Saturday, November 28, 2009

Deciphering Dubai's Default

What it brings to mind is a colleague who'd made a downpayment on a property in Dubai. The builder later reneged and returned the downpayment because he'd found other buyers willing to pay much more for something that hadn't been built. Who's crying now?

1. Tyler Cowen

2. Paul Krugman

3. BBC's Stephanomics

4. Simon Johnson

My conjecture is that Abu Dhabi is just standing by waiting for the fire sale. The debt holders are ready to sell out to Abu Dhabi at a heavy discount. To complete projects Dubai needs money, lots of it. There's no bankruptcy court de jure. But Sheik Khalifa will offer Sheik Mohammed an ironclad annuity in exchange for ownership and control of the assets and for defacto political control as well. It's all going according to plan.

2 Comments:

Blogger Keefieboy said...

Little bit cynical, John? Prolly right though.

1:51 AM  
Anonymous Anonymous said...

Who's Sheikh Khalid?

3:00 AM  

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