Like the Monty Python Black Knight, the global banking system keeps getting various limbs whacked off yet continues to yell, ‘Tis only a flesh wound’. So here we are, the latest hyper-credit rated real estate hysteric scam operation going underwater: Dubai is doomed. Although some foolish people might try to keep it afloat like the foolish US tries to keep dying AIG afloat, it is sinking and will cease to be except as a joke or a warning to others. The joy over the news that Abu Dhabi would bail out Dubai has faded as the sheik himself warns everyone, he won’t pay for all losses.
Dubai crisis: Abu Dhabi stock market suffers worst one-day fall on record | Business | guardian.co.uk
The Dubai government said today that it will not guarantee the debts of the stricken conglomerate Dubai World as the city state’s debt crisis continues to haunt the world’s financial markets. After the Abu Dhabi stock market suffered its biggest ever one-day fall today as investors returned after the Eid holiday, Dubai’s top finance official appeared on Dubai TV to insist there was “no need to worry”.
But Abdulrahman al-Saleh, director general of Dubai’s department of finance, caused a surprise by saying that the emirate’s government will not guarantee Dubai World’s $59bn (£36bn) debts. He warned that creditors will suffer “short-term” pain. “Creditors need to take part of the responsibility for their decision to lend to the companies. They think Dubai World is part of the government, which is not correct,” he said.
AIG did the exact same thing. So did Fannie Mae and Freddie Mac. They pretended they were part of the government. Then, when they went bankrupt, they did become part of the government. Which was stupid. It didn’t fix what was wrong. It made things in the long run, much worse. For example, the Derivatives Beast would have finally died a violent but necessary death with the fall of AIG.
Instead, it lives and has resumed growing. The Dubai collapse will hammer this Beast yet again. All the swaps based on the Dubai moonstruck promises will cease to exist and once again, we will have to face the truth: credit default swaps are CRIMINAL. And should be outlawed by international convention. And all players in that game should be fined. Or better still, arrested. Last year, there may have been a dim excuse that no one outside of a few sane people (ahem) could imagine that the CDS markets were a Ponzi scheme. But after the AIG collapse revealed the truth, there should have been a rush to eliminate this CDS market and thus, spare us the stupidity now roiling markets yet again.
The lenders to Dubai were all sharks seeking bonuses and benefits. They didn’t care if the entire business was based on insane beliefs of future population levels in Dubai or future business deals. There should be huge warning signs in all banks showing a succession of ‘world’s tallest buildings’ starting with the Tower of Babel and each one will have in red letters: ‘The economy of this city/nation/world collapsed the same week this building opened for business!’ Then, when anyone comes to these banks telling about plans to build the world’s tallest building, the bankers can show him or her the door.
Instead, they instigate and enable these foolish gestures. For example, when the WTC was first proposed, lower Manhattan wasn’t even slightly crowded. Offices there were just beginning to lose clients as the basis for many of them was in shipping and the US began stripping its own shipping in the sixties. New Jersey was just beginning to open deep water ports so shipping jobs were moving across the Hudson River. Still, the moon shone on the guys proposing the WTC and when it opened, NYC collapsed, rents in lower and even parts of Midtown Manhattan fell like a rock as desperate Port Authority officials undercut the competition, desperate to find any tenants.
Dubai’s sole claim to exist as a mega-housing entity is due to it being anti-Wahhabist. That is, Muslims can cross over to Dubai to have sex, drink and gamble. It looks like Las Vegas because it is a Muslim Las Vegas. For all the Muslims in the more strict nations to go bankrupt, too, or to pay a stiff price to keep this fun city alive, is extremely ironic and very, very explosive. All these vast towers are sitting ducks waiting for Muslim radicals to destroy them all. And they will. I would bank on that happening. Big time.
Dubai World’s Debt Not Guaranteed by Government (Correct) – Bloomberg.com
In the prospectus for its first Islamic bond sale in October, the government said “certain strategic government- related entities of the emirate have significant borrowings which are not direct obligations of the government of Dubai.” The government raised $1.93 billion from local and international investors in the sale.
“If any of these entities are unable to, or are potentially unable to, fulfill their debt obligations, the Dubai government, although not legally obliged to do so and without any obligation whatsoever, may at its sole discretion decide to extend such support as it may deem suitable,” according to the prospectus. “It’s not correct to assume that Dubai World is part of the government of Dubai,” al-Saleh said.
The sheik will bail out family members, not foreign devils. This is obvious. And the wayward sons who screwed up will be forced to make promises that won’t please Jewish and Christian bankers who are, after all, infidels, anyway. Many religions have, as a core belief, that it is OK to cheat people outside of their belief systems. This ‘get out of debt free’ card is very religious and extremely ancient. The emotional power of this is great. For example, the US openly gloats about the potential to cheat foreign Asian non-Christian nations and Muslims as we plot to go bankrupt in due course.
When push comes to shove, all groups protect themselves. Some readers here get mad at me when I knock ‘internationalism’ and explain how ‘nationalism’ is a useful defense tool that protects populations. The UAE is a fine example of how a lose confederation is very weak, not strong. Europe is a confederation that recently installed a quasi-barely-elected semi-dictator who has no popular support in any individual country but who is supposed to make internationalist decisions on behalf of the resident populations who have virtually no say in any of these internationalist matters.
Eventually, the EU experiment will either collapse like Dubai when things go badly or Europe will see some enterprising internationalist who has Soviet-level powers of dictate take over and rule via an internationalist political party like the Soviet Union was run for so long. This all depends on Germany and France making various choices. History tells us very clearly, this doesn’t work out so hot, does it? Not in bad economic times.
Dubai debt meltdown — another financial crisis?_English_Xinhua
Amid fears that Dubai World could delay its massive debt payments and shock waves around the world’s already brittle stock markets, the world leaders played down the troubles and showed their confidence in global economy.
Although Britain comes in forefront with many of its commercial banks exposed to the Gulf emirate’s financial problems, its Prime Minister Gordon Brown was more ready to call it a setback, which he said was “not on the scale of previous problems we have dealt with.” “The world financial system is stronger now and able to deal with the problems that arise,” he added. French Prime Minister Francois Fillon said the Gulf had the resources to ensure the world would not sink into a second round of turmoil.
HAHAHA. ‘Tis but a flesh wound!’ yells the Black Knight. As Arthur notes, ‘You are a loony’. The world is, exactly like in the Great Depression, hitting a second wind downwards. All depressions do this. The frantic efforts to bolster asset markets and recapitalized grossly overextended banks always falters when the second wave hits. This is due to the concept of ‘Libra’: all things must be balanced. So, if a property bubble is huge, it has to fall below the norm to the exact same degree before it can grow upwards again. Ditto, stock markets and trade. All systems have this magic ‘reset’ point that can’t be eluded.
This sounds grim, of course. But then, the sole function of any government is not to insure we all get richer, forever. Nor is it for protecting wealth forever. It is for protecting the people from destruction. Losing one’s home isn’t destruction, for example. I lived with my husband and young son in a tent for ten years. The boy grew up in this ad hoc thing built out of people’s cast-offs. It was a good lesson in life. And we did surprisingly well, considering we were in the cold Northeast and endured terrible blizzards and below zero weather!
No, the thing the Nation protects is our joint security. That is, no building of any sort is any good if we are destroyed as a nation. Destroying the nation to save homeowners who can’t pay bills on reckless IOUs they took on, is suicidal. Abu Dhabi shouldn’t destroy itself in order to save all sorts of alien infidels from economic bad choices! No, Abu Dhabi will save its own and force them to change, too. In ways the West won’t like, of course.
Arab Emirates Move to Limit Crisis in Dubai – NYTimes.com
Analysts will be watching crucial indicators of stability or alarm. The most apparent will be if money is pulled from other investments to the safe havens. Analysts will be monitoring the amount of interest that investors demand to lend money to emerging market countries. It has already risen sharply since the Dubai crisis erupted on Wednesday…. Trying to prevent a run on its banks and stem financial turmoil that some fear could spread globally, the United Arab Emirates helped calm markets Monday by pledging to lend money to banks operating in Dubai. But the action comes amid concerns about excessive borrowing around the world…. .
…Many countries may face tests in the weeks and months to come as they try to roll over their existing debts. These countries will not be able to raise money easily or cheaply. This could put pressure on stronger members of the European Union to bail out weaker members, or at least help them restructure their debts and nurse them back to health….
…However, in the long run, a global credit crisis set off by Dubai would make the cost of financing the trillions of dollars in American debt much more expensive, Mr. Roubini said. “Even the U.S. — over time — cannot run forever unsustainable fiscal deficit,” he said. “The total financing needs of the U.S. will range in the $1.5 trillion to $1.7 trillion a year for the next decade,” he said. “That is a huge amount of public debt to issue and or roll over.”
England is going down with the ship. The many banking rescues undermined sovereign wealth and exposed the main bulk of the population to future depredation. The populace will be thrown overboard while the internationalists will sail off to fresh killing grounds. When Europe tossed sovereignty overboard, they exposed the populations to the cruelties of judgements that are not ‘kin’: the internationalists don’t give a hoot, who dies, so long as their wealth and power are kept intact no matter what.
Even if a nation has the fiction of ‘elections’ like the bizarre series of elections the US had this last decade, it won’t protect the populace from being punished for choices made by internationalist bankers and their ilk. A recent poll Daily Kos: State of the Nation showed 40% of the Democratic voters are extremely unenthusiastic about voting or donating to Democrats. This is thanks to Obama and the DNC using up all their political capital to bail out and protect the medical insurance business, Goldman Sachs and JP Morgan, the military/industrial powers, etc. Obama has nearly totally struck out, as far as half of the Democratic party base!
Note how he and his ilk threw us all overboard. Even sovereign Western nations not ruled by distant bureaucrats don’t think twice when it comes to who to protect! The Daily Kos lives in Cloud Coo Coo Land. They (the CIA operative who runs the joint) tell their believers that if the pro-insurance corporation package that hammers Medicare services passes, we will all be happy as larks! And if Obama can bankrupt our nation, enabling people who went too deep into debt running up debt on their homes, while running tremendously expensive and ruinous wars, this is insanity.
And of course, running both our government and our trade in the red for decades and decades is utter madness. And the biggest ship that is sinking isn’t Dubai. Or even the last remnants of the British Empire. It is the USS USA.
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24 responses to “Dubai Collapse Leading Edge Of Further Falls”
I like your write-up. Will be interesting to see how UAE swoop in to save Dubai World works out from financial and geo-political standpoints. Perhaps a test case when an EU country defaults — hello greece?! Or perhaps closer to home — California, I’m looking at you! Will “Too big to save” become the new “too big to fail.”
Meanwhile US/fed reserv backstopping successes — AIG, Fannie/freddie still hemoraging.
Things are getting interesting…
I would dearly love for J6P to take this on board – some pesky backwards A-rab nation NOT bailing out debtors and lenders while our enlightened democratic righteous leaders plunder citizens to pay off the banksters who bribed them.
The Arab kingdoms including Saudi Arabia are all about ‘family’: they are related to each other and not to the people they rule, in many cases, often these people doing the actual work are from SE Asia.
Elaine, excellent stuff, I think our Dubai is coming next year with the Option Arms, Alt. A’s, and Jumbo Loans getting ready to reset !!
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Chelsea Clinton to marry
a guy who works at GS!
And his father was busted for 10 million swindle.
Its all in the Family!
Well, if this is so, if the Second Wave is forthcoming, the Obama government will be seen to have been stupidly or criminally wrong in their prohibitively and highly unpopular rescue mission, and they will not be forgiven. Obama will pay for his mistakes, the mistakes of his predecessors and for the expectations he created and could not possibly, as a black man, have fulfilled, had he dared to try. This was a time of great reform, fit only for an old white Southern man, a Lyndon B. Johnson, a Ron Paul.
I don’t share the pessimism on Europe, though. I don’t think the Union will dissolve as a consequence of the crisis, we’re all too used to it and it’s advantages. It’s a big, mean world out there for any European country to face on it’s own. The European central government will demand, and obtain, more loss of national sovereignty on macroeconomic matters to cut down the cost of bailing out the unruly. There’ll be no more resistance form the little Irelands. They will be shown the door. And the equally bankrupt little Icelands, frantically knocking the door begging to get in, will be a stern reminder for all. The unanimity requirements have been lifted after Lisbon, and the European leader is more a mouthpiece of the main countries, rather than a leader a s such. That is not a bad thing. I think Americans find it hard to imagine belonging to such an organisation, being so used to going it alone from being so powerful and isolated. Hence they keep predicting its demise, some hoping the prophecy will be self fulfilling. Mere wishful thinking. Europe means security in an uncertain world. I imagine it is simpler and more satisfying to deal with aggressive, authoritarian economic rivals. I mean, just having to deal with the French is insufferable enough.
think dubai is more lehman than AIG…. wonder if credit freezes up again…
the markets didnt freak out all that much… so i guess panic selling will have to wait
people who pay their bills cant make a killing
Yes, it is Lehman Bros. and its fall will trigger the exact same messes which pulled down AIG. Remember: we (the home bases of these international dealers) will be stuck with fixing this latest collapse in the CDS markets.
Vancouver housing bubble heating up again, reports of line-ups to buy condos.
Iran’s Nuclear Plant Bushehr successfully
Fed as Buyer of Last Resort
Chelsea Clinton’s new Father -InLaw-
A Nigerian Money Scam Artist, Jail Bird, and Notorious Con Man…too bad, they wont like their new in-laws, the out law Clintons, that is!
Ed Mezvinsky, father of Marc Mezvinsky is soon to be the Clintons new InLaw/Outlaw.
Elaine, sometimes I think you are crazy and sometimes you write something that is really genius. This clearly fits the second category. Very few people understand the internationalist are destroying the USA and have probably since the UN was created at the end of WW II. The US people need to accept a depression if necessary to save our own skin. This bailing out that our government has engaged in has me madder than anything I can recall. The recent stories about the global warming fraud are even worse, as it is religion to so many people. The idea that corporations and Wall street would own the right for us to consume energy along with an international organization blows me away. Washington, Jefferson and other founding fathers must be spinning in their graves at the sheep that have now inhabited their country.
ELAINE: It is rather sad that when I give information from deep inside of the system (I grew up as an insider, not outsider) people think I am crazy. Yet these same people accept as gospel some of the goofiest stuff put out by others who are not as deeply inside as I….HAHAHA.
It is a long time past since you were an insider. Generations of spies and spooks and scientists have come and gone. As you never fail to remind, you have been on the outside since about 1968. Being a spy at the keyholes of your families house in the 60’s does not translate to being au currant today.
ELAINE: Totally wrong, dude. And I ran in the same circles for YEARS. Up until Bush II became president.
Bankers having more affairs in recession: website
LONDON (Reuters Life!) – Reviled by the public and spurned in private, bankers have been looking for solace in adultery, according to a dating website for people seeking affairs.
knowingly douchebagging people around the planet…. cuz they feel bad and everyone else is doing it….
and they have the politicians in their pockets
when you shit on everyone its easy to hold on to power…. just dont hire people with out shit on them
peer pressure… is that a liberal idea of self examination omg… grown men throwing everyone under the bus
What is the e mail address of Finance deptt India &American ambessy?
Awesome Information helpful for me to generate knowledge. Thanks.
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The Problem Ain’t Dubai. It’s London!
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THE PROBLEM AIN’T DUBAI. IT’S LONDON!
by John Hoefle
November 29, 2009 (LPAC)—Death never takes a holiday, and neither does the global breakdown. While the attention of America was distracted by the Thanksgiving holiday, the British Empire was on the move, making decisions which include a planned early dumping of President Barack Obama.
Good article. I absolutely appreciate this website. Stick with it!