Doubts About Dubai

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  Posted By: siriusinzim @ 11/06/2008 7:47:18 AM

  The Dubai and UAE property market is not totally coupled to the crisis in European and US Markets. It is not totally immune either. Some of its immunity derives from the control of supply of space - residential, office and commercial - particularly in Abu Dhabi wherein the Governments at Emirate level restrain development through permit approval. Some of its immunity also derives from the demand side where growth is still substantial as perople are attracted to the UAE states and there is a shortage of accommodation. In Dubai, at the moment, the residential accommodation market is a "sellers market" with rentals very firm. As supply catches up in the next 8 - 10 months, it is unlikely that rentals will fall, they will just not increase as much as they have been. The UAE Rulers, collectively and individually, will accommodate the market tension as they are long term planners and this short term market adjustment is well within there capacity to absorb. I think it is also a mistake to assume that what applies in US markets applies in other markets. The IMF has pushed the viewpoint for sometime that Banks in the UAE are overweight in property and that a more balanced portfolio approach should be followed. In a 'western' context of unfettered free market movements, this is correct to minimise contagion. When the market is not unfettered and is managed, it would mean that you would 'export' your investments/capital into other markets where you have no control. The lower risk arises from the management of the market and it should be borne in mnd that the very people who manage the market are those who have invested capital at risk in the Banks and the market. They are not about to reduce there control over there asset base and its value and neither are they about to export there capital to where it is beyond there control. The Emirati leadership - and generally the Gulf leadership - have been burned more than once by forces 'beyond there control' and in there own backyard are not about to get themselves burnt. Expect the building 'boom' to continue but at a much slower pace. The UAE's growth has been reset to 6 % for 2009 by the IMF, a growth rate which is still one of the highest in the world in spite of the credit crisis.

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  Posted By: crwcpa @ 10/25/2008 3:17:47 PM

  Unsecured debt should not be legal. It is the true cancer within our financial system and not one elected official has the strength to talk to the American people about how their immaturity and gluttony is crippling our childrens' future.

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  Posted By: Vote Now @ 10/25/2008 12:14:12 PM

  People on these bogs are fond of saying that the current economic meltdown was caused by Fannie Mae and Freddie Mac underwriting bad mortgages. While Fannie and Freddie obviously are guilty of writing bad mortgages, and worse, guilty of lobbying Congress to allow them to do so with impunity, their actions are just a small piece of the puzzle when it comes to determining who (or what) caused the financial crisis we face today.
  
  In 1929 the stock market crash caused the banks to fail, because the banks were in bed with the stock market. Back then, banks owned investment houses, so when the stock market fell, the banks fell too. This triggered the Great Depression. So in 1933 the Congress wrote laws that regulated banking, making it illegal for banks to own investment companies, mortgage guaranty companies or insurance companies. The idea was to keep key industries separated by a fire wall, so that if one industry failed the whole economy would not go down in flames.
  
  But the Republicans under Bush deregulated the banking industry. Senator Phil Gramm wrote legislation (the Gramm Rudman Act, the Gramm Leach Biley Act, etc.) that stripped away the regulations in the financial and insurance industies. He pushed them through the Republican Congress and they were signed into law by Geo. W. Bush. John McCain voted in favor. Everybody said how great it is to deregulate and create free markets.
  
  Lehman Brothers, Bear Stearns and Merrill Lynch each gave over a million dollars to Senator Gramm's re-election campaign.
  
  The economic collapse that happened later was a direct result of the deregulation, and here's how: the banks wrote bad mortgages, then bundled the mortgages into investment vehicles that they sold all over the world, and they even got firms like AIG to insure the investments. It was all a house of cards.
  
  If there had been no deregulation, sure we would have had a bunch of bad mortgages, and the mortgage guaranty and real estate industries would have suffered, but there would not have been a global financial meltdown, since the problem would have been contained in one sector of the economy. You can thank Geo W. Bush, Sen. Phil Gramm and Sen John McCain for the meltdown, since they were strong proponents of deregulation.
  
  Furthermore, although Fannie and Freddie are now holding the bulk of these bad mortgages, Fannie and Freddie did not originally write most of these mortgages. They bought them after the fact, bundled by banks/investment companies. Fannie and Freddie got screwed by the Wall Street fat cats. And so did you, if you pay taxes.
  
  What is Phil Gramm doing today? He works as a lobbyist in Washington, trying to make it legal for the Swiss bank he represents to sell Death Bonds in the United States. Nice guy, Phil Gramm. Incidentally, John McCain has said that he wants to appoint Phil Gramm as Treasury Secretary. Some people just can't learn from their mistakes.