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Deadbeat Dubai $60B Loan Wolf

DUBAI, United Arab Emirates -- Just a year after the global downturn derailed Dubai's explosive growth, the city is now so swamped in debt that it's asking for a six-month reprieve on paying its bills -- causing a drop on world markets yesterday, and raising questions about Dubai's reputation as a magnet for international investment.

The fallout came swiftly after a Wednesday statement that Dubai's main development engine, Dubai World, would ask creditors for a "standstill" on paying back its $60 billion debt until at least May.

The company's real-estate arm, Nakheel -- whose projects include the palm-shaped island in the Persian Gulf -- shoulders the bulk of money due to banks, investment houses and outside development contractors.

WHITE ELEPHANT: Critics say Palm Jumeirah, a manmade group of islands, is emblematic of Dubai's financial overreach. It wants a reprieve on its $60 billion debt.

In total, the state-backed networks nicknamed Dubai Inc. are $80 billion in the red, and the emirate needed a bailout earlier this year from its oil-rich neighbor, Abu Dhabi, the capital of the United Arab Emirates.

Markets took the news badly -- with the Dubai woes giving investors twin worries.

In Europe, Britain's FTSE 100, Germany's DAX and the CAC-40 in France opened sharply lower. Earlier, in Asia, the Shanghai index sank 119.19 points, or 3.6 percent, in the biggest one-day fall since Aug. 31. Hong Kong's Hang Seng shed 1.8 percent, to 22,210.41.

"Dubai's standstill announcement . . . was vague, and it remains difficult to discern whether the call for a standstill will be voluntary," said a statement from the Eurasia Group, a Washington-based research group that assesses political and financial risk for foreign investors interested in Dubai.

"If it is not, Dubai World will be going into default, and that will have more serious negative repercussions for Dubai's sovereign debt, Dubai World and market confidence in the UAE in general."

Dubai became the gulf's biggest credit-crunch victim a year ago. But its ruler, Sheik Mohammed bin Rashid Al-Maktoum, had continually dismissed concerns over the city-state's liquidity and claims it overreached during the good times.

When asked about the debt, he confidently assured reporters in a rare meeting two months ago that "we are all right" and "we are not worried," leaving details of a recovery plan anybody's guess.

Then, earlier this month, he told Dubai's critics to "shut up."

"He needs to produce a recovery plan that will be respected by those who want to do business with Dubai," said Simon Henderson, a gulf and energy specialist at the Washington Institute for Near East Policy. "If he does not do it right, Dubai will be a sad place."

Read more: http://www.nypost.com/p/news/international/deadbeat_dubai_loan_wolf_NOPYXXubSM9PHeaPOGQyrI#ixzz0Y4st71NQ


Click to view image: '066afd05a8a5-dubai.jpg'

Added: Nov-27-2009 
By: SouthParkIndie
In:
News, Middle East, Other
Tags: UAE, Dubai
Views: 10796 | Comments: 28 | Votes: 2 | Favorites: 0 | Shared: 1 | Updates: 1 | Times used in channels: 1
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  • Hopefully this Islamic trash nation will sink into the sea as a result of the massive empty hole it sits on top of :P

    Posted Nov-27-2009 By 

    (7) | Report

  • House of CARDS....LOL

    it don't look good... soon to be an empty city..LOL

    Posted Nov-27-2009 By 

    (6) | Report

  • how ironic isn't it

    Posted Nov-27-2009 By 

    (5) | Report

  • Dubai.....LOL What a retarded IDEA...

    their Airport will be the largest in the world,
    it will be able to move 140million people a year, but
    you can't get a beer....LOL

    they only have 2.2 million people and 800K of them are corrupt businessmen from elsewhere, and they pay asians $10 per day ... LOL

    Posted Nov-27-2009 By 

    (3) | Report

    • Comment of user 'bigpoppakahn' has been deleted by author (after account deletion)!
  • stupid wealthy sheeps

    Posted Nov-27-2009 By 

    (3) | Report

  • well dern - another waterworld flop.

    Posted Nov-27-2009 By 

    (1) | Report

  • This is not good.

    Posted Nov-27-2009 By 

    (1) | Report

  • Maybe it was because they spent billions on making fake islands. Who would want to live in a desert to begin with???

    Posted Nov-27-2009 By 

    (1) | Report

    • I would not mind the desert.
      I spent some time in Dubai and had fun.
      But those friggin rules about everything.
      Get tossed in jail for anything fun and sometimes for stuff that you did not even know you were doing wrong. Even kissing your chick in public is not cool there.

      Posted Nov-27-2009 By 

      (3) | Report

    • Come on mate, anything goes in Dubai.
      Very hypocritical place, supposedly its a muslim city etc. however literally anything goes as long as its not done in the street, or on the beach!

      Posted Nov-27-2009 By 

      (1) | Report

  • I wanna go on vacation to be repressed!

    Posted Nov-27-2009 By 

    (1) | Report

  • Yes, finally! Dubai is getting what it deserves for creating an illusion. Dubai is a dystopia & a showpiece to trick the West & Free World into thinking that life under islam is good. It's not - it's far worse.

    Posted Nov-27-2009 By 

    (1) | Report

  • the liberals will blame it on Haliburton, because they had their main LOGCAP office there..

    Posted Nov-27-2009 By 

    (0) | Report

    • Haliburton... aren't they those nice men we pay millions to, so they can electricute our soldiers...

      I wonder how many 100s of millions they have stole from the american people.....LOL

      Posted Nov-27-2009 By 

      (1) | Report

  • It's kind of sad that they spent all that cash trying to corner the tourism market and are now in trouble. It does not send out a good message for other states in the area who may want to move away from reliance on dwindling oil stocks.

    Posted Nov-27-2009 By 

    (0) | Report

  • I think it's funny a bank askink for a reprieve from it's debt. How many of us do you think they would give a reprieve too on a debt owed too them?

    Posted Nov-27-2009 By 

    (0) | Report

  • The coming commercial and foreign real estate crash that will hit in the next five years will make the US mortgage bust seem like good times in comparison. The idiots in Dubai showed zero restraint in their growth, no environmental impact reports, no real credit checks, nada.

    Posted Nov-27-2009 By 

    (0) | Report

    • Tens of thousands abroad have brought flats in Dubai which were never even built, but no money back!

      In the end the other Emirates will bail them out

      Posted Nov-27-2009 By 

      (1) | Report

  • Comment of user 'knowsmuslims' has been deleted by author (after account deletion)!
  • Why did Citi Bank lend them 60 billion dollars with their bailout money. Actually our taxpayers money.

    Posted Nov-27-2009 By 

    (0) | Report

  • na! they have defauled so send in the balifs!.... hmmm whilst ya at it get me one one them Sunseeker's and gold thats going spare!

    Posted Nov-27-2009 By 

    (-1) | Report


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