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Abu Dhabi Buys $7.5 Billion Stake in Citi

Middle Eastern Investment May Loosen Stalled Credit Markets

The Abu Dhabi Investment Authority has agreed to buy a $7.5 billion stake in Citigroup.

The investment has spurred speculation that Middle Eastern countries may invest more aggressively in US banks to grease the stalled American credit market.

Citigroup and other major US banks suffered multi-billion dollar write-downs on securities linked to sub-prime mortgages after millions of Americans defaulted on home loans this summer.

The sharp and often unpredictable drops in asset-value have created an atmosphere of uncertainty among banks and tightened credit markets in the US and Europe.

The investment will raise Citi capital reserves which will in turn help them to lend.

News Leads Dollar Higher

Dollar traders liked the renewed interest in the riskier US currency.

The news sent the greenback 1.2 % higher against the yen to Y108.80.

Al-Jihad Leader Tries to Change the Rules of Jihad

Egypt's Al-Jihad Group Changes Course

Egypt's leading Al-Qaeda faction has published a series of articles in two Arabic language newspapers criticizing the religious justifications for Jihad.

In "Revisions," Al-Jihad Group's founder and ideological father, Sayed Imam El-Sawahri, renounces violence and calls for an end to militant operations in Muslim countries.

In the pamphlet, Sayed Imam argues that the targeting of all civilians and tourists is violation of Sharia, or Islamic Law.

The author, who is better known by his underground name Dr. Fadl, published the "Foundations of Preparation for Holy War," which provided the original fodder for militant Islamic ideologies that have emerged over the last several decades.

Sayed Imam's Al-Jihad group is partially responsible for the assassination of Egyptian President Anwar Sadat in 1981 and the Luxor massacre in 1997.

Triggering an Internal Debate?

The fact that Sayed Imam holds such prominence within the jihadist community means the Revisions may trigger a re-think among Arab jihadist groups.

Sayed Imam's very public shift is also likely to rekindle a debate in radical academic and religious circles about the rules of armed jihad.

The Revisions is primarily aimed at preventing future attacks in Muslim countries and it is doubtful they will affect Al-Qaeda operations in Iraq and Afghanistan.

Week In Review

**** A divided Lebanese parliament postponed a vote to elect president Emile Lahoud's successor for the fourth time since September.

The president's term ends on Friday and observers fear the fermenting political crisis may lead the country to civil war.

**** MTV's new Arabic music video channel, MTV Arabia, began broadcasting in Cairo and Dubai.

Viacom and the Dubai-based Arab Media Group face competition from satellite networks and home-grown channels who have exclusive contracts with artists.

MTV Arabia Launches in Cairo and Dubai

New Channel Aims For Middle East's Under Thirty Demographic

Viacom and the Dubai-based Arab Media Group have launched a version of MTV aimed at an Arab audience.

MTV Arabia premiered at midnight on Saturday with performances by the rapper Ludacris, the Senegalese superstar Akon, and the UAE hip hop band Desert Heat.

The American-based music video channel plans to feature locally produced reality television programs along with Arab hip hop and international music videos.

With two-thirds of the Middle East's population under thirty, the market for MTV Arabia is potentially huge.

The opportunity for SMS-based revenue is particularly high considering the large number of people using mobile phones in the region.

A Cluttered Arab Market

The venture faces challenges.

The Middle East is already home to over 30 satellite channels airing Arab music videos.

MTV Arabia's coverage will be without many of the region's top stars, who are are locked into exclusive contracts with media companies like the Saudi-based Rotana Music Group.

This is one reason why the new channel will focus on hip hop and R & B videos, which MTV executives see as a largely untapped segment of the market.

MTV also hopes to lure viewers with Arabic versions of Pimp My Ride and The Dream, a show where viewers watch as awkward teens are transformed into stars.

Navigating Cultural Mores

MTV has a history of doing well with provocative music videos and scantily clad women.

The parent companies' executive are aware of the risk the brand may alienate conservative Arab culture.

Arab Media Group CEO Abdullatif al-Sayegh  has said conscientious editors will cut out any offending material.

MTV's Bhavneet Singh gave his reassurances with a bit more pitch: "We hope to provide a platform for Arab youth to break boundaries without disrespecting their tradition and culture."

Time will tell if such a mission is possible and, more importantly, profitable.

Lebanon May Face No Government, Civil War

Divided Politicians Unable to Reach Consensus

The deeply divided Lebanese parliament has postponed a vote to elect President Emile Lahoud's successor for the fourth time since September.

The vote has been delayed until Friday -- the day Mr. Lahoud's term will end.

Fears of Civil War

Observers fear that the Western-backed coalition and pro-Syrian opposition will fail to find a compromise candidate by the end of the week, leaving Lebanon without a head of government.

The pro-Western governing coalition has threatened to elect its own president if the opposition fails to support a consensus candidate.

The leading opposition party Hezbollah is pushing for a candidate friendly to its Syrian and Iranian backers.

Hezbollah has hinted that it will form its own rival government if an anti-Syrian president is elected to power.

The party has military and social development wings that enjoy broad popular support. 

Many fear the formation of a rival Hezbollah government might provoke a civil war.

Even if the rival parties succeed in electing a new president they will likely walk a rough path toward compromise when choosing the next prime minister and forming a government.

The Larger Game

The political crisis in Lebanon has been shaped by the regional struggle for power between the United States, Israel, moderate Arab countries, Syria and Iran.

According to Paul Salem of the Carnegie Endowment, the political deadlock is the result of a "confrontation between states taking place in Lebanon."

The trap for political turmoil was set nearly three years ago when Western governments linked the assassination of Lebanese prime minister Rafik Hariri to Syria.

The car-bombing and subsequent accusations triggered massive street demonstrations that forced Syria to end its occupation of Lebanon.

Week In Review

**** UN Secretary General Ban Ki-Moon called the melting Antarctic ice caps an "emergency situation" and urged world leaders to act swiftly in the fight against global warming.

**** Police probed 100 offices across Israel to determine whether Israeli prime minister Ehud Olmert bartered public permits for a discounted price on his home.

The bad press has weakened the prime minister in parliament ahead of the Israeli-Palestinian peace conference scheduled for later this month in Annapolis.

**** Al Gore's investment fund Generation Investment Management forged an alliance with the San Francisco venture capitalist firm KPCB. The investment groups pledged to fund more clean technology start-ups.

**** Iranian officials gave the International Atomic Energy Agency (IAEA) blueprints for making uranium hemispheres -- the key component for nuclear missiles-- a day before an IAEA report to the UN.

The hand-over took place days after British prime minister Gordon Brown suggested his country may bypass the UN in seeking EU-wide sanctions against Iran if Russia and China continue to delay meaningful action in the UN security council.

Iran Hands Over Weapons Blueprint

Iran Gives IAEA Warhead Blueprints

Iran handed over a nuclear weapons blueprint to the International Atomic Energy Agency (IAEA) on Thursday, which details how to mold uranium into hemispheres used for making nuclear weapons.

The IAEA requested the documents four years ago after finding them accidentally during an inspection of Iranian nuclear facilities.

Iranian officials said they received the plans unsolicited from AQ Khan's nuclear smuggling network, and that they do not indicate Iran's intention to build an atomic warhead.

The blueprint arrived ahead of an IAEA report due this week that will evaluate Iranian cooperation with the UN nuclear watchdog.

The report will most likely confirm Iran is continuing to enrich uranium in defiance of a UN Resolution.

British PM's Speech Signals United Western Bloc

Western powers have given the impression over that last several days that they will push harder on Iran as a united bloc.

British Prime Minister Gordon Brown gave a speech on Monday suggesting the UK would help bring tougher EU sanctions against Iran if Russia and China continued blocking a third round of sanctions in the UN Security Council.

Britain, France, the US, Russia and China sit on the council and each country has the power to veto potential sanctions.

Mr. Brown's Monday speech places Britain in line with French and US leaders who have endorsed EU sanctions regardless of the outcome at the UN.

A US envoy was quick to call the hand-over of the blueprints "selective cooperation."

The concern, it seems, is that Russia and China may point to the documents as evidence of Iranian transparency and continue to prevent the security council from taking action.

Gore, Kleiner Perkins Firm Forge Clean Tech Investment Alliance

Gore To Sit on Board

Al Gore has joined the board of the Silicon Valley venture capitalist firm Kleiner Perkins Caulfield & Byers.

Mr. Gore's new spot is the result of an alliance between Kleiner Perkins and his own firm Generation Investment Management.

Mr. Gore will bring a vast pool of contacts to Kleiner Perkins

The Nobel Peace Prize winner and former vice president sits on the board of Apple and serves as a senior adviser to Google.

Observers expect that Mr. Gore will be a great aid to Kleiner Perkins "clean tech" start-ups whose profit margins still depend largely on government subsidies and who have few links to big business.

Venture Capital Interest in Clean Tech

The announcement comes as venture capitalist groups have pushed more money into the "clean tech" industry.

In the first half of 2007 global venture capitalist investment in clean technologies surged to $1.1 billion.

Kleiner Perkins has said it plans to devote one-third of its $600 million investment fund to clean energy technology start-ups by 2009.

Olmert Probe May Have Consequences for Peace Conference

Police Raid 20 Locations Across Israel in Olmert Probe

Over 100 police officers raided offices across Israel Sunday morning, seizing evidence in connection with several criminal investigations involving Israeli Prime Minister Ehud Olmert.

Police were looking for documents relating to Olmert's purchase of his home in Jerusalem.

He is suspected of buying the property at a discounted price in return for helping the contractor obtain building permits.

Olmert is also under two separate investigations involving improper political favors during his term as trade and industry minister between 2003 and 2005.

The Prime Minister has denied any wrongdoing.

Consequences for Peace Summit

The police sweep occurred just as Olmert's popularity had begun to rebound after plummeting during last year's inconclusive war against Hezbollah.

A criminal indictment of the Prime Minister would seriously jeopardize the peace summit scheduled to take place this month in Annapolis, Maryland.

Even if a peace deal were to be reached, the Israeli leader's vulnerability would make implementing an agreement difficult.

Avigdor Lieberman, leader of the right-wing Yisrael Beiteinu party, has vowed to undo Olmert's coalition in the Knesset if final-status issues -- Jerusalem, refugees, borders -- are discussed at Annapolis.

Consequently, Israeli and American leaders have begun dampening expectations ahead of the peace summit. 

The lowered hopes come despite Olmert's announced plan to release 400 Palestinian prisoners by late November as a gesture of good will.