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November 27th, 2009, 12:11 PM #1
Dubai having issues with its debt
http://www.foxnews.com/story/0,2933,577165,00.html
Dubai Debt Fears Remain Focus in World Markets
Friday, November 27, 2009
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AP
Nov. 26: A giant poster of Sheik Mohammed bin Rashid Al Maktoum, UAE Prime Minister and ruler of Dubai is seen in Dubai, United Arab Emirates.
LONDON — European stock markets regained their poise Friday after Wall Street didn't fall as much as feared on the news earlier this week that Dubai is having trouble handling its debt.
Because U.S. markets were closed for Thanksgiving Day on Thursday, they are only reacting now to the fears that Dubai's debt problems may affect the wider financial system.
In Europe, the FTSE 100 index of leading British shares was up 41.30 points, or 0.8 percent, at 5,235.43 while Germany's DAX rose 50 points, or 0.9 percent, at 5,669.84. The CAC-40 in France was 36.85 points, or 1 percent, higher at 3,716.08.
On Wall Street, the Dow Jones industrial average was down 162.71 points, or 1.6 percent, at 10,301.69 soon after the open while the broader Standard & Poor's 500 index fell 19.33 points, or 1.7 percent, at 1,091.30.
Though hefty, the losses in the U.S. paled in comparison to those posted earlier in Asia, when indexes in Hong Kong and South Korea tumbled 5 percent in response to the previous day's Dubai-related losses in Europe.
Confidence about the world economy has been hit hard by the news that Dubai World, a government investment company with around $60 billion worth of debt, has asked creditors if it can postpone forthcoming payments until May. Investors are wondering whether the current uncertainty surrounding the emirate has brought the eight-month equities bull run to an end.
Analysts said more clarity about the long-term impact of Dubai's troubles would likely emerge next week, when Wall Street is back to normal trading hours following the Thanksgiving Day holiday. U.S. markets are only open for half the day Friday.
"It is likely to take at least a few days before the implications of the impact of a possible default from Dubai are properly digested but for the present it seems that the market is seeing this negative news as a blow to the global recovery but not one that will push it off course," said Jane Foley, research director at Forex.com.
Investors were also keeping a close eye on associated developments in the currency markets after the dollar slid to a new 14-year low of 84.81 yen.
However, the dollar climbed back off its lows to 86.74 yen amid mounting expectations that the Bank of Japan may intervene in the markets by buying dollars or selling yen after Japan's finance minister Hirohisa Fujii said he was "extremely nervous" about the movements in the yen and that the "market had moved too far in one direction."
On Thursday, the Swiss National Bank reportedly intervened to buy dollars to prevent the export-sapping appreciation of the Swiss franc. That seems to have worked — for now, at least — as the dollar has moved back above parity, trading 0.9 percent higher at 1.0118 Swiss francs.
The British pound has also been battered amid fears about the exposure of Britain's banks to the region. The pound was down nearly one percent earlier but recovered some ground to be trading only 0.3 percent lower at $1.6475.
Another currency struggling somewhat in the current climate was the euro, which fell 0.5 percent to $1.4943 — in times of uncertainty the dollar is considered to be more of a safe haven currency. Investors are also concerned about the exposure of European banks to Dubai.
Earlier, Asian stocks were particularly badly hit as they played catch-up following the big losses in Europe in the previous session. Hong Kong's Hang Seng closed 1,075.91 points, or 4.8 percent, lower at 21,134.50, while South Korea's benchmark plummeted 4.7 percent to 1,524.50.
Elsewhere in Asia, Japan's Nikkei 225 stock average fell 3.2 percent to 9,081.52 while Australia's index dropped 2.9 percent. China's main Shanghai stock measure was off 2.4 percent.
Indexes in emerging markets have so far avoided a second day of heavy losses, with Russia and Brazil down about 1 percent.
Oil, meanwhile, tracked developments in stock markets and benchmark crude for January delivery fell $3.30 to $74.66 a barrel in electronic trading on the New York Mercantile Exchange
The first vehicles normally on the scene of a crime are ambulances and police cruisers. If you are armed you have a chance to decide who gets transported in which vehicle, if you are not armed then that decision is made for you.
Be prepared, because someone else already is and no one knows their intent except them.
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November 27th, 2009, 12:37 PM #2
Re: Dubai having issues with its debt
And the $hitstorm begins...watch out for the ripples.
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November 27th, 2009, 03:55 PM #3Grand Member
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Re: Dubai having issues with its debt
Question is how will the Government try to spin the bailout package for them? I figure it's along the lines of "stabilizing oil prices" or else we will see 6 dollar gas. I am not saying we will not see increases anyway but if it's anything like our stimulus were screwed. In an attempt to stave off six dollar gas we will get involved and it will reach ten dollars.
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November 27th, 2009, 04:33 PM #4
Re: Dubai having issues with its debt
Big shocker.
Anyone who doesn't know what has been going on over in Dubai should Google it - un-freakin'-real.
It costs a "little" bit of money to create what they have created.
As for it's impact, I haven't a clue, as I'm not a numbers person, but I doubt it's going to be good.I called to check my ZIP CODE!....DY-NO-MITE!!!
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November 27th, 2009, 07:11 PM #5Banned
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November 27th, 2009, 08:30 PM #6
Re: Dubai having issues with its debt
lol they have no oil
The interesting part of the story is that Abu Dhabi (which does have tons of oil) appears not to be helping out. The various Emirates are like one big dysfunctional family.
I would not read too much into this story. Really. Sounds like a power play to restructure their loans. They are talking about 'ONLY" 60 billion which in the scheme of things not all that much.
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November 27th, 2009, 08:33 PM #7
Re: Dubai having issues with its debt
I've been there more than a few times and say what you may they are pretty damn amazing. Afterwards I went sking. No shit....
http://en.wikipedia.org/wiki/Ski_Dubai
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November 27th, 2009, 09:27 PM #8Banned
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Re: Dubai having issues with its debt
sking in the desert.....have they taught camels to ice skate yet
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November 27th, 2009, 09:38 PM #9Banned
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Re: Dubai having issues with its debt
They say Dubai has been the 'poster child' of excess over the past 10 or so years. Their real estate values doubled and tripled in that time (and you thought ours went up) ... it has become the pinnacle of waste, big loans for stupid projects and the home turf for 'lifestyles of the rich and stupid'. It was bound to happen.
It may shake the markets for a while but I honestly don't think it will do too much damage in the long term.
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November 27th, 2009, 11:54 PM #10
Re: Dubai having issues with its debt
Finally a stop to those "Bollywood" movies.
You can only get smarter by playing a smarter opponent
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