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**grapejelly** · November 27, 2009, 06:59 AM

Re: Dubai default !!!!!!!

Every country will default. Every government. Every currency will crash and become worthless. There is no way that today's promises and IOUs, which are what "money" is, will be able to be kept. Governments make promises to stay in power and increase their power. Defaults are moved to the next fiscal year where hopefully a new political bunch will kick the can a bit further down the street.

This has to end and it will end in total default. That is 100% guaranteed.

**Chris** · November 27, 2009, 08:06 AM

Re: Dubai default !!!!!!!

No way. Like the US after world war two, one nation will be left with all the toys. Of course we had to go through a world war to find the winner last time. Hopefully it will be "different this time". Ha!

Originally posted by grapejelly View Post

Every country will default. Every government. Every currency will crash and become worthless. There is no way that today's promises and IOUs, which are what "money" is, will be able to be kept. Governments make promises to stay in power and increase their power. Defaults are moved to the next fiscal year where hopefully a new political bunch will kick the can a bit further down the street.

This has to end and it will end in total default. That is 100% guaranteed.

**samy** · November 27, 2009, 08:11 AM

Re: Dubai default !!!!!!!

Originally posted by hayekvindicated View Post

During the Lehman panic, the Dollar staged a very impressive rally. This time, the Dollar is sliding even when people are trying to de-leverage. I wonder if this marks an interesting turning point in the long term decline of the Dollar.

i think this is a trial run by big boys to give a jolt to gold and try to imply that dollar is still the safe heaven (if so let them play till their last breath) each grain of gold has seen many such guys in its history.
this is what they intend to say-
http://www.reuters.com/article/busin...siness+News%29

**D-Mack** · November 27, 2009, 09:33 AM

Re: Dubai default !!!!!!!

If Nakheel has problems, what will happen to the Nakheel Tower?
http://en.wikipedia.org/wiki/Nakheel_Tower

http://www.stumbleupon.com/s/#1egEOJ...r-harbor.html/

**Slimprofits** · November 27, 2009, 10:27 AM

Re: Dubai default !!!!!!!

It's not like this happened in secret, it's that most of us didn't notice. By the way, that includes me. Here's a timeline of mainstream media coverage:

Nakheel debt triggers Islamic bond concerns
November 12, 2009 8:43AM

CORRECTED-TIMELINE-Defaults: Islamic finance
Sun Nov 8, 2009 6:49am EST

Moody's downgrades 5 Dubai state-linked entities
Wed Nov 4, 2009 6:35am EST

Debt Watch in Dubai
October 22, 2009, 5:00PM EST

etc.

**WildspitzE** · November 27, 2009, 10:36 AM

Re: Dubai default !!!!!!!

Dubai debt move 'carefully planned': top official
[whole blurb below]

'"Dubai's move to suspend payments on its Dubai World conglomerate's debt was "carefully planned" and done in full knowledge of how the markets would react, the chairman of the Supreme Fiscal Committee said on Thursday.
"Our intervention in Dubai World was carefully planned and reflects its specific financial position," Sheikh Ahmed bin Saeed al-Maktoum said in a statement.

"The government is spearheading the restructuring of this commercial operation in the full knowledge of how the markets would react. We understand the concerns of the market and the creditors in particular.

"However we have had to intervene because of the need to take decisive action to address its particular debt burden."

However, Sheikh Ahmed insisted that "unprecedented growth, in Dubai and across the (United Arab Emirates), over the past decade has helped lay the foundation for what is now a broad-based sustainable economy beyond just natural resources."'

http://www.breitbart.com/article.php...show_article=1

Care to guess who had shorts out to help ameliorate the losses and/or amount due?

**cjppjc** · November 27, 2009, 11:09 AM

Re: Dubai default !!!!!!!

What's the big deal. They are just going to raise the needed cash from new bond sales.

**due_indigence** · November 27, 2009, 11:20 AM

Re: Dubai default !!!!!!!

We should remember that the oft-trundled out 'flight to safety' is a reflexive act based mainly on fear and the imperative for speed. As the Telegraph's Jeremy Warner puts it:

"Perversely, [the big advanced economies] are for the time being beneficiaries of the flight to safety that trouble in Dubai has sparked. Government bond yields in the major advanced economies have fallen in response to the crisis in the Gulf."

The operative word is 'perversely'. I think gold needed a rest from its linear ascent and Dubai suffices nicely as an excuse to take pause. The jump from one sovereign debt class to another is like a hop from the fire to the frying pan (or maybe from a tiny frying pan to a bigger frying pan). It's not a carefully-conceived resting place by any means. Dubai may be domino one (or two if you count Iceland) with perhaps the Ukraine to follow, then the rest of the zombie-west. I see a chain of events. There is nothing isolated or anomalous about Dubai.

Debt is the ultimate cosmopolitan. For that, we can thank globalism. Where can you contain the excesses of globalism except extra-globally, like maybe Mars? So really there's nothing 'sovereign' about the economic crisis. Rather it's ubiquitous and omnipresent, like whack-a-mole. Iceland = Dubai = Ukraine...

You can spit between the distance of relative safety vis a vis sovereign debt. Today's not a flight to safety, but a flight for flight's sake.

**GRG55** · November 27, 2009, 11:34 AM

Re: Dubai default !!!!!!!

Originally posted by babbittd View Post

It's not like this happened in secret, it's that most of us didn't notice. By the way, that includes me. Here's a timeline of mainstream media coverage:

Nakheel debt triggers Islamic bond concerns
November 12, 2009 8:43AM

CORRECTED-TIMELINE-Defaults: Islamic finance
Sun Nov 8, 2009 6:49am EST

Moody's downgrades 5 Dubai state-linked entities
Wed Nov 4, 2009 6:35am EST

Debt Watch in Dubai
October 22, 2009, 5:00PM EST

etc.

The fissures in Dubai have been evident for some time. From a March 09 post:

Originally posted by GRG55

Just back from a couple of weeks back in the Arabian Gulf

As in Oz, what a difference a year makes. I left the Gulf almost a year ago. At the time oil prices were flying, new land was being dredged up everywhere for coastal real estate mega-projects, the sovereign wealth funds were buying Citi & UBS shares, and the sky was the limit.
Not surprisingly the bubblicious real estate sector has been the hardest hit. The days of investment banks raising $750 million over the phone in one morning on the back of a real estate mega-project concept, and then tacking on $100 million of promoter fees are gone...
...The entire region is overbuilt with high-end residential developments for which there was never enough market [very few nationals in these countries can afford them]. These projects only made sense for the sponsoring banks/development company because gargantuan project concepts meant equally gargantuan promotion fees could be collected. The ability to pass on the risk to off-plan buyers [wealthy locals and expatriates] that were overwhelmingly speculators was key...Had dinner one night with the head of the local office of one of Europes biggest law firms. Told me he walked on his downpayment on a $1.1 million dollar golf course development villa. Said he was far from alone, and wasn't sure what the development bank was going to do as it was unlikely they could fund the completion of the half-built project [900 villas, PGA level golf course, shopping, mosques, schools, the works] if the market didn't "restart" soon...
There are widespread differences between each of the six GCC States and the various emirates within the UAE. Qatar, Abu Dhabi and Bahrain look best positioned to weather this mess. Oman may have a more difficult time. At the other end of the spectrum is Dubai, which finds itself in the same situation as every other overlevered entity on earth. Went by a large real estate development [luxury hotel, villas on artificial canals, etc.] sponsored by one of the Dubai Ruling Family companies, but located in another GCC state. Totally shut down for lack of funds, all the tower cranes motionless, nothing but blowing sand and one lonely Indian guarding the material stacks...
...The impression I got speaking to folks that I know is that most of the GCC nationals are at about the same level of thinking as we were in the fall of 2007..."there's a problem, but it's just a banking problem and that won't really effect me". And in their case they may have a point. Governments in the GCC own huge chunks of their economies, and large numbers of citizens work for government companies. Dubai excepted, government finances in the region are in very good shape [they've been running surpluses in recent years as we know]...

The bailout, a year ago, of Dubai's Emirates Airlines by Abu Dhabi's Etihad Airline [which itself has never turned a profit since inception] and the Abu Dhabi government purchase of a Dubai asset backed $10 Billion bond issue were additional signs that not all was well in paradise...

From Nov 24 last year:

Originally posted by GRG55 View Post

Dubai's financial position has deteriorated to the point that Abu Dhabi is apparently going to help them out by taking a stake in Emirates Airline. Abu Dhabi has its own airline, Etihad, and these two carriers, along with Qatar Airlines are the lifeblood of Airbus' order book. Looking grim...

**Quincy K** · November 27, 2009, 11:36 AM

Re: Dubai default !!!!!!!

Originally posted by cjppjc View Post

What's the big deal. They are just going to raise the needed cash from new bond sales.

Bond sales? That sounds like a lot of work.

Why wouldn't they just wait for the IMF to make everyone whole?

Free money for everyone.

**don** · November 27, 2009, 11:53 AM

Re: Dubai default !!!!!!!

England's prime minister said this morning that Dubai's problems were "a setback", during a summit meeting of Commonwealth leaders in Trinidad and Tobago. "My own view is the world financial system is stronger now and able to deal with the problems that arise," said Brown.

"I think we will find it is not on the scale of previous problems we have dealt with. I think global recovery has depended on monetary action and fiscal stimulus," he added.

Brown also said that he had spoken to senior figures in Dubai, and was confident that their plans to redevelop the ports they own in the UK would still go ahead.

"The world economy has put in place mechanisms by which when a problem starts in one country we are in a far better position to monitor it and to gauge the effects," Brown said in Port of Spain.

Brown attempted to sound an upbeat note as he awoke in Port of Spain � after a late-night flight to the Commonwealth heads of government meeting � to the news from Dubai. "This is a setback but I think you will find this is not on a scale where previous problems have been dealt with," he said.

"There is five trillions of fiscal stimulus in the world economy � either had or about to have � and that is what is bringing the economy up. The monetary easing, with low interest rates and with quantitative easing in Britain and America � these have been the most important thing in giving the world economy a boost.

"You are dealing with one set of issues related to Dubai. Dubai is part of the UAE, it is part of a wider enterprise. We are going to have issues like this because of the fallout over the last two years."

http://www.guardian.co.uk/business/2...-crisis-shares

Today's Picture Quiz

A. The Swine Flu Bacilli

B. Dubai Housing Development

C. Gordon Brown's Donor Sperm

**GRG55** · November 27, 2009, 12:03 PM

Re: Dubai default !!!!!!!

Originally posted by thunderdownunder View Post

...Dubai /Greek bond problem / Vietnam dong devaluation all in 2 days presents a reality check don't you think?...

Yes. And I don't think too many others are connecting the dots...

**cjppjc** · November 27, 2009, 12:05 PM

Re: Dubai default !!!!!!!

Originally posted by Quincy K View Post

Bond sales? That sounds like a lot of work.

Not really. These bond guys are real good at it.

**GRG55** · November 27, 2009, 12:18 PM

Re: Dubai default !!!!!!!