Danger: Dubai crisis could trigger new global panic!!!
By Daniel at 29 November, 2009, 8:42 pm
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In Dubai they have multiple skyscrapers many almost totally vacant and many have false floors so as to enable them to be built even taller even though they can’t be filled, with the emphasis on the tallness of the building for show, rather than the economy of using it. Banksters have been pumping up relate estate in Dubai for a long time and many banks have large offices and associations with Dubai.
The article from Wikipedia points out to the fact that the apparent richness of Dubai has actually only 6% of its GDP from oil, whilst expenses of so many of the developments and maintenance of them is incredible, so much of the rest could have been pumped up from banksters in a kind of ponzi scheme.
Some of the developments include a waterfront about 7 times as large as Manhattan, a 30 storey rotating skyscraper and a US dollar investment for 29,000 hotel rooms. Dubai has also bought up prime areas of New York and London.
“We had been looking for something to trigger a correction,” he said. “This could be that catalyst.”
According to this article, Dubai construction companies have used workers, often very low paid working up to 12 hours a day, seven days a week for many construction projects.
http://en.wikipedia.org/wiki/Economy_of_Dubai
Dubai bubble bursts:
http://www.huffingtonpost.com/ahmed-shihabeldin/has-dubais-overblown-bubb_b_168044.html
Interesting correlation mentioned in this article on the Skyscraper index of tallest buildings being built at the height of bubbles coinciding with the start of major global market crashes and economic recessions and the Great Depression:
http://www.lewrockwell.com/orig9/powell1.html
Empire State Building New York, at 381m roof height and spire to 443m built in 1931:
http://en.wikipedia.org/wiki/Empire_State_Building
Willis Tower formerly named Sears Tower roof at 442m and spire at 527m, completed in 1973, when it was the largest retailer in the world was once the tallest tower in the world:
http://en.wikipedia.org/wiki/Willis_Tower
http://en.wikipedia.org/wiki/Sears_tower
The twin towers, New York were the world’s tallest buildings in 1973 with roof at 417m and top of spire on WT1 at 526m, WT1 completed in 1972 and WT2 .They had been the second and third tallest buildings in the world when they were destroyed in 2001:
http://en.wikipedia.org/wiki/World_Trade_Center
China completed the world third tallest building in Shanghai in 2008 for the Shanghai World Financial Centre, also has the world’s seventh tallest building at Nanjing Greenland Financial Centre completed 2009 and world ninth tallest building the Guangzhou West Tower also in 2009. Hong Kong is to have the world’s fourth tallest skyscraper, the International Commerce Centre to be completed 2010:
http://en.wikipedia.org/wiki/Tallest_buildings_in_the_world
The world’s tallest building and man-made structure at Burj Dubai standing 825m tall dwarfing surrounding skyscrapers to be completed and opened in January 2010:
http://www.burjdubaiskyscraper.com/
http://www.burjdubaiskyscraper.com/photos.html
This You Tube vide shows clearly all the empty skyscrapers :
http://www.youtube.com/watch?v=EZkfm2hxWeM&feature=related
Large losses due to Dubai crisis feared by HSBC, Standard Chartered and RBS, also with exposure of JP Morgan:
http://www.guardian.co.uk/business/2009/nov/27/british-banks-exposed-dubai-crisis
Barclays desperately try to encourage investors to continue to supports its Dubai investments and are having to constantly change their recommendations as more of reality is discovered:
http://ftalphaville.ft.com/blog/2009/11/26/85521/barclays-capital-change-their-view-on-dubai/
http://www.zerohedge.com/article/dubai-observations
Barclays heavily into Dubai debt, this article also mentions involvement of other banks such as HSBC, Lloyds, RBS and Credit Suisse:
http://www.capital-chronicle.com/2009/11/weeks-ago-barclays-loved-dubai-debt.html
Barclays is heavily into Dubai in many ways including sporting sponsoring in Dubai:
http://www.barclaysdubaitennischampionships.com/1/home/default.asp
http://www.atpworldtour.com/Tennis/Tournaments/Dubai.aspx
Barclays heavily into Dubai real estate
Barclays own real estate website for Dubai called HomesGofast:
http://www.homesgofast.com/dubai/Barclays_Bank_Mortgages.php
Guardian UK article says:”Gordon Brown attempts to play down global impact of Dubai crisis” It shows a nice photo of the man made islands in Dubai. The article also cites Gordon Brown mentioning $ 5 trillion of stimulus helping inflate the world’s financial markets. The article goes on further to emphasis the extreme risk and that the price of insuring Dubai’s debt has shot up from 129 to 670 basis points:
http://www.guardian.co.uk/business/2009/nov/27/dubai-panic-financial-crisis-shares
http://www.guardian.co.uk/commentisfree/poll/2009/nov/27/dubai-crisis-debt-recession
According to Bloomberg, Bank of America suggests the Dubai crisis may lead to a sovereign debt default with a global impact:
http://www.bloomberg.com/apps/news?pid=20601087&sid=a8RD8uqjoLCQ&@#$%&!=2
Insurance contracts for Dubai World have surged from 167 to 776 basis points leads to rise in global credit risk with credit default swaps surging around the globe:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aBhwAC1GSJEg&@#$%&!=5
If you are truly so short sighted as to believe Dubai’s debt default does not effect us, then continue on, until the rest of the story comes leaking out. A 60 or 80 or 90 billion debt payment being missed means someone or a lot of somebodies are going to be missing a big chunk of income they were counting on, to shore up their debt. The question is who and where? USA, Europe, ect. As weak as all the Banks/Lenders are how much income can they loose before even their cooked books and imaginary profits fall apart? It is also a small fore warning of an even bigger problem such as when the commercial real estate loan begin to default.
Calm before the storm, I fear. And, we really don’t know how *bad* it’s going to be…. Investors should exit all stock markets RIGHT NOW.
Expect a gigantic short squeeze in USD! This is the type of catalyst, in my opinion, that will turn the already very bullish market. I will expect the market to fall for the next few weeks as more and more bad news surfacing. Time to cash in and move into bonds or ETF shorts. I prefer the ETF shorts more.
Funny, that this Dubai Turkey Bomb exploded on Thanksgiving Day!
“Thanks but no Thanks!” as Sarah Palin said it so well.
- LearnFromMistakes
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