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]

Who are you claiming was behind it all? The traders had plenty of reason to flee to oil at the time.

Re: Suckers!

[peristaltor.livejournal.com]

Actually, with the likely peak of production behind us as of 2005, futures speculators have a lot of reasons to dive in, provided they can do so in large enough numbers to lock up the market in, say, the summer driving season.

I heard the rumor on a podcast. ellenbrown was telling kmo about this rumor that she heard, once again, before the spike in prices in the spring of 2008. She claims a large enough pool of bankers bet on futures quietly (futures in this area, it seems, do not have to be reported to anyone), then offered these small sheikdoms loans to build based on the illusion that these oil prices would continue.

It's just hearsay, but plausible.