Obviously, today was a very bad day for stock markets all around the region! Our market went down 3.7%, Saudi 4.6% in the opening 2 mins, Qatar down 3.3%, Egypt down 4.9%, and Dubai a whopping 11.7% in one day!!!

Billions have been lost. Many investors, most of whom are small investors, are suffering and losing alot at the moment!

The downfall is not a small one by any measure, for example, look at the staggering numbers where I show the difference from the highest peak till now! Most of these peaks are only 2 months old too!

Kuwait - 12054 to 10045 = 16.7%
Dubai - 1302 to 693 = 46.7%
Saudi - 20635 to 14900 = 27.8%
Qatar - 12930 to 9282 = 28.2%
Abu Dhabi - 6258 to 4021 = 35.7%
Egypt - 69158 to 52683 = 23.8%

Looking at these numbers, our market is still holding on comparitively although today was disastrous looking at the number of trades and orders.

Anyway, this brings me to my question…..what next??

This crash will cause a major social problem without a doubt! Many people have lost their money in the market, since most are not really investors as much as they are day traders looking to make a quick buck, which means they lose their buck quickly too! Many of them cant afford to do so! After everything is done and dusted, we will have a whole class of people who will be in heavy debt and in huge financial burdens!! Many people took loans or mortgaged their houses to catch the wave, and now they wave turned into a tsunami that is destroying them!

Realistically, these people I am talking about will not be able to afford their BMWs and Mercedes, and will start thinking of getting Hondas and Toyotas, they will have to find jobs much harder, they will switch from shopping at Sultan Center to trying to buy in bulk…and so on. This is not a joke, everything I am talking about is something that is realistic result of huge financial losses and being in debt! In Kuwait, I would guess the effect would be felt alot less than in Saudi, where so many more people are trading there. Many will be desperate…..what will they turn to? God? Drugs? Alcohol? Terrorism? Socially, this will cause a major problem in my opinion!

Politically, this desperation will also cause changes! For example, we have had people in protest outside the stock exchange as well as the parliament in the past few days asking the government to interfere! It has turned very political and very ugly! Since everyone is used to the government taking full care of them as well as give them free money all the time, everyone is expecting the government to enter the market with their millions and save them!! Who cares about the future generations?? We cant lose money!! Give us back our money!! Its ridiculous really, but its happening with the support of many ppl believe it or not! The concept of a free market doesnt work here.

Also, the market started its crash the same day the new government was formed! This cannot be a coincidence! The market reacted negatively on the appointed government from top to bottom! Alot of resentment started happening, and slowly went into previously uncharted territory, the Emir himself! In all my years, I have never seen so many people publicly criticize the government and Emir! Go to any of the web forums and websites dedicated to the stock market and you will be amazed by the comments written! I dont think its right to blame the Emir or the government for the crash at all, but at the same time I dont think its smart to have pics of the Emir and the head of parliament on a picnic one day played billiardo, and looking for fagi3 the next on the front pages of the newspapers when everyone is suffering from the market, it really isnt the smartest message you want to send! Then right after that the Emir goes fishing in Oman, and by reading some of the comments on those websites, many people are unhappy. So it will be interesting to see which way the government will go on this….will they be smart on how to handle the situation or will they just have a reaction move just to please the masses.

To make things even more interesting, it is nearly an election year!! So most parliament members will try their best to please the masses to get the votes even if that means the country will lose millions in the proccess.

One example of what has happened is the news that Dr. S3afag Al-Rukaibi has resigned from his position as head of the Kuwait Stock Exchange following a meeting with members of parliament and that the attacks went to a personal level from them against him!! I did say before that I think he should take responsibility for something like the system failures hat occured so many times, and also some rumours about him being corrupt (nothing thats proven till now)……but the fact that he resigned because of pressure from parliament members because the market is falling is just ridiculous!! If thats the case, then he should be given a few million KD as a reward when the marken went up from 2000 points to 12000 points!!

I know this post is longer than usual, but I really think its an interesting scenario that we are living right now! How much further will it go? What will be the political response? and what will be the social effects in the future?? For us and all the countries in the region!