Abu Dhabi caves on its gambling-addicted neighbor, Dubai
in twelve-step language, this is called enabling... abu dhabi is enabling dubai, its whited sepulchre neighbor and fellow emirate, to continue to pursue the same raw, naked greed that got it into trouble in the first place, exactly the same strategy followed by the u.s. and europe in bailing out its too-big-to-fail banksters...
Oil-rich Abu Dhabi on Monday provided $10 billion to help pay off some of the debts of an ailing property company owned by the government of neighboring Dubai, at least temporarily averting a crisis over the finances of the high-flying desert sheikhdom.
and dubai may not be the only sovereign state facing difficulties...
Dubai "could well be the tip of the iceberg in terms of over-leveraged nations," analysts at India's HDFC Bank wrote in a report, as indicated by recent fears about a possible Greek default.
"We are in completely uncharted territory" that could redefine the relationship between Western investors and the government-backed companies often set up to develop projects here and in other emerging markets, said Chavan Bhogaita, head of credit research at the National Bank of Abu Dhabi.
These are nations where the distinctions between government, ruling family and government-owned entities are often difficult to discern, where clan ties can help acquire virtually open-ended credit, and where bankruptcy and finance laws are not well tested.
In Dubai's case, "one could in fact argue that the state is its corporations," Woertz wrote.
meanwhile back in dubai...
Housing prices have fallen nearly 50 percent so far this year, putting Dubai below Estonia for the biggest decline, according to a recent report by the London-based Knight Frank real estate group.
you might be tempted to think that this would be a wake-up call for dubai just as i was tempted to think that the on-going financial collapse in the u.s. would be a wake-up call for us... sadly, the small store of wisdom i've gained over the years tells me otherwise... when you're hopelessly addicted to power and money, it's really hard to give it up... there's no nicotine patches for those two drugs... Submit To Propeller