Kuwait's government resigns...and part of the problem is financial distress in the stock market.
Let us suppose we have about 6 more years of lackluster global economic performance. What happens?
(By the way - we had a 25 year bull market in the U.S. A bear market that lasted a total of 8 - 12 years would be entirely normal.)
Excerpt:
“It’s becoming ridiculous – it’s only six months since we had an election. If the same prime minister comes back we are just back to square one,” said a former minister.
The turmoil has cast doubt on a government-led plan to prop up the stock market. Local investors, mostly from the large middle class of government employees, have lost money in the bourse’s recent fall, leading to demonstrations against the government and temporary closure of the exchange.
The Kuwait Investment Authority, the sovereign wealth fund, was last week instructed by the government to buy up to 10 per cent of local equities to support prices and confidence. It is likely to proceed with the plan regardless of the political situation, but analysts said the turmoil was dangerous given the global financial crisis.
“The Kuwait stock exchange has been bleeding for months and the country is beset with a feeling of malaise and stagnation,” said Abdullah al-Shayji, a political scientist at Kuwait University. “The government has struggled for several years now and this is the shortest-lived cabinet in our history.”
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