Dubai's threat to U.S. banks

CNN ^ | 11/27/09 | Les Christie,

[FromLori]

The news that the sovereign wealth fund of Dubai requested a postponement of billions of dollars of debt this week could pose a big problem for U.S. banks.

The state-run investment company, Dubai World, owes about $60 billion. It rang up much of that in a building boom that included the world's tallest skyscraper and the Palm Islands in the Persian Gulf, settlements shaped like palm trees.

According to CMA DataVision, which tracks credit markets, there's a 35.82% probability that Dubai will default on that debt.

What is Dubai World? - CNN New York-based Citigroup (C, Fortune 500) has the most exposure to default risk at Dubai World, which a J.P. Morgan (JPM, Fortune 500) equity research note estimated at $1.9 billion. Citigroup declined to comment.

While other major banks in the United States are believed to have little direct exposure, the ripple effect could be more crippling, according to Richard Bove, a bank analyst with Rochdale Securities.

"There could be huge indirect exposure," he said. "One has to assume that U.S. banks will be hurt."

[FromLori]

ping

http://www.economicpolicyjournal.com/2009/11/bofa-dubai-woes-may-reach-sovereign.html

[EGPWS]

Keep an eye on Greece and Vietnam for more signs of trouble.

Actually, I have been focused on Washington D.C. exclusively for signs of more trouble.

It's the instigators of issues not the reactors of them that are concerning.

[org.whodat]

The state-run investment company, Dubai World, owes about $60 billion.

No problem, I'm sure AIG has them insured!!!! Matter of fact I would bet on it!!!

[Oatka]

The equivalent of the Archduke being shot?

[FromLori]

What You Would Need to Understand to Know Who Has Exposure to Dubai World's Nakheel Dubai World's Nakeel Development Ltd which is at the core of the recent delay in debt payments is a workout lawyers dream. This is the flow chart you would have to understand to know who really has exposure to Nakeel (never mind what is going on in the rest of Dubai World): http://www.economicpolicyjournal.com/2009/11/structure-of-dubai-worlds-nakheel.html

[count-your-change]

I suppose the sand that Dubai put up as collateral for the loans has dropped in value. No problem, there’s still some cheques left in the pad.

[FromLori]

Those dubai people are nothing but scumbags!

http://www.independent.co.uk/opinion/commentators/johann-hari/the-dark-side-of-dubai-1664368.html

http://www.independent.co.uk/opinion/commentators/johann-hari/johann-hari-a-morally-bankrupt-dictatorship-built-by-slave-labour-1828754.html

http://ftalphaville.ft.com/blog/2009/11/26/85506/im-a-celebrity-get-me-out-of-dubai/

[count-your-change]

You should try to like them, they've become our financial partners. Maybe instead of paying back the loans they can give away vacations on that hideous pile of rocks they built. Alcatraz with a smiley face.

[FromLori]

Slave owner muslims nothing more and how anyone ever thought it was a good idea to do business with them is beyond me.

http://www.independent.co.uk/opinion/commentators/johann-hari/johann-hari-a-morally-bankrupt-dictatorship-built-by-slave-labour-1828754.html

http://www.independent.co.uk/opinion/commentators/johann-hari/the-dark-side-of-dubai-1664368.html

http://www.telegraph.co.uk/finance/breakingviewscom/6664618/Dubai-creditors-have-little-option-but-to-accept-the-hand-theyve-been-dealt.html

and that bailout to the banks funds sharia banking as well

http://atlasshrugs2000.typepad.com/atlas_shrugs/2008/12/aig-your-taxpay.html

[Bon mots]

Brilliant Job by the Obamunists to give more US money to Arabs. Obama gave $45 Billion to bail out Citibank, and now they will need to be bailed out again.

Of course, they gave over a half million dollars to the Obama camp.

Obama has surrounded himself by financial ‘wizards’ who were knee-deep in the buildup to the current financial crisis, including Rahm Emanuel and Timothy Geitner - both of whom were instrumental in leading the US Financial System over the edge.

Our Treasury Secretary, Geithner, was named president of the Federal Reserve Bank of New York... ample time to see a crisis coming...

Since 2006, he was also a member of the the Group of Thirty

In May 2007 he worked to reduce the capital required to run a bank.

You have to think that these guys are destroying the US financial system on purpose.

[Bon mots]

Maybe they can blame this brilliant move on Summers, who managed to lose $1Billion for Harvard’s endowment gambling on credit swaps?

[FromLori]

I sure do believe they are and don’t forget all government sachs donations to obama and they stand to make $$$ on crap and tax also obama wants to give the fed more power.

[FromLori]

Summers another scumbag

http://www.salon.com/opinion/greenwald/2009/04/04/summers/

http://www.opensecrets.org/orgs/list.php?order=A

http://www.businessinsider.com/goldman-sachs-changes-its-status-to-financial-holding-company-2009-8

http://www.salon.com/opinion/greenwald/2009/04/04/summers/

http://www.forbes.com/feeds/ap/2009/08/19/business-financials-us-goldman-sachs-lobbying_6795197.html

http://federalism.typepad.com/crime_federalism/2009/07/
barack-obama-expands-goldman-sachs-power.html

http://www.ritholtz.com/blog/2009/03/backdoor-bailouts-for-goldman-sachs/

http://www.noquarterusa.net/blog/2009/07/02/will-cap-and-trade-be-the-next-bubble/

[lt.america]

Hopefully Bill and Hillary already got paid. Something tells me if a Republican former president had business dealings with Dubai in the form of high-priced well connected lobbying, we would not soon hear the end of it given the potential default. But, since the MSM no longer believes in pointing out the obvious, we won’t hear a word.