Dubai State Of Affairs

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Dubai State of Affairs Nov 26, 2009
Hitting the newsstreams today (and yesterday) surrounding Dubai Inc. government holding; Dubai World and subsidiaries on brink of default. Debt payments on hold for coming 6 months. Restructuring of (part of) $59 billion at hand.

Sheikh Mohammed already wipped out a few high placed people surrounding him. Read below.

1. Shakeup in Dubai Deposes Principal Emirate Figures: Biographies
2. Dubai World Seeks to Delay Debt Payments as Default Risk Soars
3. Dubai Holding Says Ba’alawy Resigns as Chairman of Nasdaq Dubai
4. Dubai Autonomy Fades as Crisis Strengthens Abu Dhabi (Update2)

Tighten your bellies expats... debt is not the solution. MCL will be able to tell you all about CDS instruments and junk bonds.

Inquiring minds should note that this is basically a bounced cheque :twisted:

Right MCL? :bom:

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Re: Dubai State of Affairs Nov 26, 2009
GAME OVER....pack and leave..in May 2010 Dubai will be bankrupted.
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Re: Dubai State of Affairs Nov 26, 2009
gertrude wrote:GAME OVER....pack and leave..in May 2010 Dubai will be bankrupted.


I bet you don't even know what that really means...its just a change of ownership to the bondholders.

The rocks and dust will prevail. Camels will still run wild only the vision 1.0 would fail. Perhaps 2.0 can survive. Who knows...I wonder what chrystal bowl you have by forecasting May 2010. :drunken:

Gotta have one of those ;)
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Re: Dubai State of Affairs Nov 26, 2009
gertrude wrote:GAME OVER....pack and leave..in May 2010 Dubai will be bankrupted.


Sounds like this makes you happy!
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Re: Dubai State of Affairs Nov 26, 2009
Hello Expats,
My name is youssef from BBC in London, the World Today programme. We're
doing a package about the financial situation in Dubai. Would any of you be
prepared to grant us an interview over the phone of about 3 minutes in
the next 70 minutes - i.e. by before 12 middday Dubai time on Thursday?

thanks.

my number is 00-4420-7557-1755 or email me on Youssef.Taha@bbc.co.uk with your number and I'll call you right away
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Re: Dubai State of Affairs Nov 26, 2009
this is insane..the CDS spreads are quoting above tht of Iceland in 2008.. tht means the traders eventually expect dubai to default..
the debt standstill announcement coming after dubai markets close down for holidays makes it even more difficult.. the world would have preffered tht the govt officials announcing it during the day n standing in front of the investors to assure them
xdude
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Re: Dubai State of Affairs Nov 26, 2009
It doesn't look good in the short run, I have to say.

The fundamentals always come into play - borrow and eventually you have to either pay up or disappoint your creditors.

Cheers,
Shafique
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Re: Dubai State of Affairs Nov 26, 2009
Well Dubai is making world news lately. Just watched the news reporting that alot of people are worried that Dubai world will default on its debt. 56 billion in debt. Thats not chicken feed. Dubai does not have the oil riches that its neighbors have either. Housing prices have dropped by 50% they reported. As for Canada we are looking pretty good. Good bank management. The Russians are going to invest heavily in our dollar. People are getting pretty leary of the US dollar.
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Re: Dubai State of Affairs Nov 26, 2009
Ahh..I see we are failing to see one thing that Dubai is a city which is part of the UAE and not an independant state. And I don't think that UAE (i.e : Abu Dhabi ) will let Dubai sink.

Wishfull thinking...perhaps ?
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Re: Dubai State of Affairs Nov 26, 2009
definately a wishful thinking... somewhere AD is goin to draw a line n say.. enough is enough.. first sort out ur internal mess n then come to us for help..
don't expect AD to keep funding dubai's profligacy
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Re: Dubai State of Affairs Nov 26, 2009
xdude wrote:definately a wishful thinking... somewhere AD is goin to draw a line n say.. enough is enough.. first sort out ur internal mess n then come to us for help..
don't expect AD to keep funding dubai's profligacy


If you guys read the articles I added in the first post, you'll know that Dubai will always be backed by the UAE Central government.

Dubai's Mo recently said on an investment conference to all participants and media: shut up :D about speculation whether Abu Dhabi would back up Dubai. He talked abit about same tribes and stuff, but the message was obvious. AD would never drop Dubai.

They will be more centralized probably to the UAE instead of following their own Vision/policy, in financial terms. AD will 'reign them in' fo sho. :bigsmurf:
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Re: Dubai State of Affairs Nov 26, 2009
Yup thats what I was thinking aswell as I did read that paticular statement and my comment was based along that line of thought.

In Arab specially beduin culture it would be a great disgrace for something like that happen. AD will support Dubai as long as it is able to do even if it gets nothing out of it.

If you guys remember the history of UAE, RAK orginally didn't join the UAE in the first year the next year the great late Shk Zayed threatened to quit as president if it didn't. Talks ensewed and RAK joined UAE. Even though RAK had nothing to offer and still didn't upto recently.

Finacially Abu Dhabi and Dubai ( before the crash ) were much better being off independant rather than under the flag of one country.

But the roots, culture and traditionruns much deeper than just money. Why do you think the wasta menatality is so rife here. It is very disrespectfull and almost impossible to ingore a request from an elder or someone who might have good ties with your tribe or family.

Law and money come second after these ties and bonds.

Sorry to go offtopic but a lI just thought a little background insight was needed before jumping to conclusions. And it can be sad to see an outsider G( someone resideing outside the UAE and arabworld ) understands this better.
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Re: Dubai State of Affairs Nov 26, 2009
desertdudeshj wrote:Yup thats what I was thinking aswell as I did read that paticular statement and my comment was based along that line of thought.

In Arab specially beduin culture it would be a great disgrace for something like that happen. AD will support Dubai as long as it is able to do even if it gets nothing out of it.

If you guys remember the history of UAE, RAK orginally didn't join the UAE in the first year the next year the great late Shk Zayed threatened to quit as president if it didn't. Talks ensewed and RAK joined UAE. Even though RAK had nothing to offer and still didn't upto recently.

Finacially Abu Dhabi and Dubai ( before the crash ) were much better being off independant rather than under the flag of one country.

But the roots, culture and traditionruns much deeper than just money. Why do you think the wasta menatality is so rife here. It is very disrespectfull and almost impossible to ingore a request from an elder or someone who might have good ties with your tribe or family.

Law and money come second after these ties and bonds.

Sorry to go offtopic but a lI just thought a little background insight was needed before jumping to conclusions. And it can be sad to see an outsider G( someone resideing outside the UAE and arabworld ) understands this better.


thnx for the background..n i don't dispute tht..
the real issue is tht the international financial community doesn't believe in emotions.. i'm sure you do understand the meaning of a govt backed entity defaulting on its financial commitments and its rating downgraded to junk... this has huge implications...
when till 15 days back, dubai was telling all the intl. financial committee not to worry.. n suddenly defaults on its commitment then this creates a crdibility issue.. dubai is higlhy globalized and can not afford to loose its credibility,.. if it has to evoke confidence amongst investors, it has to be more transparent abt its finances.. the "Flight to Safety" of capital can create serious issues for any country.. doesn't matter who is backing it...

i've got stakes involved in dubai's stability.. but the signs are worrisome.. so just trying to be on the top of situation. thts all
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Re: Dubai State of Affairs Nov 26, 2009
Oh yeah no doubt it will be impacted no doubt about it, but it will not sink and maybe what G says would be true that then the central govt would have more clout on what does and what does not happen
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Re: Dubai State of Affairs Nov 26, 2009
xdude wrote:this is insane..the CDS spreads are quoting above tht of Iceland in 2008.. tht means the traders eventually expect dubai to default..
the debt standstill announcement coming after dubai markets close down for holidays makes it even more difficult.. the world would have preffered tht the govt officials announcing it during the day n standing in front of the investors to assure them


I can tell you upfront that the Dubai stock market will experience a selloff when they open again after EID holiday. And this probably won't go unnoticed in other markets too.

Just imagine if nearly $60 billion dollars are at risk with the largest financial institutions in the world, already in mayhem to keep increase their reserve levels. A huge liability and impact on a banks balance sheet. You can bet on that.

Peter Cooper, founder of AME Info just wrote an article on Seeking Alpha that this default (as it is seen in the investment community) will lead to greater risk awareness in emerging market economies and he advices everyone to get out of stock markets altogether (worldwide) as this huge default could have a disastrous ripple effect.

Remember, emerging markets were funded by the big banks in developed economies like Europe, Pacific and the U.S.. And those banks are already in trouble bigtime, hiding most of their losses from the investor community by so called 'Mark-to-Fantasy' accounting standards. Think about the effects of this hit on their balance sheets. This could be another selloff and near collapse of the fractional reserve banking industry.

...holding my breath for a few weeks... :albino:
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Re: Dubai State of Affairs Nov 26, 2009
does not surprise me, many here before said Dubai would never meet its commitments, against the sarcasms of Sage and everybody else, and of course the announcement, yesterday, was made after close of business on the eve of the Eid holiday, so now no-one's available for comment hiding like cowards. And in 6 months it s going to be even worst, they still won't be able to pay their debt. Tough time huh Sage, where are you, burrying your head in the sands? Should they go to prison like those you bloat about, who are behind their credit cards or car payments.
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Dubai debt problems Nov 26, 2009
European shares have been hit by concerns over Dubai's financial health, after a government-owned company asked for an extension on repaying its debts.
After six years of rapid growth, the reputation of Dubai's economy is now being questioned.
Dubai World, which has total debts of $59bn (£35bn), has asked for a six-month extension on debt repayments.

It was due to repay $3.5bn next month.

The Dubai government said the request to delay debt repayments also applied to property developer Nakheel, a Dubai World subsidiary.

The request led to major credit ratings agencies downgrading a number of state-backed companies.
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Re: Dubai State of Affairs Nov 26, 2009
capsicum wrote:does not surprise me, many here before said Dubai would never meet its commitments, against the sarcasms of Sage and everybody else, and of course the announcement, yesterday, was made after close of business on the eve of the Eid holiday, so now no-one's available for comment hiding like cowards. And in 6 months it s going to be even worst, they still won't be able to pay their debt. Tough time huh Sage, where are you, burrying your head in the sands? Should they go to prison like those you bloat about, who are behind their credit cards or car payments.


I like many others work and live in Dubai, and as such I pray that the current situation is turned around to a positive solution. I also know that re-structuring of debt is a perfectly normal situation, the problem here is that their are so many people who are jealous of Dubai's progress and only dream for a collapse. I for one do not believe Dubai will collapse and if you want to criticize me for that so be it. I will however do my utmost, which may be totally insignificant, but at least I will try to remain positive.
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Re: Dubai debt problems Nov 26, 2009
This will be an ongoing problem irregardless of debt restructuring or where they are going to end up borrowing from, to pay their current creditors.

I think there is some truth with people treating it as a Dubai Inc. and Abu Dhabi Inc. scenario where the big brother with the moolah and the running business will take over the small brother's who's in debt, assets. Better sell them internally. Whoever said to marauder was a crime in the Gulf :lol:
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Re: Dubai State of Affairs Nov 27, 2009
For those who like to bash Dubai at every given opportunity try this on for size:

http://mwhodges.home.att.net/nat-debt/debt-nat-a.htm

The total debt of the USA $ 57 Trillion - - and soaring

or how about;

£2trillion - the terrifying total of our national debt... that's £33,000 for every man, woman and child in Britain

http://www.dailymail.co.uk/news/article ... itain.html
sage & onion
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Re: Dubai State of Affairs Nov 27, 2009
Amen to that sage. Trust me man I've been hearing about this waay before anyone else before. Most of the tourist specially the ones staying in glitzy hotels would just keep on saying how fast dubai would come down because it went up so fast and this was even before the property boom started. Seams like these people have been waiting for a long time like the grinch for this place to go down and even the slightest hint of it you can almost see the gleam in the eye.

I think you got it dead on when you say a lot of people are jealous dunno why though. I pray, hope and know Dubai won't go down. Amen.
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Re: Dubai State of Affairs Nov 27, 2009
sage & onion wrote:For those who like to bash Dubai at every given opportunity try this on for size:

http://mwhodges.home.att.net/nat-debt/debt-nat-a.htm

The total debt of the USA $ 57 Trillion - - and soaring

or how about;

£2trillion - the terrifying total of our national debt... that's £33,000 for every man, woman and child in Britain

http://www.dailymail.co.uk/news/article ... itain.html


Sage like I said before your not a man of many words but when you do say something it really hits the mark. 52 billion of a govt owned company is peanuts when compared to those figures. And they don't even have anyone to bail them out.
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Re: Dubai State of Affairs Nov 27, 2009
sage & onion wrote:
capsicum wrote:does not surprise me, many here before said Dubai would never meet its commitments, against the sarcasms of Sage and everybody else, and of course the announcement, yesterday, was made after close of business on the eve of the Eid holiday, so now no-one's available for comment hiding like cowards. And in 6 months it s going to be even worst, they still won't be able to pay their debt. Tough time huh Sage, where are you, burrying your head in the sands? Should they go to prison like those you bloat about, who are behind their credit cards or car payments.


I like many others work and live in Dubai, and as such I pray that the current situation is turned around to a positive solution. I also know that re-structuring of debt is a perfectly normal situation, the problem here is that their are so many people who are jealous of Dubai's progress and only dream for a collapse. I for one do not believe Dubai will collapse and if you want to criticize me for that so be it. I will however do my utmost, which may be totally insignificant, but at least I will try to remain positive.


Positive and/or delusional is one thing. It would suit you (or any other person for that matter) very well to show some realism as well. You, Sage, would be more credible this way.

Just a discretionary tip. :idea:

ps: The U.S. debt problem is one I follow and discuss in detail in the proper 'financial' fora. This is about Dubai. focus ;)
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Re: Dubai State of Affairs Nov 27, 2009
desertdudeshj wrote:Yup thats what I was thinking aswell as I did read that paticular statement and my comment was based along that line of thought.

In Arab specially beduin culture it would be a great disgrace for something like that happen. AD will support Dubai as long as it is able to do even if it gets nothing out of it.

If you guys remember the history of UAE, RAK orginally didn't join the UAE in the first year the next year the great late Shk Zayed threatened to quit as president if it didn't. Talks ensewed and RAK joined UAE. Even though RAK had nothing to offer and still didn't upto recently.

Finacially Abu Dhabi and Dubai ( before the crash ) were much better being off independant rather than under the flag of one country.

But the roots, culture and traditionruns much deeper than just money. Why do you think the wasta menatality is so rife here. It is very disrespectfull and almost impossible to ingore a request from an elder or someone who might have good ties with your tribe or family.

Law and money come second after these ties and bonds.

Sorry to go offtopic but a lI just thought a little background insight was needed before jumping to conclusions. And it can be sad to see an outsider G( someone resideing outside the UAE and arabworld ) understands this better.


Excellent point, DD! …Right on the money!!!

However, let's not forget that there are concealed rivalries and jealousies between DXB and AD which don’t come out on the surface.

Tribal rivalry, even among families of the same tribe, is well documented in the history of the Arabian Peninsula Arabs!!!

Having said that, it still doesn’t mean AD will let DXB go under! I’m sure that will not happen, as long as AD is in the money!!


8) 8)
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Re: Dubai State of Affairs Nov 27, 2009
desertdudeshj wrote:
sage & onion wrote:For those who like to bash Dubai at every given opportunity try this on for size:

http://mwhodges.home.att.net/nat-debt/debt-nat-a.htm

The total debt of the USA $ 57 Trillion - - and soaring

or how about;

£2trillion - the terrifying total of our national debt... that's £33,000 for every man, woman and child in Britain

http://www.dailymail.co.uk/news/article ... itain.html


Sage like I said before your not a man of many words but when you do say something it really hits the mark. 52 billion of a govt owned company is peanuts when compared to those figures. And they don't even have anyone to bail them out.


That in truth is the whole point;
And they don't even have anyone to bail them out.
at leat Dubai is part and parcel of the UAE, the Leader just happens to be Prime Minister of the UAE.

The UAE recorded a trade surplus of AED231 Trillion that is $62.69 Trillion.

http://www.khaleejtimes.com/darticlen.a ... n=business
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Re: Dubai State of Affairs Nov 27, 2009
Trillions or billions makes a difference of hundredthousands millions.

Focus Sage, focus :lol:
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Re: Dubai State of Affairs Nov 27, 2009
RobbyG wrote:Trillions or billions makes a difference of hundredthousands millions.

Focus Sage, focus :lol:



Sorry sir but a Trillion = one thousand Billion or 1000 x 1000 Million, that is hugely different to what you state.
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Re: Dubai State of Affairs Nov 27, 2009
sage & onion wrote:
RobbyG wrote:Trillions or billions makes a difference of hundredthousands millions.

Focus Sage, focus :lol:



Sorry sir but a Trillion = one thousand Billion or 1000 x 1000 Million, that is hugely different to what you state.


My point is that you said the UAE trade surplus is Trillions. But if you read the article you quoted correctly, the trade surplus is in billions.

My lyric was about the 'difference'. So 1,000,000,000,000 (trillion) minus 1,000,000,000 (billion) = 999,000,000,000 (hundredthousands of millions) ;)
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Re: Dubai State of Affairs Nov 27, 2009
sage & onion wrote:For those who like to bash Dubai at every given opportunity try this on for size:

http://mwhodges.home.att.net/nat-debt/debt-nat-a.htm

The total debt of the USA $ 57 Trillion - - and soaring

or how about;

£2trillion - the terrifying total of our national debt... that's £33,000 for every man, woman and child in Britain

http://www.dailymail.co.uk/news/article ... itain.html


Sage, for you it s ok to jail somebody who missed 2 cars payments, but you think it s normal that Dubai can get away asking investors 6 months delay.
Regarding the US debt, the difference with Dubai , is that the US repay its debts, not Dubai. The US does not jail debtors either, the UAE does. In the end, you can call it restructuration, or whatever, the fact is the UAE cannot be trusted, you can only be screwed, and people should avoid this place.
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Re: Dubai State of Affairs Nov 27, 2009
capsicum wrote:
sage & onion wrote:For those who like to bash Dubai at every given opportunity try this on for size:

http://mwhodges.home.att.net/nat-debt/debt-nat-a.htm

The total debt of the USA $ 57 Trillion - - and soaring

or how about;

£2trillion - the terrifying total of our national debt... that's £33,000 for every man, woman and child in Britain

http://www.dailymail.co.uk/news/article ... itain.html


Sage, for you it s ok to jail somebody who missed 2 cars payments, but you think it s normal that Dubai can get away asking investors 6 months delay.
Regarding the US debt, the difference with Dubai , is that the US repay its debts, not Dubai. The US does not jail debtors either, the UAE does. In the end, you can call it restructuration, or whatever, the fact is the UAE cannot be trusted, you can only be screwed, and people should avoid this place.


You have a very valid point there about jailing debtors. Sage should wake up for a second or remain a hypocrite (undeniably so).

I should correct you about the debt of the USA. They will and can never pay it back to its creditors. On the current foot of affairs, thats impossible and they will try to inflate their way out of debt, because they have the worlds first fiat currency. The dollar IOU.

I think gold is the real store of value. Its gaining momentum and unlike its critics, it is justified from a historical perspective. I would recommend people to read Niall Ferguson's book - The Ascent of Money.
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