Friday, November 27, 2009
Bloomberg: Dubai Crisis May End in 'Major' Default, BofA Says
Dubai's debt woes may worsen to become a "major sovereign default" that roils developing nations and cuts off capital flows to emerging markets, Bank of America Corp. said.
"One cannot rule out -- as a tail risk -- a case where this would escalate into a major sovereign default problem, which would then resonate across global emerging markets in the same way that Argentina did in the early 2000s or Russia in the late 1990s," Bank of America strategists Benoit Anne and Daniel Tenengauzer wrote in a report.
A default would lead to a "sudden stop of capital flows into emerging markets" and be a "major step back" in the recovery from the global financial crisis, they wrote.
Emerging-market stocks around the world have slumped for two days on concern a debt restructuring by Dubai World, with $59 billion of liabilities, will add to the $1.72 trillion of losses and writedowns from the global credit freeze. The MSCI Emerging Markets Index fell 1.9 percent to 940.30 as of 1:55 p.m. in New York, extending this week's decline to 2.6 percent.
Dubai, which borrowed $80 billion in a four-year construction boom to transform its economy into a tourism and financial hub, suffered the world's steepest property slump in the recession. Home prices fell 50 percent from their 2008 peak, according to Frankfurt-based Deutsche Bank AG...
Slave labor only takes you so far:
Do you know where your bailout money went? From back in March: US outrage over Citi loan to Dubai
The US public will be "outraged" by Citibank's $8 billion loan to Dubai just six weeks after the bank was bailed out, US House of Representatives domestic policy subcommittee chair-man has said. Dennis Kucinich commented on the Dubai loan and other US banking investments as a congressional panel released a report that strongly questioned Citibank's actions. The report, shown to 7DAYS, cites the Dubai loan as the largest of the "questionable transactions" by banks after the US government bailed them out. It notes that the loan to Dubai's public sector came on December 14, just six weeks after the US government gave Citibank a $25 billion bail-out.
The report quotes Win Bischoof, then chairman of Citi, as saying the bank agreed to the Dubai loan because "we continue to place the Gulf region among our globally most significant markets"...
when talking about dubai financial problems...which any nation could face includind new york ( a place that was slumps before) adam smith and his thoughts are ignored and replaced by a barbaric view of economics. no prudence whatsoever in those articals
if city bank wants its money with interset back instead of sand these writings should stop.
the best thing about all of this is that dubai announced it wont pay the debts when its markets closed......so all world markets stumbeld except dubai, and the more these type of articals the more the western markets will flaten..while dubia markets are closed for eid.....this is called desert ecenomics from dubai.
Sounds like the West shouldnt get involved with arseholes that never made it out of the desert.
heikh Mohammed bin Rashid al-Maktoum, the ruler of Dubai, today criticised international investors' reaction to the Emirate's debt crisis, claiming: "They do not understand anything".
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the world media rage on dubai is for what?
first it was slaves....sharie crackdowns...and know debts.
so arabs listen either you are muslims or capitalist....they hate you.
so the best thing is tret them as loosers and jelouse people.
dubai is a lcity that didnt kill thousands or steal land.....it just tried to develope. wsj....timesonline......and the one behined them. your religon exopses you!