Friday, November 27, 2009

Abu dhabi ding dong

Abu Dhabi expected to prop up smaller brother

Will Abu Dahbi let Dubai fail?

Posted by devo @ 11:32 PM (2012 views)
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12 thoughts on “Abu dhabi ding dong

  • fallingbuzzard says:

    Good question. They can afford to prop them up, but will they? The betting is about 12 to 1 that they’ll let them fail, so quite unlikely. Everyone props everyone else up until someone doesn’t. Thats how sovereign debt works?

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  • fallingbuzzard says:

    Or rather it appears that they are able to prop them up, but noone appears certain that they actually can or will.

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  • little professor says:

    A sovereign default by Dubai would have huge repercussions for the rest of the Emirates, including Abu Dhabi. Unfortunately I think their hand may be forced here, bailout here we come…

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  • Family, how can they not. And reputation.

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  • What Abu Dhabi would do? Arabic brotherhood love has been historically proven rather…err…unreliable. Abu Dhabi probably is not as fond of its cousins as Gordon loves his banker mates.

    The problem is that Dubai is built on an illusion, false economy model. It will keep going bust again and again. And there is no way out. So the question Abu Dhabi is asking itself right now is not whether it should bail out Dubai, it is how many times does it have to bail out Dubai.

    This is bit like deciding how you deal with your cocky unemployed drug addict little brother. Giving him tons of money is not a solution. It only makes things worse in the long term. Send him to rehab and if he can’t sort out his own shxt and dies in his own vomit, well, life is tough. If Abu Dhabi can’t do the tough thing. UAE would look like a typical family ruined by one drug addict – you see plenty of them in this country!

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  • tenyearstogetmymoneyback says:

    Strong opinions there Peter.

    I was simply wondering if the bailout might come with some stringent
    conditions e.g. No skyscapers or new islands until you are getting a decent
    return on the ones already built.

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  • If RBS, as lender-in-chief, have to seek more taxpayers’ support for this – then surely we will have reached a tipping point in the tolerance of even the British public.

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  • The “fear” is that Dubai World may be forced to sell assets around the world – leading to downward pressure on the value of all kinds of “assets”. Continued Abu Dhabi rescues prolong the illusion of value.

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  • nomad

    I think gordon brown had a meeting with the sheik of dubai this week, so I would consider the bailout is already a done deal.

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  • Actually, I think I believe Peter’s view. The Dubai that we have known (whores, shopping, drugs, property speculation etc.) has had a very uneasy relationship with the Islamic natives.

    Love will not be lost if Dubai fails. Reputation might though which is why I suspect Abu Dhabi will come to the rescue for the time being, and on their own terms (i.e. cleaning the place up a bit).

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  • the number cruncher says:

    I have a small contract with Dubai World company – Bugger!

    As much as I want to see they slave exploiting, materialistic scumbags go down – I do not want to have to let some of my staff go if they go tits up.

    I have had another bad debt this week for 13k and I doubt I will see a penny of that.

    Business is getting tough…

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  • The money at stake is not big in arab terms. I think this could be a jerk of the dog-lead to bring the developers into line. Some of the showy ostentation isn’t going down too well with the fundamentalist religeous leaders and that could have a backlash on the middle east governments.

    For footballer punters, they can take the hit without noticing. For other punters Do buy has become Don’t buy.

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