Dubai Is Nuts!!!!

[molly bloom]

Originally posted by Oerdin
the vague rubbish you posted above.

That would appear to be your kind of post.

After all, you completely ignored any Arab civilization or state prior to 700 a.d. .

So the Nabataean Arabs and Petra is 'vague' is it ?

The Marib dam is 'vague' ?

Palmyra and Zenobia 'vague' ?

The Ghassanid and Lakhmid kingdoms 'vague'...

The Arab kingdom of Edessa 'vague' I suppose.

Harran 'vague' too.

I don't quite get how naming specific Arab rulers and states and cities and structures, and posting images of dams that existed prior to 700 a.d. is 'vague', but feel free to enlighten me, why don't you.

the Arabs simply are not the fountain of all knowledge which some people here are attempting to make them out to be

I've never said or implied they were. In fact, I've been quite specific. But do you seriously imagine that scientific discoveries occur in cultural vacuums?

Because they don't.

The Arabs didn't simply use Hindu numerals or Greek logic or Persian astronomy- they understood and embellished upon them.

Let's see if I can make a list of Arab (non-Persian) accomplishments. I'll get back to you.

[bumfister]

Well, the party was going to end sooner or later. The rampant construction and over development was fueled by a real estate bubble where the rulers of Dubai thought there would always be more people to buy new luxury apartments, to stay in expensive hotels, or rent massive amounts of commercial real estate but it turns out that wasn't true. I know, gee, go figure.

Now the bubble has popped and real estate prices have crashed down 40% of what they were just one year ago and the government of Dubai, which had leveraged itself to the hilt, finds it is suddenly out of cash and can't service the massive debt it rang up building all these high rises and artificial islands. Dubai has officially asked creditors for a stay of payments and to negotiate reductions in principle due to its inability to pay debts. It seems the party is over.

What spoiled the party in Dubai?

By Ben Thompson
BBC Middle East business reporter, Dubai

This time last year, Dubai was making headlines for entirely different reasons.

It was the opening party of the Atlantis hotel, the star attraction of the city's man-made palm-shaped island. Organisers spent millions on the fireworks and even more on the celebrities.

As the sky exploded overhead, broadcast live around the globe, it was Dubai's message to the world that it had arrived.

But as Dubai's elite sipped their champagne, the financial crisis was already beginning to take its toll in the West. For Dubai, this was the last night of extravagance before the credit crunch came knocking.

And so, 12 months on, the headlines are very different. But who spoiled the party, and how?

Perfect storm

Living in Dubai, as I have for the last two years, it seems everyone has a different theory.
“ Now they've acknowledged the debt, they can actually do something about it ”
Dubai businessman

Some say it was the perfect storm: a property bubble waiting to burst, with prices rising by the day, fuelled by rampant speculation.

Built on and bought with borrowed money.

No-one asked how, or even if, you could afford to pay it back. Caught up in the euphoria, credit checks and responsible lending could wait. Local media confidently predicted the Middle East was immune.

"Dubai Safe from the Storm" read one headline. Just how wrong it proved to be.

Others suggest the problem was and still is, a lack of transparency.

Mixed messages

Government and business dealings here are done behind closed doors.

Appointments to influential government or corporate positions are more about connections than qualifications.

And with few official statistics to reassure investors, rumour and speculation has filled in the gaps instead.

That's been one of Dubai's biggest problems.

The city took a battering from the international media but rather than fighting back with facts, Dubai opted instead to send the PR machine into overdrive.

'Dubai bounces back' screamed the local newspapers, right next to their foreign counterparts offering the altogether more sobering 'Goodbye Dubai'. With such mixed messages it's no wonder local and international investors have found Dubai so difficult.

So just how worried are people here by the announcement from Dubai World?

On the face of it, not very. It changes little for people's day-to-day lives. Given that it's currently the holiday of Eid, Dubai's notoriously congested roads are calm and quiet.

That is, perhaps, why the government chose this week to make the announcement.

It gives residents and businesses here time to digest the news and work out what it means.

The global impact hasn't gone unnoticed, but look around at the number of people enjoying the sunshine on the beach, and it seems those worries can wait.

Worst has passed?

There's also still the feeling that the worst has now passed.

For those who survived the summer, marked by widescale job losses and falling property prices, there is of course relief.

Those that do remain are willing Dubai to succeed, because for many, the thought that the Dubai dream might be over, is too difficult to bear.

In Dubai's financial community however, the reaction has been altogether more muted.

Partly because many businesses are closed for the holidays, but partly because they knew much of this already.

It was no secret that Dubai was heavily in debt, nor that it was struggling to pay back the money. This week's request to delay the repayment, was simply official confirmation of what was already on the cards.

And to some, the idea that Dubai is 'coming clean' about its debts in this way is a big step forward.

"Now they've acknowledged the debt, they can actually do something about it," says one local businessman.

"Before they were in denial, this is what everyone needed to hear."

Abu Dhabi

But the remaining unanswered question is whether neighbouring Abu Dhabi will come to the rescue.

The oil-rich emirate certainly has the cash but it's already bailed out Dubai to the tune of $10bn. It might be wondering where that money went.

WHAT IS DUBAI WORLD?
# The emirate's flag bearer in global investments
# Has a central role in the direction of Dubai's economy
# Assets include DP World, which caused a storm when trying to take over six US ports
# Property arm Nakheel built the Palm Island and The World developments

Much has been made of the relations between the two city states, both here and abroad. They share much in common, not least the family connection of the two rulers.

But Dubai is the wild child of the two.

It stole the headlines, racked up the debts and has now come cap in hand for a bail-out. It seems it's not quite ready to forgive and forget.

Without real evidence, speculation is already mounting here about its possible motives.

Abu Dhabi could be forcing Dubai to sweat it out.

To put its own affairs in order before throwing more cash at the problem. Altogether more troubling would be that Abu Dhabi needs the cash itself.

Those scenarios are likely to mean short-term pain for Dubai, and in particular its international reputation. But in the longer term it puts Dubai on a more solid footing.

Last year's party was all about telling the world that Dubai had been born.

Now, by putting its financial affairs in order, it's about telling the world that its finally grown up.

http://news.bbc.co.uk/2/hi/business/8382935.stm

[bumfister]

Dubai needs time to repay debts

Dubai's financial health has come under scrutiny after a major, government-owned investment company asked for a six-month delay on repaying its debts.

Dubai World, which has total debts of $59bn (£35bn), is asking creditors if it can postpone its forthcoming payments until May next year.

Dubai World has also appointed global accountancy group Deloitte to help with its financial restructuring.

The company has been hit hard by the global credit crunch and recession.

It was due to repay $3.5bn of its debts next month.
“ Put simply, everyone in the markets thought that, in the end, the federal government in Abu Dhabi would stand by all of Dubai's bad bets. Apparently, they won't. ”
Stephanie Flanders, BBC economics editor

The request for a delay in repayments led to major credit ratings agencies downgrading a number of state-backed companies.

Following six years of rapid growth, the Dubai economy has slumped since the second half of 2008.

This has led to Dubai property prices falling sharply.

'Shocking'

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

ANALYSIS
Ben Thompson, business reporter, Dubai

Financial markets and businesses are closed here for the Eid holiday - some suggest that's why the announcement was made when it was.

It's sparked real shock that things have come to this. Just 12 months ago, few could have believed the city would find itself asking for this lifeline. It seems Dubai is now paying the price for living on borrowed money.

Of course, everyone knew the boom couldn't last forever, but no-one expected it to collapse when, or as suddenly, as it did. Property prices have more than halved over the past year and investors have fled.

The official figure for Dubai's debt is $80bn, but talk to anyone here and the feeling is the figure is much higher. Unpaid bills, abandoned cars and empty buildings are all too obvious. Some analysts put the real figure at close to $160bn.

"It's shocking because for the past few months the news coming out has given investors comfort that Dubai would most probably be able to meet its debt obligations," said analyst Shakeel Sarwar, of SICO Investment Bank.

Dubai is one of the seven self-governing emirates or states that make up the United Arab Emirates.

Analysts say the Dubai government has paid the price for a flamboyant economic model centred on foreign capital and giant construction projects.

Questions are now being raised about Dubai's ability to repay its debts, said the BBC's Middle East correspondent Jeremy Howell.

Some have speculated it is likely to turn to the more economically conservative Abu Dhabi emirate to bail it out.

Global credit rating agency Standard & Poor's, which rules on a company's or government's ability to repay its debts, said the announcement "may be considered a [debt] default".

Our correspondent said: "Standard & Poor's and Moodys immediately downgraded all six state-backed corporations in Dubai, downgrading some to junk status."

Junk is the term commonly used to describe bonds that are rated below investment grade by ratings agencies.

The Dubai World announcement was made on the eve of the Eid al-Adha Muslim festival, which will see many government agencies and companies close in Dubai until 6 December.

http://news.bbc.co.uk/2/hi/business/8380105.stm

[bumfister]

Dubai's debt problems are spilling over into the rest of the world now with US & European stocks falling on news of Dubai's financial problems. Currently Dubai owes EU based banks $40 billion which it says it currently can't pay back on time plus it owes a similar amount if not more to US banks. Risky lending comes back to bite bankers again.

[a.kitman]

necro much?

[bumfister]

I searched for Dubai and this thread came up. It seemed better to use an existing thread then to start a new one.

[Drake Tungsten]

I approve of this Thanksgiving thread necromancy. Let us all give thanks that Lord of the Mark and molly bloom no longer post here.

[bumfister]

Dubai is now asking the other emirates in the UAE for a bailout but they don't seem keen on the idea.

http://www.google.com/hostednews/ap/article/ALeqM5jgIwsGJtixo-F6a2j5e8hebIbaEwD9C8SL780

[bumfister]

The guy is way over the top but he makes a few interesting points. I'd just take it with a grain of salt.

[bumfister]

http://www.guardian.co.uk/world/video/2009/feb/13/dubai-troubles