In his daily note, Art Cashin points to one country that’s more important than Libya
Is Bahrain The Key? – Much of the weekend saw the media obsessed with the fate of the Libyan dictator, who in the Reagan years was derisively dubbed “Mallowmar K. Daffy”.
Traders, however, kept their focus on Bahrain. It is the home of the U.S. Navy’s 5th Fleet. If an incoming government in Bahrain was hostile to the U.S., the 5th Fleet could be without a home. That, in turn, could raise doubts about the ongoing ability of the U.S. to patrol the Persian Gulf and adjacent areas. What might that mean to Mid East politics and the price of crude?
The majority of the people in Bahrain are Shiites. They are ruled by a Sunni monarchy.
Many feel Iranian intelligence may have plants within the Shiite population in Bahrain who are helping to incite dissent and unrest. The Iranians would be thrilled to displace the U.S. 5th Fleet.
But, as important as it is to maintain a home for the 5th Fleet, Bahrain may be important for yet another reason. It sits adjacent to Saudi Arabia. More critically its Shiite population is proximate to the Saudi Shiite population. That could readily lead to “contagion” of any unrest from one Shiite group to their brethren.
Traders will keep an eye on Bahrain. It may be critical.
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