not constitute Council Policy

Highlights/Thoughts
Click on the title of this posting to get the details of this article

1. Member of the List said that any reneging on the agreements related to forming the board or Allawi heading the Supreme Council will result the List withdrawing from the government

1-23-11 CBI Auction results

  Currency Auctions

Announcement No. (1819)

The latest daily currency auction was held in the Central Bank of Iraq on the 23-JAN-2011. The results were as follows:

Details	Notes
Number of banks	16
Auction price selling dinar / US$	1170
Auction price buying dinar / US$	-----
Amount sold at auction price (US$)	113,546,000
Amount purchased at Auction price (US$)	-----
Total offers for buying (US$)	113,546,000
Total offers for selling (US$)	-----

Exchange rates

Dollar's exchange rates / in Baghdad markets

1-23-11 RV not Imminent rumor on J4D

Highlights/Thoughts
Click on the title of this posting to get to the rumor posted on J4D (membership required)

1. Person spoke with the finance person in person regarding the IQD
2. Finance person is in charge of inputting exchange rates into the computer
3. Finance person gets 24 hours advanced notice of any change
4. The advance noticed is used to determine how much currency to order
5. They have nothing that indicates the IQD will RV for the next 60-90 between $3.30 - $3.75
6. This information comes directly from the CBI
7. Finance person said it is possible that when the RV happens, it could happen with less than the normal 24 hour notice
8. Not looking good for this week

1-23-11 Central warns of compromising its independence and calls on the Federal Court to clarify its decision

Highlights/Thoughts
Click on the title of this posting to get the details of this article

1. CBI advisor said that he has concerns of the Federal Court decision to link a number of independent bodies referred to in the Constitution directly under the Prime Minister and not under the House
2. Saleh said the linkage as defined by the Federal Court is vague and not sufficient to affirm the autonomy of the bank
3. Saleh warned that undermining the independence of the CBI will lead to opening the door to foreign court's taking Iraq's funds in the event of a suit against Iraq
4. Saleh said according to Article 103 (paragraph 2), the CBI answers to the Council of Representatives

1-23-11 Maliki, Allawi, Jaafari meets periodically to resolve the security ministries and Policy Council

Highlights/Thoughts
Click on the title of this posting to get to the details of this posting

1. Maliki, Allawi, and Jaafari will meet periodically throughout the week to resolve the security positions and the National Council of the policies
2. The candidate of the Ministry of Electricity proposed to increase the electricity for citizens to 18 hours per day by 1.5 years, but his proposal Maliki an no other party has responded

1-23-11 Iraqi finance minister vowed to insert Kurdish demands in budget bill

Highlights/Thoughts
Click on the title of this posting to get to the details of this article

1. The Kurdistan Finance Minister vowed to incorporate the Kurdish demands in the 2011 budget
2. Kurdistan budget was decreased from 17% to 11.6%
3. Iraqi minister promised that the agreements between Baghdad and Erbil over Kurdistan oil exports and reimbursing foreign oil companies in Kurdistan will be included in the 2011 budget
4. Iraqi minister also promised to consider the Kurdish viewpoint on the modification of the budget prior to submitting it for final voting
5. The Peshmerga forces continues to be an issue that needs to be resolved

1-23-11 Ziad worldwide abolition: House of Representatives will host the heads of bodies to discuss the final accounts

Highlights/Thoughts
Click on the title of this posting to get to the details of this article

1. Prior to the adoption of the 2011 budget, Parliament will host the heads of agencies and institutions to review the 2010 financial statements