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Dubai’s Request For Debt ‘Standstill’ Shakes World Markets

November 28, 2009

DUBAI, United Arab Emirates — Just a year after the global downturn derailed Dubai’s explosive growth, the city is now so swamped in debt that it’s asking for a six-month reprieve on paying its bills – causing a drop on world markets Thursday and raising questions about Dubai’s reputation as a magnet for international investment.

The fallout came swiftly and was felt globally after Wednesday statement that Dubai’s main development engine, Dubai World, would ask creditors for a “standstill” on paying back its $60 billion debt until at least May. The company’s real estate arm, Nakheel – whose projects include the palm-shaped island in the Gulf – shoulders the bulk of money due to banks, investment houses and outside development contractors.

http://www.huffingtonpost.com/2009/11/26/dubai-request-for-debt-st_n_371852.html

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6 comments

  1. Trouble in Paradise? We have all seen pictures of the desert indoor ski facility, the palm-shaped man-made islands, the proposed Dubai Towers, and the needle-like BurjDubai.

    Shadenfreude, anyone? Except in a global economy, when Dubai sneezes even the USA can catch a cold.


  2. In the over all scheme of things this is pretty small. After an early dive Friday the European markets rose for the day. Anybody could have looked at the Dubai plans several years ago and known they were crazy – not unlike the Shanghai building boom – or California with it’s million dollar starter homes for hat matter.


  3. and this less optimistic view:
    http://www.nytimes.com/2009/11/28/business/global/28dubai.html

    In a worst-case contagion, Bank of America analysts wrote Friday, “One cannot rule out — as a tail-risk — a case where this would escalate into a major sovereign default problem, which would then resonate across global emerging markets in the same way that Argentina did in the early 2000s or Russia in the late 1990s.”
    And not just emerging markets. “Dubai shows us that what we are now facing is a solvency issue, not a liquidity issue,” said Jonathan Tepper, a partner at Variant Perception, a research house in London that has been outspoken on the debt problems facing European economies.


  4. guys..this is a mess. Do you realize how many banks lent money to those many industries out there.. oh yes.. lots. and the domino effect will begin. This is what will happen. It is just that simple. Who will bail out Dubai.. is the question. the middle class american. Geez.

    It all goes back to what I said last year on The Tulsa World.. remember.. before I got bozoed.. those swaps.. the banks have the cash from the worlds banks today.. but it isn’t enough.. this will take years. YEARS. We haven’t seen the bottom.

    BTW, this site is nice.. needs a little color.. but then I like color. Yellow doggie.. I apologize for the poop…on the island.. it had to be done to flush out the mole. The rusty mole.. yes. Now we all know the truth and can carry on… as the song says.. wayward son.. Some people are crazy for real. Who would of thought. She and the cory M. ewww. oh well. now we know. and they will lurk here. So what. We are stronger.. I am a boilermaker.. from the North.. Chin is Irish.. Methinks you are big ten.


  5. Spot???? that ain’t Spot!!! and you know it.. LOL!!!!!!!!!!!!!!!!!!!!!!!!!!


  6. Big 10? Well my kid is sortta….and yes from the north. Who is that spot anyway? I’m more handsome woof Grrrr.



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