[dorlomin]

Id guess the AIG cash machine will be having to pay out for all the CDS's this will trigger.

[Gerben]

$this->bbcode_second_pass_quote('kpeavey', 'I') would suggest that the ruling family does not subscribe to the notion of Peak Oil. Dubai is a McMansion on a national scale. At least when the crash comes they will have some really nice ghetto housing-until it is reclaimed by the sea.

[eXpat]

More consequences, another straw in the camel's back...
India Studying Impact of Dubai’s Debt Delay Plan
$this->bbcode_second_pass_quote('', ' ')Nov. 28 (Bloomberg) -- India, the world’s top recipient of migrant remittances, is examining the effect Dubai’s attempt to delay debt repayments may have on Asia’s third-largest economy, central bank Governor Duvvuri Subbarao said.

About 4.5 million Indians live and work in the Gulf region and remit more than $10 billion annually, according to government data. The turmoil may affect remittances, said Thomas Issac, finance minister of the southern state of Kerala, which accounted for about a quarter India’s migrant labor in 2005.

Dubai World, the emirate’s investment company, roiled markets as it sought a “standstill” agreement to delay repayment on much of its $59 billion of debt. Dubai suffered the world’s steepest property slump in the global recession, with home prices dropping 50 percent from their 2008 peak, according to Deutsche Bank AG. Most Indian migrant workers are employed in the Gulf’s construction industry, according to the government.

“It’s quite likely that Dubai will face a severe downturn in the real estate and financial sectors and that will affect remittances and jobs,” Issac said in an interview at his office in Thiruvananthapuram yesterday.

Remittances from the Middle East account for about 25 percent of Kerala’s economy, Issac said. India received $52 billion of remittances last year, according to the World Bank, making it the world’s largest recipient of money from migrant workers. China got $49 billion.

[Sixstrings]

$this->bbcode_second_pass_quote('GASMON', '[')b]Abu Dhabi to 'assist' Dubai World

Abu Dhabi is moving to bail out on a selective basis the state-owned Dubai World, whose debt default led to a sharp drop in global markets, a senior official has said.

The unnamed official told news agencies on Saturday that the United Arab Emirates' wealthy capital would "pick and choose" how to assist its debt-laden neighbour.

http://english.aljazeera.net/business/2 ... 44499.html

Gasmon

[deMolay]

These guys still own ports in Canada and maybe the USA. http://www.cbc.ca/world/story/2009/11/2 ... world.html

[Voice_du_More]

What's 60 billion among friends?

I think that the PTB will be able to cover this thing over pretty effectively and in the process keep the cancer hidden for a little while longer. The extent of it I mean. Every know there is an illness but we are all willing to believe that a little chemo will do the trick. It is only if the fact that 90% of the debt in the whole world is in danger of being devalued that someone finally steps back and honestly assesses if their name is in the will.

Above all else they do not want all those Americans who have been stock piling ammo to think the time has come to fend for themselves.

It cometh! The day of your reckoning is here America! You would not consent to being Christian in anything but name, so the fruit of your unrighteousness is ripened and your destruction comes upon you suddenly.

[dorlomin]

A breathtaking blunder in Dubai

$this->bbcode_second_pass_quote('', 'D')ubai’s action looks like either a serious misjudgment or, more likely, a breathtaking cock-up.

[Kristjan]

$this->bbcode_second_pass_quote('', 'J')ust think, it was only a couple of years back that Dubai was forcing DP World – the ports operator that remains one of the good bits of Dubai World – to list on its local stock market. No one was much interested in trading the shares there even then, preferring more transparent climes.

[Kristjan]

DUBAI – LOW RISK OF EMERGING MARKET CONTAGION
$this->bbcode_second_pass_quote('', '1'). The Dubai default is sui generis. The majority of countries in the Persian Gulf have oil and gas and lots of dollars. They can afford their extravagances, none of which on a per capita basis are likely to come close to Dubai’s. Kuwait, Saudi Arabia, Iran, Qatar, Abu Dhabi, Iraq (technically not on the Persian Gulf) – that’s where so much of the world’s energy is buried. Bahrain (population 1.05 million) and Oman (population 2.6 million) have oil and gas but are underendowed energy-wise relative to their neighbors. But both have been run in far more conservative manner than Dubai.
2. Bank losses from the crisis beginning in 2007 reportedly exceed three trillion US dollars. Lehman Brothers alone accounted for $613 billion in liabilities. The Dubai debacle is minor by this standard even if it turns out the number is more like $100 billion rather than $60 billion. Dubai will not become Demon Brothers.
5. The UAE is an important ally of the United States and is the location of an American military base. Just ninety short miles across the Gulf and you are in Iran. It is in America’s interest to make sure this Dubai debt debacle has a reasonably happy ending.

[eXpat]

Well, we have the elite taking charge...
Rothschild appointed to help sell Dubai World assets
$this->bbcode_second_pass_quote('', 'B')ankers from Rothschild have been appointed to help restructure Dubai World with a mandate to dispose of some of the stricken conglomerate's famous assets.
Paul Reynolds, head of Rothschild's advisory operations in the Middle East, was this week asked to work for the Dubai government's chief restructuring officer alongside Aidan Birkett of Deloitte, who was appointed on Wednesday.

The team is tasked with assessing the group's assets, which is likely to result in a large scale sell-off of assets as varied as the QE2 cruise liner; Turnberry, the golf course that hosted this year's Open Championship; and a raft of properties.
A spokesman for the Dubai department of finance confirmed that all options and asset sales would be considered, except for the DP World subsidiary that bought P&O, the British ports company. "I'm sure all of the assets of Dubai World will be reviewed," he said. "The QE2 is one of them. It's part of the restructuring process, though it's too early to say whether there's any sale in mind."
...
Rothschild was one of five banks working in recent months to help Dubai World meet its debt obligations. Deutsche Bank was the other lead adviser and they were supported by Citibank, JP Morgan and the Dubai Islamic Bank. When the standstill decision was taken on Wednesday, all the banks were stood down as the mandate had changed.

[Kristjan]

I guess that's a good thing. Rothschild is a professional company and it is one of the best in the world when it comes to restructuring and mergers. Apparently either the creditors or Abu Dhabi have forced Dubai into seeking professional help. Dubai World is a far cry from professionalism, considering all the planning that went into the announcement and all...

[eXpat]

$this->bbcode_second_pass_quote('Sixstrings', 'T')his may not be bad for the US:

$this->bbcode_second_pass_quote('', 'N')ov. 27 (Bloomberg) -- Treasuries rose, heading for a third weekly gain, after a Dubai proposal to delay debt payments set off a slide in stocks and riskier assets worldwide.

Ten-year Treasury yields were near the lowest level in seven weeks as European stocks dropped the most in seven months.

“The Dubai issue has caused a flight to quality move, which is positive for Treasuries,” said Hiromasa Nakamura, a Tokyo-based senior investor at Mizuho Asset Management Co.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aRwT_2dPP8Y0&pos=4

[dorlomin]

http://www.theoildrum.com/node/6000

Interesting discussion over on the oil drum. Lots to chew over, especialy the point that the sovereign debt is only a small part of the money that flowed into Dubai. Abu Dabi can guarentor the $22 billion needed to stablise things now but as the hot money flows begin to surge in seeking safety we may see an unwinding of the current dollar carry trade, an increase in dollar value and a drop in appatite for risky debts. Contrary to what many here would think of as sense we are already seeing near negative rates on short term t bills which shows people will still shore up in dollars for safety.

It may be a couple of months before the full impact of Dubais forcing a reassesment over risky foreign debt really comes home to roost.

[eXpat]

Another interesting day in the Dubai affair
Dubai debt crisis: Now British banks face fresh crisis after investing billions$this->bbcode_second_pass_quote('', ' ') * Barclays, RBS and HSBC face losing billions
* Wall Street plummets by 2 per cent after late opening
* FTSE falls by 1.5 per cent before stabilising
* Banks see £14billion wiped off market value in one day
* Dubai may consider selling QE2 to tackle debt

British banks were teetering on the brink of a fresh meltdown today after it emerged they had invested heavily in crisis-hit Dubai.

An $80billion debt default in the emirate has already reawakened the spectre of a global 'double dip' - that the first shoots of recovery could be wiped out by a second wave of recession.

But the level of exposure that the crippled British banking sector faces is now under renewed scrutiny.

The crisis was prompted by Dubai World, the development company behind three palm shaped islands as well as an off-shore replica of the globe , defaulting on its debt.

Today it emerged that:
* Royal Bank of Scotland (RBS) was Dubai World's biggest loan arranger since January 2007, according to JP Morgan
* HSBC has an estimated £9.6billion in loans and advances to UAE customers
* Barclays has an exposure of around £3billion
The figures are particularly alarming as the sector has had to be bailed-out by the tax payer on a number of occasions over the last year-and-a-half

Earlier this month, RBS and Lloyds Banking group received another £50billion to keep them afloat

RBS - which has received the biggest state rescue anywhere in the world - is now effectively owned by the taxpayer.

[eXpat]

How Citigroup lent $8 billion to Dubai from TARP founds
$this->bbcode_second_pass_quote('', 'T')hat had to be what Citigroup, with its firsthand expertise with bailouts, must have been thinking when it lent $8 billion to Dubai last year. Oh, and here’s an interesting fact: Citigroup made the loan to Dubai on Dec. 14, 2008. Take a look at the calendar — that’s after it received tens of billions in TARP funds. Citigroup’s chairman, Win Bischoff, said at the time, “This is in line with our commitment to the U.A.E. market in general, and reflects our positive outlook on Dubai in particular.” Good call. And what became of all those Shariah-compliant financial instruments that were the hot topic of that panel I attended? It turns out that many of them that were sold prior to the crisis weren’t compliant at all.

[dorlomin]

$this->bbcode_second_pass_quote('eXpat', '
')http://dealbook.blogs.nytimes.com/2009/12/01/a-financial-mirage-in-the-desert/?partner=yahoofinance

[eXpat]

$this->bbcode_second_pass_quote('dorlomin', '
')An interesting story is emerging from Greece, but Ill start a new thread for that.

[dorlomin]

$this->bbcode_second_pass_quote('eXpat', '')$this->bbcode_second_pass_quote('dorlomin', '
')An interesting story is emerging from Greece, but Ill start a new thread for that.

[eXpat]

This is not going to help to pay those loans in 6 months.
S&P cuts Dubai company ratings
$this->bbcode_second_pass_quote('', 'C')AIRO — International ratings agency Standard & Poor's says it has cut the ratings of six Dubai government-backed entities to junk status amid worries about the emirate's willingness to back its indebted companies.

S&P said in a statement Thursday that the downgrades reflect its view that the Dubai, while committed to backing its government-backed companies, "does not consider (their) credit standing or financial obligations as its priority responsibilities."

The moves come as Dubai World, the emirate's biggest conglomerate, is looking to restructure roughly $26 billion of its $60 billion in debt.

The news has sparked fears that heavily indebted Dubai could default on its debt obligations, estimated to be as high as $100 billion.