Dubai disinformation spins to the top of Yahoo news

[mia]

Dubai World's debt freeze 'carefully planned'

DUBAI, United Arab Emirates – A top Dubai finance official said the emirate fully expected fallout from its debt problems and assured foreign creditors that Dubai World's request to postpone payment on some of its $60 billion in debt was "carefully planned."

...Sheik Ahmed, who is also a member of Dubai's ruling family and serves as the chairman of the Emirates airline, said claims that Dubai overreached during the good times were unjustified.

Ahmed said the unprecedented growth over the past decade "helped lay the foundation for what is now a broad-based sustainable economy."

"The economic fundamentals, such as our highly developed infrastructure ...will ensure Dubai remains an attractive regional market," Ahmed said.


http://news.yahoo.com/s/ap/20091127/ap_on_re_mi_ea/ml_dubai_debt

[Bobbieo]

1. I would like to see the whole fucking area sunk underwater from climate change

particularly those man made islands.

[mia]

4. "The World has been cancelled. It doesn't even look like the world.

...Basically there is one island that is maintained that is said to be owned by the Sheikh and the rest looks like a pile of muck," said one local property agent."


http://www.independent.ie/world-news/middle-east/extravagant-dubai-island-project-sinks-under-weight-of-the-credit-crunch-1884856.html

[Altoid_Cyclist]

10. Link to another Independent article:

I was just talking about this with my RW BIL yesterday. He thinks that Dubai is the greatest place on Earth and didn't want to hear that there might be a negative point of view on their "success".


Long read, but worth it if you have time. A fellow DU'er posted this link earlier this year.


http://www.independent.co.uk/opinion/commentators/johann-hari/the-dark-side-of-dubai-1664368.html

[enid602]

2. Where did the money go?

It´s hard to pay your national debt when you pay foreign laborers so lavishly.

[Kaleva]

11. Some of whom make over a 100k a year.

[tabasco]

3. "Ruling family"

Fuck that shit.

[HamdenRice]

5. This doesn't seem to be "Dubai's debt" -- "sovereign debt" -- but a developer's debt

As it reads in the Independent, a developer built this project -- a developer named Dubai World.

It's obvious from the propaganda about this project that has been all over tv the last few years that a major investor was the sovereign investment fund of Dubai and other Gulf states, but unless they guaranteed the debt, it's still just a developer's debt.

From what I've read, I don't think Dubai is in a net debt position globally.

[Cessna Invesco Palin]

6. Technically speaking, Dubai World is just the investment arm of the Dubai government.

It's hardly an independent business.

[AllentownJake]

7. It is an arm of the ruling family which is the government

Trying to divide a Kings Debt vs. his countries debt is a little ridiculous.

The markets are going crazy not because of the default per se. They are going crazy because this arm of the royal family may have to go out and sell assets. In 2008, Dubai bought a 7 billion dollar stake in Citigroup for instance. So if you are a Citigroup shareholder you are worried that a large number of shares are about to be dumped onto the market in order to pay other debts.

In addition, any other debt Dubai wants to finance will now require collateral or higher interest rates, translation debt is more at risk. Dubai may look at their portfolio and start dumping offshore assets.

Lastly everyone is now looking at other nations financial positions. The Greek market tanked on this news because Greece is viewed as a risk.

[HamdenRice]

14. Sovereign Debt is not "King's debt"

It is the debt of any national government, or "sovereign" of a country. For example, US treasuries are considered the "sovereign debt" of the US

[AllentownJake]

15. Not disagreeing with you

But last time I checked Barack Obama doesn't have a personal investing arm using government finances, and when he leaves office he is either replaced by Joe Biden or an election not one of his children.

[FarCenter]

12. The creditors expected Abu Dhabi to stand behind the debt

However, it appears that isn't going to be true.

In which case, the debt is only supported by the real estate developements and Dubai's assets around the world, e.g. their investment in Citigroup, real estate in London, ports around the world, etc.

Lots of these are down 50% or more.

The real estate investments in Dubai itself will probably be an even bigger bust.

And Dubai does not have any significant oil or gas income. That's the other sheikdoms in the UAE.

[asjr]

8. I have seen pictures of the lavish tall buildings

that have been erected there and wonder who or what on earth occupies them.

[Canuckistanian]

9. Sounds like Sheikh Ahmed is having a "McCain moment"

"The fundamentals of the economy are sound"

[tjwash]

13. "unprecedented growth over the past decade"

Amazing how they grew and the US and European economies shrank is it not? Almost like money was being siphoned off and used over there by corrupt individuals or something. Dubai is the Switzerland of the ME. They launder all of the money from the region (**cough** missing billions from Iraq **cough**), both legal and illegal and have tons of secret bank accounts.