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bucheon bum
Joined: 16 Jan 2003
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 Posted: Sat Feb 14, 2009 10:48 am Post subject: Laid-Off Foreigners Flee Dubai |
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Dubai ain't looking so good
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With Dubai�s economy in free fall, newspapers have reported that more than 3,000 cars sit abandoned in the parking lot at the Dubai Airport, left by fleeing, debt-ridden foreigners (who could in fact be imprisoned if they failed to pay their bills). Some are said to have maxed-out credit cards inside and notes of apology taped to the windshield.
The government says the real number is much lower. But the stories contain at least a grain of truth: jobless people here lose their work visas and then must leave the country within a month. That in turn reduces spending, creates housing vacancies and lowers real estate prices, in a downward spiral that has left parts of Dubai � once hailed as the economic superpower of the Middle East � looking like a ghost town. |
Potential long-term impact on the UAE:
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| Some analysts say the crisis is likely to have long-lasting effects on the seven-member emirates federation, where Dubai has long played rebellious younger brother to oil-rich and more conservative Abu Dhabi. Dubai officials, swallowing their pride, have made clear that they would be open to a bailout, but so far Abu Dhabi has offered assistance only to its own banks. |
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Wangja
Joined: 17 May 2004
Location: Seoul, Yongsan
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| Posted: Sat Feb 14, 2009 3:34 pm Post subject: |
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| Passing through Dubai airport later tonight .... |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Sat Feb 14, 2009 3:48 pm Post subject: |
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...I've been following this on my "booms busts and construction cranes" thread...
Anyways, Dubai. Saw this coming from a few years away. Hey, lets build a couple islands shaped like trees and poetry and be rich. Surprises all around that that didn't work. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Sun Feb 15, 2009 7:50 pm Post subject: |
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Here's a video from a NZ news program (using a CBS package):
http://www.youtube.com/watch?v=3tKmRRC-Njc
Apparently property prices are down 50% last month. Last month. |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Mon Feb 16, 2009 8:46 am Post subject: |
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According to the report, the government is massively in debt, has one of the world's highest per capita national debt levels, and "there is not enough oil to pay for it."
So, the Dubai boom was another bubble built on government debt that has burst.
Another loss for the Ponzi economists. |
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caniff
Joined: 03 Feb 2004
Location: All over the map
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| Posted: Mon Feb 16, 2009 9:04 am Post subject: |
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What are the currently oil-rich countries gonna do when the oil runs out or a viable means of producing alternative energy is developed, I wonder.
They often live in areas that cannot produce enough to maintain their populations (without oil money to buy stuff) that are largely politically and socially backwards. In the desert.
They're gonna be screwed even worse than they are now. |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Mon Feb 16, 2009 9:20 am Post subject: |
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| caniff wrote: |
What are the currently oil-rich countries gonna do when the oil runs out or a viable means of producing alternative energy is developed, I wonder.
They often live in areas that cannot produce enough to maintain their populations (without oil money to buy stuff) that are largely politically and socially backwards. In the desert.
They're gonna be screwed even worse than they are now. |
I would suggest that Dubai sell its empty towers (and some old planes) to terrorists who want to make practice runs crashing jets into towers.
A great way to reduce the inventory of older model jets, unneeded empty highrises and stupid terrorists, simultaneously. A win for all. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Tue Feb 17, 2009 10:29 am Post subject: |
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http://smashingtelly.com/2009/02/15/bye-bye-dubai/
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Short of opening a Radio Shack in an Amish town, Dubai is the world�s worst business idea, and there isn�t even any oil. Imagine proposing to build Vegas in a place where sex and drugs and rock and roll are an anathema. This is effectively the proposition that created Dubai - it was a stupid idea before the crash, and now it is dangerous.
Dubai threatens to become an instant ruin, an emblematic hybrid of the worst of both the West and the Middle-East and a dangerous totem for those who would mistakenly interpret this as the de facto product of a secular driven culture.
The opening shot of this clip shows 200 skyscrapers that were built in the last 5 years. It looks like Manhattan except that it isn�t the place that made Mingus or Van Allen or Kerouac or Wolfe or Warhol or Reed or Bernstein or any one of the 1001 other cultural icons from Bob Dylan to Dylan Thomas that form the core spirit of what is needed, in the absence of extreme toleration of vice, to infuse such edifices with purpose and create a self-sustaining culture that will prevent them crumbling into the empty desert that surrounds them.
Dubai is a place for the shallow and fickle. Tabloid celebrities and worn out sports stars are sponsored by swollen faced, botox injected, perma-tanned European property developers to encourage the type of people who are impressed by fame itself, rather than what originated it, to inhabit pastiche Mediterranean villas on fake islands. Its a grotesquely leveraged version of time-share where people are sold a life in the same way as being peddled a set of steak knives. Funny shaped towers smatter empty neighborhoods, based on designs with unsubtle, eye-catching envelopes but bland floor plans and churned out by the dozen by anonymous minions in brand name architects offices and signed by the boss, unseen, as they fly through the door. This architecture, a three dimensional solidified version of a synthesized musical jingle, consists of ever more preposterous gimmickry - an underwater, revolving, white leather *beep* pad or a marina skyscraper with a product placement name that would normally only appeal to teenage boys, such as the preposterous Michael Schumacher World Champion Tower.
But if there is one problem with the shallow and the fickle, its that they are shallow and fickle, they won�t put down deep roots and they won�t remain loyal to Dubai. The people who appear in People magazine need to be told what is cool by Wallpaper magazine who in turn will discover something after the hipsters have moved on. The problem is that Dubai was never hipster-cool and is no longer Wallpaper-cool. This realization will have the same impact as suburbanite bachelorette party in a Wallpaper-cool nightclub. It will spread like the sighting of a floating turd in a public pool, flushing people to the exits with silent panic, unacknowledged for fear of embarrassment.
As people scramble for the exits in Dubai, there is no �key mail�, like in America, where people can often mail back their house keys and walk away from a mortgage without the immediate threat of jail. People are literally fleeing this place, to date leaving 3000 cars stranded at the airport with keys still in the ignition. And the reason for this is that if you default on your Dubai mortgage, you can end up in a debtors prison. Perhaps Dubai will at least create a new Dickens? |
Ha. |
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On the other hand
Joined: 19 Apr 2003
Location: I walk along the avenue
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| Posted: Tue Feb 17, 2009 10:49 am Post subject: |
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That was an amusing article, Mises. Though in fairness to Dubai, that kind of satirical cut-up can be done to just about any city. All you need is a writer with a keen eye for the negative.
"Winnipeg, the city the jet-age left behind". "Toronto, trying to be New York, but ending up as a failed Boston". Etc etc.
Admittedly, there was something a little odd about how at one point, all of a sudden, you heard about people like Michael Jackson and Brad Pitt building houses in Dubai. It all had kind of a manufactured bandwagon quality about it. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Tue Feb 17, 2009 10:54 am Post subject: |
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Dubai was a very unique place. Like Singapore, without the edge (haha). Why was Dubai growing? Well, because Dubai is growing!
Like Van Islander said on another thread, when I said Dubai would die. "Dubai combines the best of Eastern and Western business". Well, what the hell does that mean? Dubai was a mecca for people who like platitudes. |
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On the other hand
Joined: 19 Apr 2003
Location: I walk along the avenue
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| Posted: Tue Feb 17, 2009 11:10 am Post subject: |
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| Why was Dubai growing? Well, because Dubai is growing! |
Yeah, that was kind of the thing. If you were to ask why western Canadians snowbird in Arizona, the answer would be because it's warmer than Canada, the culture is similar, and its closer than Florida. Same thing(with the locales reversed, obviously) if you were to ask why eastern Canadians snowbird in Florida. And Swedes go to Denmark because it's close and the booze is cheaper, etc.
But, on the face of it, anyway, there didn't seem to be any logical reason why people would move from North America or Europe to Dubai. I guess once the number of foreigners reached a critical mass, you could say the culture was similar. But that kind of raises the question as to how the foreign population reached that level to begin with. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Tue Feb 17, 2009 11:21 am Post subject: |
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Phoenix is actually a good example. I had a long running argument with a bunch of real estate analysts from a research institution about it. They said Phx was growing and homes appreciating because of 1) the weather (phrased as "year round golfing" - meaning they've never felt the AZ summer heat) and 2) all the professional athletes who live there. I kid you not. Have you ever been to Scottsdale? Good god, that place needs to burn.
The vast majority of growth in the past 10 years or so has been an illusion. Dubai is only the most extreme example. Shanghai (property), Miami, Vancouver, Singapore and others all closely follow.
My schadenfreude is high, these days. Everybody who should go broke is going broke. |
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On the other hand
Joined: 19 Apr 2003
Location: I walk along the avenue
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| Posted: Tue Feb 17, 2009 11:35 am Post subject: |
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| Phoenix is actually a good example. I had a long running argument with a bunch of real estate analysts from a research institution about it. They said Phx was growing and homes appreciating because of 1) the weather (phrased as "year round golfing" - meaning they've never felt the AZ summer heat) and 2) all the professional athletes who live there. I kid you not. Have you ever been to Scottsdale? Good god, that place needs to burn. |
Well, you're preaching to the choir here, because I don't like hot weather, and if I were looking for something outdoors, I want there to be snow-peaked mountains in the vicinity.
But, I do think it makes a certain amount of sense that, if you were an Albertan who wants to spend the winter somewhere warm, you would head somewhere in the general region of Arizona. Dubai just doesn't seem to have the same sort of logic backing it up.
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| Have you ever been to Scottsdale? |
No, and I don't even know what it looks like or what's there. Arizona is all one big sand-encrusted blur in my imagination. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Tue Feb 17, 2009 11:41 am Post subject: |
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I met very few Americans/Canadians in my travels to Dubai. Mostly Brits, Euros, Iranians and other regional groups.
You're exactly right, though. Why pick up and move to Dubai? Capital attracts labor, and Dubai was absorbing huge amounts of capital. It is again similar to Phx, which has several hundred thousand Mexicans etc move into the city or surrounding areas to labor in the housing boom. They were following the flow of capital. Now that the capital is gone, the Euros (consumers) and South Asian laborers (producers) leave Dubai and the Mexicans (producers) leave Az (generally). I don't know what happens to the trapped consumers of Phx.
If you have irrational allocation of capital, you'll get irrational allocation of labor.
This whole debt explosion is being reversed. The outcomes of the debt super cycle will turn around. The world will look a lot like 1995 + a more wealthy China, I reckon. |
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On the other hand
Joined: 19 Apr 2003
Location: I walk along the avenue
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| Posted: Tue Feb 17, 2009 11:52 am Post subject: |
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| The world will look a lot like 1995 + a more wealthy China, I reckon. |
Just to clarify, do you mean that the world will look like a wealthier version of China? Or that China itself will be wealthier? |
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