Could the implosion of Dubai be the joker that brings the whole house of cards down??
And are Geithner and Bernanke frantically discussing ‘too-big-to-fail’ measures to try to plug this hole in the dam??
(And did I just use up my ‘mixed metaphors’ quota for the day??)
--Willaim Safire (attributed), amended by Sid Sodnagel
The “hole in the dam” comment was the straw that broke the camel’s back. Stop beating the dead horse, you’ve played your hand.
60 billion in debts spread around the world. i believe they offered like 80 cents on the dollar making a 12 billion loss,again,spread around the world.
Also,important on debt restructuring,say you accept 80 cents in new debt for your old debt. A coupon of 5% over 5 years on the new paper gets you back to 100%. (5% x 80=4) You may have made nothing,but you’re whole again. There have been plenty of trades where being made whole is better than the alternative.
Iduhnoh... it seems $60 billion in bad debt is just chump change these days!
Dubai was doomed to fail and that should be a lesson for "service economies" everywhere. Unlike its neighbors, Dubai is oil-poor. They bought prosperity by borrowing excessive sums of money and enticing unlucky poor neighbors to become slaves and enticing the world's rich to spend vast sums of money there as tourists.
The thing that should be, but probably isn't, scary to most of the people here is that Dubai is the last remaining secular middle eastern nation. If or when the government falls, it will be replaced with a religious one.
I wasn't allowed to post this as a regular article, but please read The Dark Side of Dubai.