Dubai having issues with its debt

**mojo** · November 28th, 2009, 12:44 AM

The "big" news is really that the UAE is not backing the debt (right now). Everyone has been treating this debt as if were sovereign debt, though in reality it is not. So when the UAE said that it isn't backing this debt, a lot of people got nervous. Not sure if it will have a long term effects or not. No one thought that a little trouble in Thailand would be a big deal http://en.wikipedia.org/wiki/1997_As...nancial_Crisis

**buster2209** · November 28th, 2009, 12:57 AM

I think Dubai is the very definition of over-leveraged!

**Morel42** · November 28th, 2009, 07:24 AM

Dubui is basically a gigantor sized version of Gold Mining towns back in the 1800's..

Valuable resource is discovered, drilled/mined at an insane rate, town booms, resource runs out, and you have dust devils in a few years.

**dc dalton** · November 28th, 2009, 09:44 AM

Just doing some reading about this this morning and I may have been wrong in my 'no biggie' assessment. Seems there are quite a few US banks as secondary investors over there with Citibank being the largest and on the hook for about a billion and a half.

Also read the analysts are saying there's about a 35% chance they will default on the debt.

**Dredly** · November 28th, 2009, 09:47 AM

Originally Posted by dc dalton

Just doing some reading about this this morning and I may have been wrong in my 'no biggie' assessment. Seems there are quite a few US banks as secondary investors over there with Citibank being the largest and on the hook for about a billion and a half.

Also read the analysts are saying there's about a 35% chance they will default on the debt.

Pretty sure they (Dubai) is a huge player in gov't debt as well. I don't know how much US debt they own though