Today stocks are having another bearish session, as oil and gold remain buoyed by Middle East issues. We`ll focus on the region once again.

In comments yesterday, meanwhile, Ben Bernanke adhered to his regular line that commodity price fluctuations are temporary in duration, and in effect, that inflation remains a minor risk as long as the labor market remains lax, hinting that the bond purchase program will be maintained until its completion as announced. The Chairman is communicating his vision clearly. The Fed`s assessment remains that unless job growth can be brought back sustainably, downside risks to growth predominate and policy will be calibrated in accordance.

Moving on to the chaos in the Arab World, NATO is discussing the possibility of a no-fly zone in Libya, and news sources report that opposition leaders are considering requesting air strikes on the regime`s military forces, as they attempt to regain the oil producing regions of the country that remain beyond the Colonel`s reach. And as these events unfold, we find that apart from a few mavericks, like Venezuela`s President Chavez, Colonel Gaddafi has lost all of his friends. The U.N. General Assembly yesterday condemned the Libyan government`s actions unanimously in a rare show of unity among the divided interests that make up the membership of the assembly. Gaddafi will go alost certainly, but how long he can hold on to power in the face of adversity remains to be seen.

A more interesting development has been the announcement by some internet-based groups calling Saudi citizens to "days of rage" on March 11^th  and March 20^th. The left-wing Saudi Prince Al-Waleed bin Talal was also heard saying that unless King Abdullah seizes the opportunity to introduce radical reforms, the turmoil in the rest of the Arab World will spread to his country. CDS on Saudi debt, which isn`t traded in a way that would make default insurance meaningful, has also reached highest ever levels recently, indicating that external speculators see some chance of a nightmare scenario of large scale Saudi turmoil is a genuine possibility.

Would we see Saudi Arabia become victim to the same kind of pressures that have brought seemingly unassailable Arab dictators down? While the momentum is real, and it could easily hearten the kingdom`s opposition to take risks and throw the gauntlet to the Al-Saud family, Saudi Arabia does not have the kind of problems that Egypt, Libya, or Tunisia suffer from, and  the democracy and Westernization demands of the isolated voices does not find the kind of endorsement that would lead to a rapid collapse of the system. Islamic revolutionaries are probably the main risk for the kingdom, but they are surveilled well, and the liberals of the kingdom perhaps lack the genuine basis of conviction or frustration that would make a Saudi revolution possible, at least for now. Prince Waleed bin Talal, for instance, is a very isolated character in the Saudi world in terms of his ideological outlook, and it is not surprising to see him endorse the protests. Indeed he was perhaps  hoping for them since the days of Abd AlNasser in Egypt.  As we noted here before, Saudis derive their legitimacy from religious arguments and not barefisted brutality, as the toppled dictators did, and therefore their chances of survival are considerably higher.

This week we`ll have the NFP data, and a surprise to either direction could prove to be decisive for the next few weeks. But the Middle East unrest issue is the most important one for now, and will continue to dominate market action, sidelining even the Eurozone sovereign debt related problems.