Monday, November 30, 2009

Dubai is in a deep financial crisis

Dubai crisis began when the emirate announced that Dubai World would delay payment on debts for part of the USD59 billion in debt issued by Dubai world.

The causes:

i. the collapsing real estate prices
ii. Over-ambitious development plans, including artificial islands in the shape of a palm tree
iii. Spent heavily to acquire stakes in glittering properties like Barneys in New York and the MGM Mirage in Las Vegas.


i. The emirate economy is in a bad state
ii. Banks stopped lending
iii. Emirate stock market has plunged 70%.
iv. Luxury hotels are three-quarters empty
v. Shopkeepers in newly built malls are facing substantial drop in sales.
vi. Houses and cars are for sale everywhere
vii. property sale drop
viii. 50% of all the UAE’s construction projects, which are worth about USD582bn have either been put on hold or totally cancelled
ix. a huge trail of semi finished towers on the outskirts of the city stretching into the sandy desert.


i. Worry and a panic in the financial market as banks and financial firms lost in markets across the world
ii. spillover effects centered on fears that international banks could suffer big losses
iii. Economic slowdown and sales fall
iv. at least 25-percent contraction in the job market
v. commodities prices drop
vi. Gold price drops
vii. JPY, USD, and CHF are the big likely winners
viii. AUD, NZD, CAD and EUR would retreat


Anonymous said...

another planned economic crisis?

Anonymous said...

over ambitious