A MOST EXPENSIVE PARTY LAUNCH. BUT THE PARTY’S OVER.

 

1. I have afeeling that subsequent to the most recent article the government of the UAE stepped in and bailed them out. The thing about these countries is they don’t actually make anything. In some respects they have tried to change their dependance on oil revenue. Inevitably the oil is going to run out and with it their lifestyle. However all they have to offer is tourism and loaning back the money we paid them for the oil. It is a risky business. If tourism drops due to a recession then bang goes your income. If governments default on paying interest then bang goes that revenue stream as well.

   In many respects the problems in Dubai mirror those in the UK and the US. For years there has been an asset bubble encouraged by morons like the Beckhams buying million dollar apartments. All of a sudden the bottom falls out of the market and these fools want to try and sell their apartments but no one is buying. I doubt Dubai will collapse but by the same token I doubt it will become the Hong Kong of the middle east either. The arabs don’t have a Chinese work ethic and are happier to sit back and try and take money for nothing. All the time they had petro dollars pouring in it worked well. Now not so much.

   Posted by LyndonB       01/12/2010  at  06:12 PM  

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