Comments on: Dubai World: A great precedent http://blogs.reuters.com/felix-salmon/2009/11/26/dubai-world-a-great-precedent/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: Alan Furth http://blogs.reuters.com/felix-salmon/2009/11/26/dubai-world-a-great-precedent/comment-page-1/#comment-9279 Fri, 27 Nov 2009 23:10:28 +0000 http://blogs.reuters.com/felix-salmon/2009/11/26/dubai-world-a-great-precedent/#comment-9279 I agree. Anyone with a minimum of common sense would have seen that Dubai World’s baroque business plans were doomed. But because the government was supposed to be backing it up, the speculators went for it. It is definitely a healthy precedent that will instill a bit of sanity into the emirate’ future economic planning, and will balance the surreally sugar-coated image that it built through its marketing machinery.

]]>
By: ferd http://blogs.reuters.com/felix-salmon/2009/11/26/dubai-world-a-great-precedent/comment-page-1/#comment-9266 Fri, 27 Nov 2009 17:33:52 +0000 http://blogs.reuters.com/felix-salmon/2009/11/26/dubai-world-a-great-precedent/#comment-9266 To the short list of bankers who screwed everything up, we’re handing the equivalent of the combined capital of Microsoft, Apple, Google, Exxon, and possibly far more, and saying, no problem, just promise that you’ll be smarter this time around.Are we doing this because those very few bankers are saying, behind the scenes, that they know where even more financial bombs are buried, and they’ll let them explode if we don’t bail them out?

]]>
By: Sprizouse http://blogs.reuters.com/felix-salmon/2009/11/26/dubai-world-a-great-precedent/comment-page-1/#comment-9265 Fri, 27 Nov 2009 17:25:24 +0000 http://blogs.reuters.com/felix-salmon/2009/11/26/dubai-world-a-great-precedent/#comment-9265 Felix, I wish you’d think of the people in Dubai before claiming it would be good for sovereign defaults to happen more often.It might be acceptable for a default to happen in a democracy but not in an oligarchy. Remember Russia in 1996? LTCM lost billions because, unlike George Soros, they didn’t understand that an oligarchy actually BENEFITS from a default and is, therefore, more likely to default on its debt.Dubai is, for all intents and purposes, an oligarchy. No different than Russia in 1996 (and now). And just like Russia’s default, when the oligarchs didn’t want to pay back the money they’d borrowed, Dubai and Abu Dhabi might default too. When Russia did it, it threw the rest of the country into an economic crisis and a total mess while the oligarchs lined their pockets with cash.Ask the people Russia what benefit they got from the sovereign defaults and they’ll say none. Ask the Russian Oligarchs and they’ll say millions (if not billions).

]]>
By: Volker Hetzer http://blogs.reuters.com/felix-salmon/2009/11/26/dubai-world-a-great-precedent/comment-page-1/#comment-9263 Fri, 27 Nov 2009 16:20:02 +0000 http://blogs.reuters.com/felix-salmon/2009/11/26/dubai-world-a-great-precedent/#comment-9263 Re “implicit sovereign guarantee”:In what way is this different from “too big to fail”?

]]>
By: Christopher http://blogs.reuters.com/felix-salmon/2009/11/26/dubai-world-a-great-precedent/comment-page-1/#comment-9261 Fri, 27 Nov 2009 16:07:57 +0000 http://blogs.reuters.com/felix-salmon/2009/11/26/dubai-world-a-great-precedent/#comment-9261 Hasn’t DW or some of its subsidiaries issued sukuk? IIUC, those are Shariah-compliant instruments not exactly ‘bonds’ in the western sense. They earn interest that isn’t exactly interest.Anyway, couldn’t this complicate the litigation that will surely result from any default?

]]>
By: f belz http://blogs.reuters.com/felix-salmon/2009/11/26/dubai-world-a-great-precedent/comment-page-1/#comment-9260 Fri, 27 Nov 2009 16:06:41 +0000 http://blogs.reuters.com/felix-salmon/2009/11/26/dubai-world-a-great-precedent/#comment-9260 Aha. Just another example of “Easy to Borrow, but not so easy to pay back”. You can hire all the MBAs that you want to and Accountants to count the beans, but having to manage a business and when to know the direction to take is another matter. Those kind of decisions take a lot of thought and a lot of “NOT LISTENING TO THE MONEY LENDERS”. I do not know how many developers in the United States that I have seen go down this road, but probably not on quite this grand a scale. It will be a pretty rough road, and they might even survive.

]]>
By: Skumar http://blogs.reuters.com/felix-salmon/2009/11/26/dubai-world-a-great-precedent/comment-page-1/#comment-9259 Fri, 27 Nov 2009 15:50:21 +0000 http://blogs.reuters.com/felix-salmon/2009/11/26/dubai-world-a-great-precedent/#comment-9259 In Dubai, There is a practice that one would end up in jail for not paying your debt.Think about Dubai world!!!.

]]>
By: Blake Goud http://blogs.reuters.com/felix-salmon/2009/11/26/dubai-world-a-great-precedent/comment-page-1/#comment-9258 Fri, 27 Nov 2009 15:50:00 +0000 http://blogs.reuters.com/felix-salmon/2009/11/26/dubai-world-a-great-precedent/#comment-9258 I went through the entire offering circular several months ago, which included that diagram of the transaction and I wrote a short blog post at the time, which might be interesting for those who don’t want to dig through the offering circular:http://blogs.zawya.com/blakegou d/090506063401/

]]>
By: The Bell http://blogs.reuters.com/felix-salmon/2009/11/26/dubai-world-a-great-precedent/comment-page-1/#comment-9250 Fri, 27 Nov 2009 15:05:43 +0000 http://blogs.reuters.com/felix-salmon/2009/11/26/dubai-world-a-great-precedent/#comment-9250 It might be a coincidence that Halliburton moved to Dubai and within two years the whole place plunges into economic disaster. Then again, that’s more or less the same effect they had on U.S. society. Not to mention Iraq.

]]>
By: Mathew Thomas http://blogs.reuters.com/felix-salmon/2009/11/26/dubai-world-a-great-precedent/comment-page-1/#comment-9249 Fri, 27 Nov 2009 14:41:52 +0000 http://blogs.reuters.com/felix-salmon/2009/11/26/dubai-world-a-great-precedent/#comment-9249 The economic ”swine flu” has just hit the middle east. The greedy of the world thought the good times would last forever. They overproduced everything, but curtailed the production of oil that led to its high price and one way flow of money to oil producing countries, which is the root cause of the world economic crisis. There is no easy solution to the great depression of this century.

]]>