Dubai from boom to bust - Financial Times & Bloomberg downgrade UAE
Join Date: Oct 2007
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Jet II
Let's revisit who is better or worse off at a later date...
- Much more to come on the property "corrections" Since when was negative equity a good thing for anyone? Even banks.
- Who cares who owned the stock - the money is lost to the economy.
- People who go represent ZERO spending -Who will keep the retail, travel and entertainment sectors going?
- Other indicators - Well who knows they will never tell us the truth.
Let's revisit who is better or worse off at a later date...
Join Date: Feb 2007
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To compare the old economies with the UAE, especially Dubai, is problematic. It seems that what differs most is the amplitude of the recent upswing and the witnessed similar downswing now.
As with every crisis, there will be the reverse. No one knows when and how quick or slow it will be, but I truly believe that after a severe correction, there will be a slight trend upwards. There is still some oil left and still some potential for the ME, considering the population pressure from further east.
I am not overly optimistic for the near future, but not too pessimistic as well. Going back to the amplitude, there is a chance that with a future upswing this region could again display a steeper one than the West. If you can, stay put, endure the shafting by our dismal management, and wait for better times.
As with every crisis, there will be the reverse. No one knows when and how quick or slow it will be, but I truly believe that after a severe correction, there will be a slight trend upwards. There is still some oil left and still some potential for the ME, considering the population pressure from further east.
I am not overly optimistic for the near future, but not too pessimistic as well. Going back to the amplitude, there is a chance that with a future upswing this region could again display a steeper one than the West. If you can, stay put, endure the shafting by our dismal management, and wait for better times.
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I have however meet loads who have lost jobs out here and are desperate to find another job in the region rather than move back home....
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schismatic, thats the way banks work, there the ones who made the recession happen, because they where lending to anyone! Now they have to be strict, i think they have learnt there lesson, just give them 2 years and they will be giving loans to people on holiday in the UK again
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Idiot Banks worst in UK
Schismatic : Have a look at what the UK banks have been upto before you comment on foreign banks:
The banks could now make Britain go bust - MoneyWeek
The banks could now make Britain go bust - MoneyWeek
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Economic meltdown leaves Dubai's Asian migrant workers out in the cold
Economic meltdown leaves Dubai's Asian migrant workers out in the cold - The China Post
Dubai realty meltdown may spread through GCC
Dubai realty meltdown may spread through GCC: | Kuwait Financial Center
Dubai takes big losses during worldwide financial meltdown
Dubai takes big losses during worldwide financial meltdown - TruLyfe
Dubai Economy "In Free Fall," Foreigners Fleeing Country
Dubai Economy "In Free Fall," Foreigners Fleeing Country
Economic meltdown leaves Dubai's Asian migrant workers out in the cold - The China Post
Dubai realty meltdown may spread through GCC
Dubai realty meltdown may spread through GCC: | Kuwait Financial Center
Dubai takes big losses during worldwide financial meltdown
Dubai takes big losses during worldwide financial meltdown - TruLyfe
Dubai Economy "In Free Fall," Foreigners Fleeing Country
Dubai Economy "In Free Fall," Foreigners Fleeing Country
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Wall Street Journal today 17th Feb
Will oil-rich Abu Dhabi bail out neighbor Dubai, currently groaning under $70 billion of debt racked up by its government-owned companies? Don't count on it.
Abu Dhabi's decision last week to pump $4.4 billion into its own banks while offering no support to lenders in Dubai or other members of the United Arab Emirates may simply be brinkmanship among the sheiks. But the possibility Abu Dhabi will refuse to come to Dubai's aid, once seen as almost unthinkable, can no longer be ruled out.
That raises the prospect of a deeper debt crisis in Dubai. And it could even mean a fragmentation of the federation, now in its 38th year, if Abu Dhabi refuses to pump billions of dollars into the economies of poorer emirates like Dubai to prevent either a corporate default or severe downturn. The cost of insuring Dubai debt has rocketed to around 10 percentage points for five-year debt -- higher even than for Iceland.
Getty ImagesConstruction of new buildings in Dubai, United Arab Emirates. The global financial crisis has taken its toll in Dubai with construction slowing and many projects in the planning stage being canceled.
Dubai's economy is contracting after a 40% slump in property prices, leaving the emirate struggling to refinance $15 billion of debt this year, according to credit-rating company Moody's.
Without Abu Dhabi's help, it has little chance of doing so. Moody's says it is likely to downgrade a raft of state-owned companies "if a trend of selective treatment within the federation becomes discernible." And bankers say they won't extend new lines of credit to Dubai without cast-iron financial guarantees from Abu Dhabi.
Abu Dhabi is driving a hard bargain. Its demands may include the surrender of Dubai's autonomy and the loss of control over crown jewels such as Emirates Airline and Nakheel, builder of the emirate's palm-shaped islands.
That may be too much for Dubai's ruling Maktoum family to stomach -- partly because the rulers of the two sheikdoms are cousins. Also, Dubai contends it was a principle of the 1971 agreement to form the federation that Abu Dhabi would use its oil wealth to support the other emirates.
Abu Dhabi has its own economic worries, thanks to falling oil prices, which account for the majority of the emirate's export earnings. Its reserves have been depleted by the losses suffered on its foreign investments, such as the $7.5 billion Abu Dhabi pumped into Citigroup in 2007 just before its shares collapsed.
But neither Abu Dhabi nor Dubai can afford to allow this standoff to drag on. Default by a major Dubai-owned company would trigger a crisis of confidence that could cost the emirate its status as the pre-eminent center for business in the region.
Worse, it could pull on the fabric that binds the emirates together, destabilizing the entire region.
Abu Dhabi's decision last week to pump $4.4 billion into its own banks while offering no support to lenders in Dubai or other members of the United Arab Emirates may simply be brinkmanship among the sheiks. But the possibility Abu Dhabi will refuse to come to Dubai's aid, once seen as almost unthinkable, can no longer be ruled out.
That raises the prospect of a deeper debt crisis in Dubai. And it could even mean a fragmentation of the federation, now in its 38th year, if Abu Dhabi refuses to pump billions of dollars into the economies of poorer emirates like Dubai to prevent either a corporate default or severe downturn. The cost of insuring Dubai debt has rocketed to around 10 percentage points for five-year debt -- higher even than for Iceland.
Getty ImagesConstruction of new buildings in Dubai, United Arab Emirates. The global financial crisis has taken its toll in Dubai with construction slowing and many projects in the planning stage being canceled.Dubai's economy is contracting after a 40% slump in property prices, leaving the emirate struggling to refinance $15 billion of debt this year, according to credit-rating company Moody's.
Without Abu Dhabi's help, it has little chance of doing so. Moody's says it is likely to downgrade a raft of state-owned companies "if a trend of selective treatment within the federation becomes discernible." And bankers say they won't extend new lines of credit to Dubai without cast-iron financial guarantees from Abu Dhabi.
Abu Dhabi is driving a hard bargain. Its demands may include the surrender of Dubai's autonomy and the loss of control over crown jewels such as Emirates Airline and Nakheel, builder of the emirate's palm-shaped islands.
That may be too much for Dubai's ruling Maktoum family to stomach -- partly because the rulers of the two sheikdoms are cousins. Also, Dubai contends it was a principle of the 1971 agreement to form the federation that Abu Dhabi would use its oil wealth to support the other emirates.
Abu Dhabi has its own economic worries, thanks to falling oil prices, which account for the majority of the emirate's export earnings. Its reserves have been depleted by the losses suffered on its foreign investments, such as the $7.5 billion Abu Dhabi pumped into Citigroup in 2007 just before its shares collapsed.
But neither Abu Dhabi nor Dubai can afford to allow this standoff to drag on. Default by a major Dubai-owned company would trigger a crisis of confidence that could cost the emirate its status as the pre-eminent center for business in the region.
Worse, it could pull on the fabric that binds the emirates together, destabilizing the entire region.
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Not so long ago!
a few years ago,05/06 ,during my studies among many issues we discussed among us and professor about every aviation region in the world,future trends,business opportunities, business models, survival ability for particular airliner and so on.
I was one of those to claim that ME carriers will have the best chances to survive during expected crises( at that moment I predicted global aviation crisis at winter 08/09
). I had whole list of reason for such strategic prediction. Professor( Embry Riddle,PhD) added one crucial thing to my statement that I didn't know . Emirates is not only supported by Dubai government and ruling family but owns real estate company as well. About 80 % of Dubai properties (plus some international projects) are under direct/inderect Emirates ownership so they will never have financing problems. Because real estate(as name suggests
) will always be worth. Usuually more today than yesterday.
what a logic and assumption!
P.S. Personally I have never believed that real estate sector is worth and interesting for serious investments. Energy is number No1!
Yesterday,today,tommorow,as well.
a few years ago,05/06 ,during my studies among many issues we discussed among us and professor about every aviation region in the world,future trends,business opportunities, business models, survival ability for particular airliner and so on.
I was one of those to claim that ME carriers will have the best chances to survive during expected crises( at that moment I predicted global aviation crisis at winter 08/09
). I had whole list of reason for such strategic prediction. Professor( Embry Riddle,PhD) added one crucial thing to my statement that I didn't know . Emirates is not only supported by Dubai government and ruling family but owns real estate company as well. About 80 % of Dubai properties (plus some international projects) are under direct/inderect Emirates ownership so they will never have financing problems. Because real estate(as name suggests) will always be worth. Usuually more today than yesterday. what a logic and assumption!
P.S. Personally I have never believed that real estate sector is worth and interesting for serious investments. Energy is number No1!
Yesterday,today,tommorow,as well.
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Ok, so this Embry-Riddle professor has a name, does he, and who did he cite to confirm that Emirates Airlines Group owns "about 80%" of Dubai property?
Good to see that the studies have served you so well, Singa!
Good to see that the studies have served you so well, Singa!
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Dubai Property Investors Default:
7 Days today:
....Investors and home buyers in the UAE may default on payments for uncompleted properties, creating a liability for developers of as much as $25 billion, UBS said. “In our view investors are, and will continue to, default,” Dubai-based UBS real estate and construction analyst Saud Masud said.
“Our assessment... is based on the cost to developers to finish properties should investors default on the upcoming supply of 140,000 units.
“We estimate this liability to be roughly $20 to $25 billion over the next two years.” In conservative estimates, 30 per cent of residential properties may be empty by the end of next year as the population falls and the risk of oversupply increases, Masud added...
No surprise there then.
....Investors and home buyers in the UAE may default on payments for uncompleted properties, creating a liability for developers of as much as $25 billion, UBS said. “In our view investors are, and will continue to, default,” Dubai-based UBS real estate and construction analyst Saud Masud said.
“Our assessment... is based on the cost to developers to finish properties should investors default on the upcoming supply of 140,000 units.
“We estimate this liability to be roughly $20 to $25 billion over the next two years.” In conservative estimates, 30 per cent of residential properties may be empty by the end of next year as the population falls and the risk of oversupply increases, Masud added...
No surprise there then.
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Yeah ... UBS posing as THE authority in these matters.
55 billion$ from the Swiss to barely survive, still 2 billion$ in bonuses payed for "good work", that's what I call a very transparent f&*k-up.
The situation here is not nice, but spare me the clowns, please.......
55 billion$ from the Swiss to barely survive, still 2 billion$ in bonuses payed for "good work", that's what I call a very transparent f&*k-up.
The situation here is not nice, but spare me the clowns, please.......
