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Lunchtime Links: Just when you thought it was safe say the crisis was over…
27 November 2009
….Dubai finally admits it has problems. The emirate puts in a request to its creditors for a six-month suspension on the debt pile of Dubai World, and then goes on holiday, leaving global markets to take the flack.
While Dubai World's chairman, Sultan bin Sulayem, was praying for forgiveness on Mount Arafat, European and Asian stockmarkets plummeted, banks fretted about their exposure to the debt, and just about everyone speculated over whether the Dubai's bubble had finally popped.
Breaking its silence this morning, the emirate said it knew how markets would react, and that the move was "carefully planned" (presumably, in an attempt to bury the news following months of positive comments from government officials). But just how bad is this?
At one end of the spectrum, Reuters suggests this has the potential to kick-start a second wave of the financial crisis - "The panic button's been hit again," said Francis Lun, general manager of Fulbright Securities.
Meanwhile, analysts at JPMorgan have pointed to the fact that Dubai's wealthy neighbours could easily come to the rescue (they just might be more reluctant this time).
UK banks have the most to lose – RBS says that they loaned $49.5bn of the total $87.3bn extended to the emirate by European banks.
Sheikh Ahmed bin Saeed al-Maktoum, he chairman of Dubai's Supreme Fiscal Committee remains convinced that: "unprecedented growth, in Dubai and across the (United Arab Emirates), over the past decade has helped lay the foundation for what is now a broad-based sustainable economy beyond just natural resources."
"The whole affair, one analyst told me yesterday, was 'typical of the way things work in Dubai - top down and in a vacuum - and that makes it very difficult for investors'". (Financial Times)
Walker review will have very little impact on bonuses (Times)
And the lefties don't like it (Guardian)
Robin Hood banker's heart was in the right place (ABC News)
"You're only one bounced cheque away from jail here" (Times)
"Sir David has responded to the public's disgust with a piece of pure bash-the-bankers posturing." (Telegraph)
Whistle blowing banker wants billions in compensation (New York Times)
Eric Daniels clings on as Lloyds gets green light for rights issue (Times)
LSE suffers technical glitch, again (Telegraph )
The five figures who will decide on bank's chief executives (Financial Times)
The 1000th best tennis player in the world has earned $18k throughout his career ( Financial News)
Dubai...once a goat town will return to being a goat town and so will the rest of the ME when the oil runs out.
A country's most important resource is its people just ask the Japanese.
Big Rob 27 Nov 2009
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