EGYPT'S STOCK MARKET AND ECONOMY MIGHT NOT BE COLLAPSING IF OBAMA STOOD BY THE EGYPTIAN ARMY INSTEAD OF THE MUSLIM BROTHERHOOD

CNBC: Egypt's bourse suffered its largest one-day drop in four months on Sunday after hundreds of people were killed in a crackdown by the army-backed government on supporters of the Muslim Brotherhood. 

Cairo's main index tumbled 3.9 percent to 5,335 points. It had dropped 1.7 percent on Wednesday, when security forces started taking action to disperse protesters, and was shut on Thursday because of the violence. 

The market traded for three hours on Sunday instead of the usual four, to give time for people to return home before a curfew. 

"Civil war is knocking on the door and lots of lives have been shed and I don't think it will stop here," Ali Adou, fund manager at Abu Dhabi investment firm The National Investor, said of Egypt's political situation. 

"It will be a while before people will think of investing in the current environment."

IT IS INSTABILITY, UNCERTAINTY, AND THE PROSPECT OF A CIVIL WAR WHICH IS DESTROYING THE ALREADY FRAGILE EGYPTIAN ECONOMY.

MORE PEOPLE/INVESTORS WOULD ACTUALLY BE MORE OPTMISITIC AND INVEST MORE IN EGYPT IF THEY FELT THAT OBAMA AND THE WEST WERE GOING TO FULLY SUPPORT THE ARMY AND OPPOSE THE MUSLIM BROTHERHOOD.

IT'S NOT THE "UNREST" THAT'S THE PROBLEM.

IT'S THE FEELING THAT THE UNREST MIGHT BE PROLONGED AND COULD EVEN LEAD TO A RETURN OF THE MUSLIM BROTHERHOOD THAT'S THE PROBLEM.

IF EVERYONE FELT THE US AND THE WEST - AND SAUDI ARABIA - WERE GOING TO STAND BEHIND THE EGYPTIAN ARMY AND SUPPORT THE RE-SECULARIZATION OF EGYPT, THEN THE MARKETS WOULD BE BOOMING NOW - AS SMART INVESTORS WOULD REALIZE THAT THINGS HAVE BOTTOMED OUT.

AS LONG AS OBAMA SUPPORTS THE MUSLIM BROTHERHOOD  - OR DITHERS, AS HE DID WITH THE IRANIAN UPRISING - THE LIKELIHOOD OF TOTAL ECONOMIC COLLAPSE INCREASES AND AS IT DOES SO DOES THE LIKELIHOOD OF AN EVENTUAL MUSLIM BROTHERHOOD VICTORY, (AS AFGHANISTAN PROVES THAT RADICAL ISLAMISTS CAN PROSPER IN A DESOLATE, DEGRADED, DEHUMANIZED ECONOMY).

IN OTHER WORDS, THE FUTURE OD A SECULAR AND PROSPEROUS EGYPT DEPENDS ON WHAT OBAMA DOES - OR DOESN'T DO.

AND THERE IS NO BASIS FOR BELIEVING THAT HE WILL SWITCH SIDES AND NOW SUPPORT THE EGYPTIAN ARMY.

SIGH.