Thursday, December 4, 2008

The Debts of the Lenders: Dubai Property Implosion

It is FINALLY happening.

Condo flippers walking away are the first sign of trouble. The worst part (for them) is that there is a HUGE glut of inventory just about to come online in the market. This reminds me of Florida in early 2007.

Unfortunately, the UAE government is likely to repeat the mistakes of global governments
elsewhere. All of their fancy economics and finance degrees only boil down to one thing: print more money. Or in this case, slash interest rates . . . for now anyway.

Dubai's property bubble is financed on the expectation of $100+/oil and built by the toil of horriblly paid and treated workers from Muslim South Asia (overwhelmingly Pakistan and Bangladesh). These foreigners are a prime recruiting target for Al Qaeda and other Muslim extremist groups.

After all, what further proof do the imams need to demonstrate of the way mainstream Muslim leaders have isolated themselves from the common man? These workers know firsthand the kind of world they are forever barred from entering b/c they were building it w/their own hands.

Of course the UAE elite will respond by cutting interest rates and taking other means of printing money to protect the wealthy speculators. For all their fancy econ and finance degrees that's the only thing govt ministers know how to do. This will invite food and energy inflation - 2 areas which disproportionately affect the poor. And when that happens Dubai will be sitting on a powder keg.


harry said...


I read your post, It's have very important information. If you have more information about dubai property so please write i want to know more.Thanks...

In Debt We Trust said...

I would advise you to take a look at the most visible property developers and then a further look at their sub-contractors if you are interested in shorting the sector. A lot of them are based in S. Asia (Indian incorporated) or the Turkish markets.

Business is bound to be bad. I can make no further recommendations b/c of legal compliance restrictions.

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