If its in the Telegraph then it must be serious! So serious that Jeremy Vine feels the need to do an article on the Dubai property crash on his show this afternoon.
So why does it matter that Dubai World has asked for a 6 months debt payment freeze - well two reasons, firstly and that's why its in the Telegraph - of the £48 bn that European banks have lent to Dubai World - £30bn has come from UK banks - some of the very same banks that went cap in hand to the Bank of England for funds to stave off bankruptcy.
The second reason is, that whenever I mentioned the unsustainable Dubai property market to those in the business, they often said either "the Dubai Royal Family wouldn't let anything go wrong or Abu Dhabi could underwrite any debt in the UAE". Both the royal family and Abu Dhabi are either unwilling or unable to come up with the cash needed, and if the emirate cannot fund its own debt at home how will it affect UK investment such as a multi billion pound ports project?
According to Gordon Brown, hes had a word and everything will be ok.
What is the reason for time of the announcement, which came out late on Thursday evening? Well - on par with a "good day to bury bad news" - Dubai is on holiday until 6th December!
Combining National Day and the festival of Eid the government and most businesses are off work now until Sunday, 6th. Plenty of time to let the dust (sand) settle. No doubt that's what royal family hopes.
I am reminded by a poem by Shel Silverstein called Smart
My dad gave me one dollar bill
'Cause I'm his smartest son,
And I swapped it for two shiny quarters
'Cause two is more than one!
And then I took the quarters
And traded them to Lou
For three dimes, I guess he don't know
that three is more than two!
Just them, along came old blind Bates
And just 'cause he can't see
He gave me four nickels for my three dimes,
And four is more than three!
And I took the nickels to Hiram Coombs
Down at the seed-feed store,
And the fool gave me five pennies for them,
And five is more than four!
And then I went and showed my dad,
and he go red in the cheeks
And closed his eyes and shook his head
Too proud of me to speak!
Friday, 27 November 2009
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