
Furious investors warn troubled Dubai it will 'never raise a penny again' - fiaz
http://www.guardian.co.uk/world/2009/nov/29/investor-fury-dubai-crisis
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rbanffy
Any investor who decides furiously will not remain an investor for long.

OTOH, I can't imagine what sane person would invest there. Can't they tell a
bubble when they see it?

~~~
omarish
Investors can tell a bubble when they see it, but we must consider that
hindsight is 20/20 in these situations. And perhaps investing in a bubble is
okay, just as long as you get out at the right time?

A lot of the press makes this look like the end of the world. I don't want to
make a hasty comparison, but let's contrast it to the $700bn dollar bailout
that we saw earlier in the States .. $60bn exposure isn't quite as bad as it
seems.

The question is in underlying value. Aside from the world's speculation and
the good word of the ruling family, there isn't so much backing Dubai. AFAIK,
nobody owns a huge share of the markets, just the royal family.

At the same time, it doesn't take much to apply some startup thinking to Dubai
-- put a couple people together with some good ideas on how to shape the
markets there, and Dubai could look drastically different 24-36 months from
now. Islamic Finance could be an interesting starting point.

Dubai will be very interesting as soon as all of this smoke clears up.

~~~
adatta02
It seems like the real shock to the world markets was that Abu Dhabi stood
quiet instead of immediately stepping in to guarantee at least some of the
money.

It happened before <http://online.wsj.com/article/SB123532630416442781.html>
so why not again?

~~~
omarish
Dubai and Abu Dhabi haven't always had the best relations - they're both
Emirates but that doesn't mean that they agree on everything. Fiscal policy
could very well be in this set of things.

<http://news.bbc.co.uk/2/hi/middle_east/8382275.stm> \- have a look through
the section titled "Competition".

Also, oil is relatively inexpensive right now. Abu Dhabi exports a lot of oil.
I don't want to risk making a false correlation, but that could have something
to do with it.

~~~
evgen
There is definitely the fiscal policy aspects (Abu Dhabi has good reason to
let Dubai and its backers know that it will not necessarily bail them out) and
there are also socio-cultural aspects as well. Abu Dhabi is much more
conservative than Dubai and there is some friction there that is getting
magnified by the financial aspects.

------
jaydub
I read The Ascent of Money, by Niall Ferguson over the summer and I am
reminded of a passage discussing Argentina:

"So successful did Argentina's default prove (economic growth has since surged
while bond spreads are back in the 300-500 basis point range) that many
economists were left to ponder _why any sovereign debtor ever honours its
commitments to foreign bondholders_ "

[http://books.google.com/books?id=JA_IYJ0P4ZkC&lpg=PA4...](http://books.google.com/books?id=JA_IYJ0P4ZkC&lpg=PA4&dq=niall%20ferguson%20safest%20default&pg=PA115#v=onepage&q=&f=false)

