Egypt Detains Ousted Mubarak and Sons

Tens of thousands of Egyptians once again packed Tahrir Square Last Friday, to demand changes in the name of their country. They gathered to support each other and speak in Unison that they were unhappy with the speed in which the ruling military supreme council was moving with reforms, and that they wanted Hosni Mubarak, his sons, and many close associates to be investigated for fraud, abuse of power, and corruption which allowed them to amass wealth. That all changed as a government prosecutor (formerly appointed by Mubarak himself) announced publicly that Mubarak and his sons had been detained. Authorities followed this up by telling the press Hosni Mubarak and his sons were held for questioning related to corruption and abuses under Mubarak's three decade rule. Authorities disclosed the former leader's sons are currently jailed in Tora Prison.

Former Egyptian Ruler in Custody

The Former Egyptian ruler Hosni Mubarak, ousted by a popular revolt in February 2011, is under police custody at a hospital in the Red Sea Resort of Sharm El Sheik after suffering a heart attack. Authorities say he is well enough to answer questions. As anti-Mubarak protesters gathered outside the Hospital where Mubarak was being questioned, some political analyst suggested Mubarak may be getting assistance in getting out of the country, using the need for medical attention abroad as his reason. Whatever the case maybe, the English-Language website of Egyptian State-run newspaper reported the two Mubarak sons arrived to prison unshaven and wearing all white outfits (a far cry from the business suits the public is accustomed to seeing them in). The newspaper printed a quote from a source at the Prison saying "Gamal did not look like the Gamal we have seen on TV; he is in a state of total disbelief." The Associated Press reported also reported that as the Mubarak Sons were driven away to jail, a crowd that had gathered, pelted the police van carrying Mubarak sons, with stones, water bottles, and flip-flop (seemingly in a sign of disrespect as I don't think a Sandal can do permanent physical damage - although I might be wrong). Besides the two Mubarak brothers Gamal and Alaa, other prisoners at the Tora Prison include the former prime minister, the former minister of the interior, the former secretary general of the ruling party - Mr. Mubarak's former Chief of Staff.

It's believed that the ruling Military council and the de facto leader, Field Marshall Mohamed Hussein Tantawi, was feeling the pressure from the public's call for a faster investigation to be launched, and for the Revolution to move forward in a direction that would bring more equality to the Egyptian people. The recent Friday that protesters gathered by the tens of thousands in Tahrir square, there were calls heard for the resignation of members of the supreme council including Tantawi himself. A somewhat forceful and brutal push was made by the army to clear the square, the ended in several deaths. The square was filled with people through Tuesday even after the Army's attempt to forcefully remove protesters. Although progress in meeting the protesters demands with the announced investigation was made, critics warned of using extralegal means to try Mubarak and his sons, denying them of their full legal rights. Tantawi is an interesting character. He seemed to keep a low key up until the fall of Hosni Mubarak. Now he is the leader who must guide Egypt through this historical point in time, to transition into a government that hopefully meets the needs and aspirations of it's people. I can't help but remember however, about an article I read in the NY Times which I'll link to here, about the The Egyptian Military and the Economy. It was amazing how many interest the Egyptian army has in the economy. Reforms to open the economy seems to me, would mean giving up some of their control in the stakes they already hold. The enabler in many ways, was Mubarak himself who before his fall from power, was not only the President of Egypt, but also the Chairman of the Supreme Council that now leads the country.

Goldman Sachs Claims to be Bearish on Oil

I felt compelled to blog on conflicting messages coming from what are 2 of the largest Banks in the United States. First, lets start with Goldman Sachs. They recently released their views on oil and advised their clients to sell as oil had become "overpriced." Immediately when I heard this, I was very suspicious of Goldman Sachs intent on making this call. First off, If you want your clients to sell oil and oil related companies, you tell them only! Not make a statement that will be carried far and wide by the press and most likely acted upon by the public. I am holding an oil company, and did not "sell" as Goldman Sachs was suggesting investors do, and as a matter of fact, I expect the price for the barrel of oil will continue to rise with minor corrections along the way. I think Goldman Sachs has some of its old trick up its sleeve as advising the sale of oil now, seemed suspicious and made me immediately begin thinking about a possible alternative motives for Goldman's advice to clients to sell oil. One day later, Bank of America advised clients: oil prices will rise, buy oil.

It is known for example, that Goldman Sachs has recently been shrouded in controversy. One example that comes to mind in regards to misleading investors and shady practices on creating and marketing certain securities for sell, is the Abacus deal. Essentially, Goldman created a mortgage backed security for one of their major clients. This client was going to bet against the value of the security. The client was hedge fund manager, John Paulson. Mr. Paulson even picked out some of the underlying mortgages that were pooled to make the securities in the Abacus deal. All Mr. Paulson needed, was to someone to take the opposite side of his bearish bet on these particular securities. This is where Goldman comes in, they sold the asset to a German bank IKB. After the security lost most of its value, Mr. Paulson cashed in, winning on his bearish bet (where he profits if prices go down). The IKB

bank however, claimed Goldman did not disclose the risks nor the fact their client helped construct the Security that he than bet against. Mr. Paulson is an enigmatic Hedge Fund Manager who made Billions on his bet against the housing market. Goldman Sachs let him bet on instruments they sold to investors who were long on housing! Long story short, Goldman Sachs is not the most Virtuous firm in the world. They are filled with deceit and tricks. This call on oil I believe is just another one of those occurrences. Why make it widely known their position on oil and then advising their clients to sell oil related companies or oil future contracts. Here are several scenarios of why Goldman might have done this:

1) They are holding a large short position and getting people to sell in mass, pushes the price down further (benefiting a short position)

2) Ultimately they really felt oil might go up in the near term, so making statements that gets the public to sell in mass, could then provide Goldman Sachs with a potentially attractive buy price for oil and oil related companies.

3) They really are bearish on oil now, but that doesn't explain why they didn't tell their clients only (if their clients are selling along with the public, the price goes down even faster, and the selling execution price may not be attractive.

Bank of America Bullish on Oil

The very next day, Bank of America announces they are bullish on oil and made recommendations to buy it now. Now things are getting a little confusing. Goldman says Sell oil, Bank of America says Buy Oil - What is really going on here? That was a rhetorical question! I fully support the notion of doing your own research. Don't wait on the so called "experts" to tell you what you should do. A lot of people do, and look at the conflicting opinions of two of the largest banking powerhouses in the world. Just for kicks, I'm going to embed the Company ConcocoPhillips in this post. This company is in the Oil & Gas Integrated Industry. I have followed it for 9 months now. I'll follow up in a couple weeks to see where we stand for this company (April 12th closing price was $77.16). It's my belief ConocoPhillips, and oil Prices both go up.

ConocoPhillips 5 day Stock Chart

Yahoo Article on Oil Prices

Following Goldman Sachs' negative call on crude prices which took the wind out of the commodities rally this week, Bank of America Merrill Lynch is predicting a 30 percent chance that Brent crude could hit 160 dollars a barrel in 2011.

"Commodity prices should move broadly higher in 2011 on robust economic growth in emerging markets, despite relatively weaker growth in developed markets," said Sabine Schels, a commodity strategist at BoA Merrill Lynch in London in a research note.

"With oil demand expanding rapidly and Libya production down by at least 1 million barrels per day, we forecast (the) Brent crude oil price to average 122 dollars a barrel in the second quarter, and believe prices could briefly break through 140 dollars in the next 3 months," she said.

Given the risks from the situation in the Middle-East and North Africa, Schels says there is a chance the price could go even higher over the next 2 months.

"Under our upside risk scenario, Brent prices could average this year between 125 dollars a barrel and 160 dollars a barrel," Schels said

Changes for Russian State Company Boards

Several weeks ago, Russian President Dmitri Medvedev ordered top government officials in Russia to step down from the Board of Directors of State Companies. Although I didn't doubt for a second that top government officials sat on these type of Boards, on Tuesday, the NY Times reported that Deputy Prime Minister Igor I. Sechin, resigned on Monday as the Chairman on the Board of Directors of Rosneft, a Russian State-run Oil company. Mr. Sechin announced his resignation at the Rosneft Board meeting, less than two weeks after President Medvedev ordered the Prime Minister, Vladimir Putin, to "initiate" removal of his deputies and ministers from state companies. The Russian President appears to be leading with Putin carrying out the orders, instead of the other way around, a common conception of the power dynamic behind Russia's government.

Many people including many analyst, believe the Russian President is attempting to build support among his elite group of supporters, in anticipation of the upcoming Russian Presidential elections. The order that was given by Mr. Medvedev set a July 1st 2011 deadline for all state companies to begin the removal process of these government officials, from their boards, Well before the elections. Of course this means Mr. Sechin and Rosneft moved quickly, as his resignation has been accepted. Maybe a possible 3rd candidate? The deputy Prime Minister running against Vladimir and Medvedev?? Could get interesting but I do think the implications of the Russian President asserting his authority and ordering the Prime Minister and better internationally known (and former President), Vladimir Putin, speaks volumes that Medvedev is definitely seeking a second term as President. Many have speculated and still do to this day, that Prime Minister Putin is really the authority behind the Russian government.



It will be interesting to see if Mr. Putin and Mr. Medvedev are having a power struggle behind the scenes, or if this is all part of the political theater that can often be carried out when a national election draws near for two powerful men to face off. It will be interesting nonetheless. I am pretty sure the world will be watching. Here is an article in the NY times titled, "Putin Makes Russians Wonder Who Will Lead Them Next." I have linked to this story: Russian President (because this article came out a day after this post was initially created, I came back to add it).

Ivory Coast's Laurent Gbagbo Surrenders

There have been interesting developments in the world over the past several days. The Ivory Coast Strongman Laurent Gbagbo surrendered to French, UN, and Political opponent, Mr. Alassane Ouattara's forces. I have been watching these developments since back in November 2010, when the disputed elections took place. The Man surrendering today was unwilling to give up power even though he lost the presidential election. As this drama unfolded, I began watching the price of Cocoa. Since Ivory Coast is the worlds Largest Cocoa producer, I figured that unrest and political gridlock could lead to an increase in prices. I watched as Cocoa went from 2700 to 3700 in three months. It has since gone down but my initial instinct had been right: Cocoa prices did increase likely a result of the political drama taking place.

Observing Current Commodity Prices

I must admit, my development in trading commodities has to this point been just on paper. Meaning, that I am practicing and want to consider that I know what I'm doing, before I venture into the world of Commodity Trading. So far, my hunches, insights, and observations have made me feel satisfied that my hours study, observing prices daily, and taking a close interest into the price behaviors of commodities in general, have filled my ambition to learn the foundations. Now that the Ivory Coast has begun Cocoa Exports again (the Ivory Coast is the world's largest Cocoa exporter) I will expect prices to fall. I will keep an eye on this and will record any observations in my journal that I write in. Obviously the next step will be to venture into the field of Commodities trading itself, which is a whole new environment to learn and build lessons and experience. Don't worry, I'll be sure to write about them. Although I am glad the Ivory Coast conflict appears to be coming to an end, my heart goes out to all those who have to rebuild their lives, and find their hopes and dreams once again. I hope they do just that, and life becomes better for all who have carried the burden of the recent political violence on their shoulders.

The other development I have taken note of recently was the NYSE not interested in the deal proposed by Nasdaq / ICE. The fact that the NYSE Euro-next may be merging with the German Exchange Operator Deutcshe Boerse seems nearly inevitable at this point. What confused me slightly was NYSE reasoning for refusing the offer. Claiming that fears of antitrust related obstacles for passing a deal and concern that a consolidation with Nasdaq could mean job losses as overlapping functions of the exchanges would be aligned. The opportunity to have an Atlantic powerhouse by merging with the German exchange, according to NYSE, would help them expand and reach deeper into the European markets, while resulting in a lower unit costs, benefits that come from adding many new clients. I am watching this only because there seems to be a consolidation in stock exchanges happening right now. The Toronto and London Stock Exchanges were having talks earlier about possible collaboration, and so was the Australian and Singapore Exchanges. Those deals don't appear to be going through but keeping on eye out for emerging deals has been one of my goals. It is time intensive, but well worth the effort!

Math and Banking at the Khan Academy

The Khan Academy is a free online school that is available to anyone with an internet connection and a desire to learn more. This school was conceived and built by a Harvard Graduate. It has been a wonderful resource personally for me in understanding subjects from Calculus to physics to banking and investing. The Khan Academy offers prerecorded lessons to follow along with. The creator and founder is a former Wall Streeter who turned his energy and attention on creating a free online learning place accessible to anyone around the world.I want to tell a story about how I first came to hear of the Khan Academy. It was really a split decision on reading a newspaper one day, what a wonderful decision it turned out to be!



I was taking a lunch break nearly a year ago today, and as I waited for my food to be ready, a newspaper stand caught my attention. I didn't need a newspaper, I had the two delivered to my home each day, still to be read. But this was a funny feeling, so I turned and walked to the stand curious to what I'd see. There was one single newspaper left

for sale. It was the SF Gate, and a large headline that read, "Salman Khan, math master of the Internet" through his Khan Academy. Mr. Khan was a 33 year old MIT graduate who quit his job in the hedge fund industry. The article went on to talk about his desire for helping others that extended beyond just enriching clients or a firm. I liked this story, and wanted to read more about it. I ate lunch, bought the paper, and tucked it away to read later when I got home. I sat at my desk wondering, what the Khan Academy was.

Khan Academy Lesson on Banking

A few hours later after arriving home and sitting down to read the rest of the story, I realized that it was meant for me to see that article. I checked out the Khan Academy and was beyond impressed with what I found. Mr. Khan has methodically arranged his videos and lectures in organized subjects. For example, you can watch his videos on Banking, Compounding Interest, The Gold Standard, Money and finance, and much more. He has an MBA from Harvard Business School, and a BS in Mathematics from MIT. You can tell, the guys is pretty smart (he narrates most lessons). Here is an example of one of his introductory videos on banking. He is a simple genius in my mind. He also has many videos on subjects that vary from Algebra to Physics! I must admit that I have learned a lot from his videos. He makes things simple and guides you through his lessons. His style is making videos in which it appears you are viewing a blackboard. He uses the effect of chalk writing (using different colors) on the board, and his voice speaking (Mr. Khan is not visible in the videos) as he goes through the lesson, felt to me as if I had a high quality Harvard educated, private tutor. In many ways, that's exactly what it is.... I have seen people writing and leaving comments for him thanking him profusely because his videos helped them pass an exam, or become more confident about their math knowledge and understanding. I've even seen Mr. Khan responding, quite humbly.



This is a video where Bill Gates talks about the Khan Academy. I thought it was pretty remarkable and quite an achievement that Mr. Khan has received the attention of Bill Gates. Not only is he one of the richest men in the world, he also a steward in the field of education. This Video is from Mr. Bill Gates' website, the Gates Notes. I particularly like during the interview, when he talks about using the Khan Academy lessons himself. The reality that Mr. Khan devotes his time to using technology to educate and help others by providing his free online school, is nothing short of amazing. His desire to enlighten the world with education, opportunity, and free access to quality lessons, makes his Khan Academy a rare gem. I believe this is what Bill Gates saw as well. A dedicated, motivated, intelligent individual, using his talents and time, working on a project that ultimately enriches others in the field of education. I think Bill Gates knows a visionary when he sees one, and Mr. Khan is definitely one. He has begun to transform his vision, using technology to educate curious minds. I commend him and respect his hard work and vision that has brought the Khan Academy into existence. Having Mr. Gates interested in what you're doing, and potentially collaborating with the Gates Foundation, can't be a bad thing! This may help him expand and provide even more instruction online available anyone. There are plenty of lessons to see at the Khan Academy, I highly recommend experiencing Khan Academy for yourself. I have learned a great deal; I'm certain you will too!

Khan Salman Bio:
Khan Academy's Founder

Salman Khan (Sal) founded the Khan Academy with the hope of using technology to foster new learning models. He is currently the portfolio manager of a fund based in Menlo Park, CA. Prior to this, Sal was one of the initial employees at MVC Venture Capital. He has also worked as a Technical Architect at Scient Corporation and as a Senior Product Manager at Oracle Corporation.

Sal received his MBA from Harvard Business School where he was president of the student body. He also holds a Masters in electrical engineering and computer science, a BS in electrical engineering and computer science, and a BS in mathematics from MIT where he was president of the the Class of 1998. While at MIT, Sal was the recipient of the Eloranta Fellowship which he used to develop web-based math software for children with ADHD. He was also an MCAT instructor for the Princeton Review and volunteered teaching gifted 4th and 7th graders at the Devotion School in Brookline, MA.