Dubai's in very deep debt and can't make its payments

[mattbell]

When I visited Dubai this past summer I had the sense that they were dramatically overextending themselves. I had no idea just how far it went.

From This article

Dubai will ask creditors of two of its flagship firms for a standstill on debt worth billions of dollars as a first step toward restructuring Dubai World, the conglomerate that spearheaded the emirate’s breakneck growth.

The government’s announcement on Wednesday, which also said the consulting firm Deloitte had been appointed to help with the restructuring, sent the cost of insuring Dubai’s debt against default soaring and bond prices tumbling, Reuters reported.
Dubai World has $59 billion of liabilities, its subsidiary Nakheel said in August, a large proportion of Dubai’s total debt of $80 billion.

Comments

Re: Suckers!

[nasu-dengaku.livejournal.com]

Even if Dubai's oil is limited, the money that built Dubai was oil money. It likely initially came from Abu Dhabi, but there's probably a lot of oil money from all around the Gulf invested in Dubai.

It looks like a wsj article confirms this http://online.wsj.com/article/SB125917636109164423.html