Dubai Defaults (4 Viewers)

[Bjerknes]

Nov. 26 (Bloomberg) -- Dubai shook investor confidence across the Persian Gulf after its proposal to delay debt payments risked triggering the biggest sovereign default since Argentina in 2001.

The cost of protecting government notes from Abu Dhabi to Bahrain rose, extending the steepest increase since February as Dubai World, with $59 billion of liabilities, sought a “standstill” agreement from creditors. Its debt includes $3.52 billion of bonds due Dec. 14 from property unit Nakheel PJSC. Dubai credit-default swaps climbed 90 basis points to 530 after yesterday increasing the most since they began trading in January, CMA Datavision prices showed.

“There is nothing investors dislike more than this kind of event,” said Norval Loftus, the head of convertible bonds and Islamic debt at Matrix Group Ltd. in London, which manages $2.5 billion of assets including Dubai credits. “The worst-case scenario will of course be involuntary restructuring on the Nakheel security that brings into question the entire nature of the sovereign support for various borrowers in the region.”

Full article:

http://www.bloomberg.com/apps/news?pid=20601087&sid=azd17alFNikQ&pos=2

:scarf:

Time to get a real economy, jackasses.

 

Buy on AliExpress.com

[IrishZebra]

I have no sympathy for the morons that didn't see this coming

 

[Martin]

I have no sympathy for the morons that didn't see this coming

I didn't

 

[JCK]

I was there last week and I can tell you, this country is extremely ridiculous and everyone saw this coming. And that's just the start.

 

[Osman]

The tyrannical mofos deserve it.

 

[IrishZebra]

I didn't

Martin Didn't see soemthing coming....I don't follow.

 

[Martin]

Martin Didn't see soemthing coming....I don't follow.

I'm not the one they call gee oh dee

 

[Ahmed]

can someone explain this in English please...

 

[Alen]

I'm not familiar with the situation. I only have the basic knowledge about Dubai.
Anyone willing to spent some time giving me an answer what's really happening because I'm not smart enough to understand Andy's post?

 

[Alen]

can someone explain this in English please...

At least I wasn't the only one who didn't understand that

 

[Osman]

I dont understand it much either, but any economy that functions on basically slave labour deserves to go bust

 

[IrishZebra]

I'm not the one they call gee oh dee

Cultural gap here...

 

[Enron]

I'm not familiar with the situation. I only have the basic knowledge about Dubai.
Anyone willing to spent some time giving me an answer what's really happening because I'm not smart enough to understand Andy's post?

Dubai doesn't have anything real, such as resources, to back up the amount of money they have in their economy. It's all based on foreign investment.

 

[Bjerknes]

Well, you can't drink or eat oil in the desert. So good luck to the folks that are going to be stranded there.

The Dubai phony economy was always going to implode. You cannot build an economy based on one natural resource that fluctuates in price and will eventually run out. Dubai is/was nothing but a huge exchange of oil money going from one hand to the other, sprinkled with a huge real estate bubble.

That's why I'm very worried about the US, too. We have had a phony credit and consumer spending service economy for decades now, which has to crumble. The funny thing about Dubai is that they never had a real economy -- all they did was went straight to a Ponzi oil economy, surpassing actual production of goods to just being a real estate speculator's dream.

So I have no sympathy for the clowns that are stuck with million dollar properties there now, nor the Sheiks or whomever who baited poor foreigners into working shitty jobs to get somewhere.

I've always said, instead of bombing Iraq, get the poor people out of there and test those new Raytheon and Northrop bombs on Dubai. Talk about a nice shock and awe, nothing is better than seeing overpriced real estate and their foolish speculators go up in flames.

 

[Azzurri7]

When you got everything artificial, then it's only about time you expect this.

 

[Martin]

I'm not familiar with the situation. I only have the basic knowledge about Dubai.
Anyone willing to spent some time giving me an answer what's really happening because I'm not smart enough to understand Andy's post?

I didn't get any of it either. But then I never get anything when he goes into finance talk so it didn't bother me.

 

[Enron]

When you got everything artificial, then it's only about time you expect this.

Exactly.

 

[IrishZebra]

The poor poor Dubai Leaders, they thought that FDI is a substitute for moving from a transitional economy to a services based one without having any in-demand services to speak-off.

 

[Bjerknes]

can someone explain this in English please...

I'm not familiar with the situation. I only have the basic knowledge about Dubai.
Anyone willing to spent some time giving me an answer what's really happening because I'm not smart enough to understand Andy's post?

Look at it this way. Both of you guys partnered up to sell Juventus tickets. You stocked up on them years in advance, and made a decent profit selling them to unsuspecting foreigners, all the while you built up several palaces for yourselves and for others to speculate on. But then, Calciopoli hit. The prices of those tickets you were holding fell through the floor, and now you're holding paper that is basically worthless. So now you have zero money coming in, but the folks that built your palaces are demanding their money. You don't have it, so you delay paying them.

It's actually much more complicated than this in the case of Dubai, but this will suffice. Essentially the place is broke and can't pay people.

 

[IrishZebra]

And it is fair that it has happened, don't forget that.