Dubai Defaults

StevieJ

Sheikh Mohammed will have to sell some of his equine gold

This was yesterday
The cost of protecting Dubai bonds from default traded at 317 basis points today from a peak of 977 in February, five-year credit-default swap prices show. The contracts get cheaper as perceptions of credit quality improve.

And today

LONDON, Nov 26 (Reuters) - Dubai five-year credit default swaps have jumped to al
most 470 basis points on Thursday, a jump of 30 bps on the previous session's close, CDS monitor CMA Datavision said.

http://www.reuters.com/article/marketsNews/idUSGEE5AP0KQ20091126

Some interesting background
http://www.smh.com.au/business/world-business/dubais-economy-no-oasis-20091125-jr3y.html

Mr.Brown_4

Dubai or not Dubai - that is the question. Too late for the Beckhams of course - 60% drop in house prices apparently.

I said 60% drop. No one noticed? Of course it couldn't happen here because we.. er.. um.. well it couldn't could it? After all, Dubai was obviously an unsustainable bubble and the UK, well, the UK has proved what a world leading economy is really made of.

60%. And that's in a glamorous place with millionaires for neighbours, and sunshine. Whaddya reckon to UK house prices now?

StevieJ

Mr.Brown wrote: »

Dubai or not Dubai - that is the question. Too late for the Beckhams of course - 60% drop in house prices apparently.

I said 60% drop. No one noticed? Of course it couldn't happen here because we.. er.. um.. well it couldn't could it? After all, Dubai was obviously an unsustainabkle bubble and the UK, well, the UK has proved what a world leading economy is really made of.

60%. And that's in a glamorous place with millionaires for neighbours. and sunshine. Whaddya reckon to UK house prices now?

To put it another way a place in the desert with no oil

tommy75

Batten down the hatches, the house of cards are creaking. I'll have to buy another five hundred tins of Asda beans tomorrow. :sad:

Chomeur

I think everyone's going to abandon the ghastly place. It's happened before, not so far away:

"the Tower of Babel was ... dedicated to the glory of man, to "make a name" for the builders: "Then they said, 'Come, let us build ourselves a city, and a tower with its top in the heavens, and let us make a name for ourselves; otherwise we shall be scattered abroad upon the face of the whole earth.'" (Genesis 11:4). Some believe that a vengeful God, seeing what the people were doing, came down and confused their languages and scattered the people throughout the earth."

http://en.wikipedia.org/wiki/Tower_of_Babel

ManAtHome

Mr.Brown wrote: »

After all, Dubai was obviously an unsustainable bubble

Serves 'em right for making more land...

amcluesent

There's nothing in the Qu'ran about Allah willing a house price crash! Wonder what else the Prophet failed to prophecy? PBUH.

Degenerate

amcluesent wrote: »

There's nothing in the Qu'ran about Allah willing a house price crash! Wonder what else the Prophet failed to prophecy? PBUH.

It's out of Allah's jurisdiction. One of the reasons they reclaimed all that land from the sea was so people could do naughty things outside of the holy land of the Arabian Peninsula.

neverdespairgirl

I think some people have just realised that Dubai's a patch of over-heated sand in a desert, perhaps?

There is an interesting article about this on the BBC site today:

But if you have a lot of money resting on Dubai coming through their dramatic boom and bust story intact, this is indeed a major shock.


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.


http://www.bbc.co.uk/blogs/thereporters/stephanieflanders/2009/11/dubai_not_too_big_to_fail.html

Revenge_of_the_Red_Devil

neverdespairgirl wrote: »

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.

Presumably in the end they still will. I reckon this is a punishment by the more fiscally conservative Abu Dhabi to the more reckless Dubai - the equivalent to letting your stupid younger brother stay in jail for a night to teach him a lesson about future stupidity before going to get him out.