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Friday, November 27, 2009

Re: [Technical-Investor] Dubai Default

 

Hi Friends
 
Saw this coming a couple of years back when i lived in Dubai.
 
Was residing in Dubai for almost 9-10 years.
 
Moved back to home sweet home India almost 2 years back as i was expecting this crash then.
 
Dubai was just a bubble waiting to break. They are good at marketing but once one bubble bursts then that is the begining.
 
Since last year and half the ports were under utilized - as reduction in exports and imports.
 
Just in case some of the members are not aware the facts about Dubai's economy is as under:
 
1. Net importer of oil - so cannot sell oil. Oil prices effect Dubai itself - what an irony.
2. Was solely dependent on Tourism - any terrorist attacks in the neighbourhood meant chaos. Especially situation of Iran - just opposite to Dubai.
3. Was a hype created by the excellent marketing skills of HE Sheikh Mohammed.
4. Fully dependent on Abu Dhabi the capital of UAE for funds - Abu Dhabi is a net exporter of Oil.
5. Had opened up freehold land 4-5 years back for outsiders because of shortage of funds.
6. The stock markets are not well regulated - highly rigged - same a what once used to be the position in the BSE long time back.
7. Had opened up investments in the stock markets to all - due to shortage of internal resources to finance business.
8. All information is rigged and censored - even now we do not have actual figures.
9. Dubai had defaulted on the debts last year itself but was bailed out by Abu Dhabi - temporarily against sale of property in Dubai.
10. The debts are more than the GDP of Dubai.
11. Major banks that would be effected are local and MNC - none of the Indian banks would be affected as not allowed to operate directly from dubai.
12. Yes there will be job losses - Asians would be major suffers
13. Benefits of Dubai were more reaped by Pakistan and thus they would be more effected than India.
14. Yes India used to export items for consumption of Indians in Dubai more than for consumption of Goras over there.
15. Major source of imports were from China.
16. Inflow of forex from Dubai can impact India for sure.
 
So - are we still doomed? well need to see - macro economic details dont reflect the same.
 
Guys - India is the place of the future.
 
Thanks and Regards
Floyd


--- On Fri, 11/27/09, Ray Seth <rayseth@gmail.com> wrote:

From: Ray Seth <rayseth@gmail.com>
Subject: Re: [Technical-Investor] Dubai Default
To: Technical-Investor@yahoogroups.com
Date: Friday, November 27, 2009, 12:52 AM

 
China has survived. They always built paper houses. :-)

On Fri, Nov 27, 2009 at 11:15 AM, BALASUBRAMANIAM SRIRAM <bees2365@yahoo. co.in> wrote:


In Tamil, there used to be a folklore which says empires will fall after building tall or monumental structures. They used to quote the Chola dynasty for that I saw that happening in Malaysia afteR  Petronas Towers. Now in Dubai. When is China?

Sriram

B.Sriram
4B, Skylark Apts,
6,Rutlandgate Fifth St.,
Chennai-600006
Ph:+91 44 28334849(Dir) /28332373( Board)
Mobile:+91 98400 63145
Email:bhsppt@gmail. com

--- On Fri, 27/11/09, Sniper Trader <snipertrader@ gmail.com> wrote:

From: Sniper Trader <snipertrader@ gmail.com>
Subject: [Technical-Investor ] Dubai Default
To: Technical-Investor@ yahoogroups. com
Date: Friday, 27 November, 2009, 7:58 AM


 
Good Morning Working Drones -

Today's news carries a series of unexpected and surprising headlines when the Dubai Government announced that Dubai World will ask creditors for a standstill agreement to extend the maturities of all debt repayments by Dubai World and its property unit Nakheel until May next year.

Now the interesting thing here is that the bets on Dubai's default (using CDS and other wall street toys) weigh in much higher than the actual default.

What is also interesting is....the news was released on a US market holiday. 

This COULD have huge ramifications for the markets 

Equities will react....thats a no brainer...but the USD could strengthen.. .putting further pressure on global mkts including commodities.

The play book move would be what we saw when Lehman collapsed

- USD strong
- Equities Weak
- Commodities Weak

Somehow i feel, things will be slightly different this time.

I am watching the CDS mkt space for more clues..looks like Greece is next!

Cheers! 

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Posted by nsivaa at 12:49 AM

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