The removal of President Hosni Mubarak of Egypt and the unknown factions that will be taking over the government precludes comments on individual markets this week. Friday’s market action before and after the announced resignation of President Mubarak indicates further confusion will result and therefore I reluctantly refrain from my usual analysis and comments.
What happens now? The jubilation surrounding the ouster of Egyptian President Hosni Mubarak may be shortlived if there is no organized installation of another U.S.-friendly leadership in Egypt. People have short-term memory when it comes to a government turnover. I recall the jubilation when the Shah of Iran was ousted and that Muslim extremist Ayatollah Khomeini was returned from exile in Paris to rule in Iran.
Could history repeat itself? It was widely believed that poet and philosopher George Santayana had originated the phrase "those who do not remember history are doomed to repeat it" in 1905 but later attributed to Edmund Burke and used in a speech by President Reagan. It remains to be seen whether the new administration in Egypt will be one that is friendly to the West or revert to religious domination as has been the case in the past. We remain cautious until a clear government is established once the smoke clears in Egypt. Our fear is that a population that has undergone severe hardship will be too quick to embrace leadership that promises salvation. Does no one remember 1930s Germany?