Well mensaboy - it concerns me and quite frankly scares me that you think BO is the guy to bail the US and the rest of the world out..... The UK made a similar mistake when they put blair in and ousted the tories:=

Trader - I made that note to self a while ago:ok:

White K-

Don't get too concerned with any pronouncement from Mensabore - the last time anyone that self-absorbed walked the planet it was Jefferson Davis. And you know how that turned out.

Squeeeeeeze
 

The Squeeze has already started. Front page of the Gulf News today says that the two largest Islamic mortgage providers, Amlak and Tamweel are in talks about a merger. The spin is that it is to optimize their combined market position however those of us who have been here a while will know that what you read in the press is only what the "powers that be" want you to believe.

It is more likely an attempt to shore up two rather poorly managed companies who have in the past returned huge dividends in the boom time and have been able to take full advantage of regulations slanted heavily in their favor. Suddenly the market is not so favorable and the big bad world is out there waiting where government and regulatory protection have no jurisdiction. Only well managed and soundly structured institutions will survive the current crisis. Anyone who has had dealings with either of these companies will know that Amlak and Tamweel have neither of these attributes.

What will this merger produce? A short term boost in their share price and a merger resulting in one large poorly managed company with shaky foundations that may well fall in a heap if the current situation continues. Maybe I am reading too much into it but still food for thought.

Does anyone know where one stands with Islamic finance when the finance company goes bust?

Gulfnews: Negotiations: Steering panel set up

Totally unrelated to property, but:

The last thing the American people, and the world, need is another 4 to 8 years of right wing Republicans running around trying to force sovereign nations into becoming democratic. This at great cost to the American taxpayer.


Now on to property. At least a 50% correction in Dubai's high cost areas. Those areas with prices of 3000 to 4000 dirham/sq.ft. are going to get crushed in the correction. Anybody who paid more than 1200 to 1500 dirhams/sq.ft. for high end apartments or 800-1000/ sq.ft. for villas will lose money in the correction. If they are living in them and taking the allowance long term then it's not that bad.

Those who bought early at reasonable prices and are now leasing out their units are making a phenomenal return on investment. Those who were/are smart enough to sell prior to the correction have made phenomenal money.

Half the buildings launched in Ajman will never get built. RAK is a worthless investment unless you want to live there. Abu Dhabi is suffering a housing shortage and should hold up pretty well for the next few years

As with all bubbles; the steeper the run up, the steeper the fall.



Typhoonpilot

OK, I'm confused.

The crisis happened because banks loaned money that they didn't really have to people that couldn't really pay back. The banks knew this or they would not have given these loans a specific name, then marketed these loans to those that would have under normal circumstances not qualified for bank loans........

So now the really good part.....

This thing went bust....(BIG SURPRISE).

Now the US Government bails these banks out to the tune of 700 billion $$$. (Assuming that there are 140 million tax payers, that works to 5000.00 $ for every tax payer in the US.) This money (700 billion), is as I understand, only to get rid of bad debt. Where does the money come from to make new loans.

If I ran my household finances like this, I would be arrested and put in jail.......

On a separate note. With 305 million people in the US. The best two citizens that can be found to run the country happen to be McCain and Obama...........This to replace Bush.........Doesn't say much , does it......

Personally, I think this is what the government fears most- that people (the average man in the street) will wise up to how the system works, and what has happened to get to this point.

Money is a concept. Credit is created. It is a concept.

Goods, labour, physical assets; real. Money and credit; concepts. They facilitate commerce.

Yes, it is interesting how what one man does gets him a retirement on a yacht in the Bahamas, and another doing the same thing gets bankruptcy and jail.

Dubai, well, they rely on what exactly? The making of identical twin camels (truly), and a few other odds and ends. They don't sell oil, which is just as well as that commodity is heading south. They don't manufacture goods for a domestic market, so no assistance there. Lot of tourists, but when money is scarce...

Some jokers talk about bad government, meaning to say Republicans, when the reality is the housing crisis was created by Clinton in forcing banks to open up to non-creditworthy people, namely, Hispanics and African Americans (oops, lower socio-economic folks). Read up on Roberta Achtenberg, the whiz civil rights activist/lawyer who became Assistant Secretary for Fair Housing and Equal Opportunity at the Department of Housing and Urban Development (HUD) under Mr Bill Clinton.

But wait, this is about whether Dubai is in a fix, right?

The reality is we are all in the ****e so deep it's not confined to Dubai or the USA or even that oddball, Mensaboy. God, what an ego. Moving on...read up on credit fault swaps, and how enormous the overhang there is. Way back in 2001, they all but didn't exist. A mere seven years later, CDS amount to a mighty $60 trillion. That's right, trillion dollars, not billion. The USA's GDP for 2007 a mere $13 trillion, so we're talking about a problem that $700 billion in bailouts for banks won't even begin to make a dent in.

Is Dubai in trouble?

We all are, and that's not subjective. Credit default swaps are used as insurance against default when the distressed asset, usually a bond, should be sold outright because of its junk status. In other words, there are more than $60 trillion worth of distressed assets out there that will tank to nothing, just like AIG, and soon, now that every bank this side of the sun is being made acutely aware of how the market can no longer support the level of debt overhanging the wider market.

Hope that's not too much to digest.

Not wishing to be confrontational, just merely curious (or maybe simplistic); assuming all the money and wealth (generated over millenia) has not been spirited away by aliens, my question still stands; who has got it now? China? India? The Mafia? Al Quaeda? Money does change hands after all.

Seems to me there may be some global hidden agendas at work here. Lot of media chat in some quarters about the imminent downfall of the western system (aka the US inspired democratic/capitalist way of doing things). May need looking into. If the model is about to fail, then we had better all pay attention. Or perhaps it's a case of the Roman gladiator chant - " Eat drink and be merry, for tomorrow we die...". In the case of the USA, it certainly seems like a willingness to pass the problems on to later generations to solve.

Money and wealth are two very different things. "Money" changes value constantly- witness exchange rates. It can certainly be spirited away by "aliens"- witness Zimbabwe. Zim is actually a good way to think about the topic. You may have some Zim "money", but what do you actually have, one day to the next? Money only has value if you think it does. It is a means of lubricating commerce.

Likewise the property market- it relies heavily on confidence. Something I was taught by a wise man when I was young: Land appreciates, buildings depreciate.

Amen to that, and just do you think is actually giving Obama his economic advise, That's right Mr. Franklin Raines who presided over Fannie Mae and helped precipitate this God awful mess we find ourselves in now.

Also on the team are Harvard educated economics professors David Cutler and Jeffery Liebman, who also "Surprise Suprise" worked for Bill Clinton in his administration.

Anyone who thinks the Dummycrats are going to lead the US out of this mess, truly need to do some homework to find out how this crap started in the first place.

Rant over.
Let the beatings begin :eek::eek:

Reality bites for Dubai property market boom....
 

This link is over a week old, an eternity in the current economic climate:

Reality bites for Dubai property market boom - Times Online

Share indexes continue to sink worldwide as US and UK bailout plans fail to buoy the markets.

Dubai and the UAE will see the decline in tourism and investment from those countries most effected, Europe/USA. Businesses will close as they consolidate and reduce costs. Local companies such as EK will see a fall in pax numbers and therefore yields. Recruitment has all but stopped.

It will take many months to feel the full effects of the global economic Tsunami... but we're all going to get soaked wherever we are.

I wonder where all of this leaves FlyDubai? On another thread there are reports of them stopping interviews, does not seem to be a great time to start a new airline..or does it?

Considering AIG was one of the foremost institutions providing financing for aircraft then it might be a little harder now to find the funds for 57 aircraft.

Fly Dubai and EK depend on the constant expansion of the UAE and its economies so if they do slow as we suspect then the effects will be felt directly by them.

Hysteria hits Gulf markets...
 

"GCC bourses shed $150 billion of capitalisation in three days"

7Days today.

Dubai financial market dropped 5.14%, its lowest level in two years with Abu Dhabi securities down 4.6%. Emmar especially hit dropping a further 2.14% following earlier losses.

Brace, brace.

Well, Maroons doomsday prophecy will at least help the accomodation mess. Villas will become abundant and so cheap to lease, that everyone will get theirs in weeks from now. They'll even start accomodating the FlyDubai guys, instead of paying them 170k ...... :ugh:

It's not a prophecy, it's happening.

BBC NEWS | World | Middle East | Arab shares see partial recovery

Your not that stand-up comedian who was the Irish Village the other month? :ok:

It IS doom and gloom. Most (so called) experts agree that the world is already in a recession and the best case scenario is to avoid a depression. If they truly were experts, they should have been predicting this for years.

It was less than a year ago that these experts were saying China had to control it's 'out of control' growth, for their own good. Well that is happening. although not in the best way.

I still stand by my assertion that Dubai is one of the best places in terms of financial security. The GCC countries have a combined 2.3Trillion dollars in reserve. When coupled with the relatively low populations, that number becomes even important. The governments in the GCC also have the ability to react in a unilateral and rapid manner, and hopefully they will institute the correct policies (not a foregone conclusion) At least they have the capability to weather the storm, something that is being questioned of many other countries around the world.

I thank my lucky stars that I came to Dubai and EK. If not, I would be sweating bullets back home (or already redundant) This financial mess will certainly affect Dubai but I am convinced that it will not be to the extent it will damage most places.

If people no longer make big bucks on property in Dubai, then that is far less suffering than I predict for developing and developed countries. In fact, a decline in property value should benefit most residents of Dubai. (Disclosure; I own property in Dubai) The bursting of the bubble was inevitable, it has only been accelerated by this financial crisis.

Good post mensa - I cannot think of another country where it will be better to ride out the coming storm.

The GCC have a budget surplus of Billions of Dollars - compared with the massive (and growing) budget deficit's in most other parts of the world, if any place is going to survive in a fairly calm manner then this is it.

Of course what also helps is that the government controls practically every aspect of life here - so can take actions that other countries can only dream of.

I would also point out that the 'experts' were saying only a month ago that oil would never go below $100 a barrel and some were forecasting $200 by the end of the year.....................:rolleyes: