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manojsai (< 20)

Dubai is funamentally strong..... the facts speak...

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November 28, 2009 – Comments (6)

Much speculation is in the global financial arena on the dubai crisis....The crisis effecting the dubai world which is a  big public company owned by the dubai Government has been spoken in world press as effecting the dubai central bank which is a false propaganda....Dubai is part of a confederation called United Arab Emiretus (UAE).

The UAE recorded a trade surplus of Dh231.09 billion in 2008, a 35.3 per cent increase on 2007, the central bank said in its statistical bulletin for 2009 first quarter.

The UAE’s total imports increased to Dh647.42 billion in 2008 from Dh485.17 billion in 2007, while total exports and re-exports for 2008 rose 33.9 per cent to Dh878.51 billion from Dh656.02 billion in 2007, the statistical bulletin available on the central bank Website said.

Oil exports accounted for Dh313.74 billion of all exports in 2008, up from Dh224.65 billion the year before, it said.

However, due to a surge in imports and a steep fall in investment income, the UAE recorded a Dh172.49 billion balance of payments, or BoP, deficit in 2008 after several years of huge surplus, the bulletin said.

Increased expatriate remittances and large capital outflows by the banking sector also contributed to the negative balance of payments compared to a surplus of Dh183.24 billion the year before.

The UAE’s financial account, a key component of the BoP, was negative at Dh203.06 billion in 2008 compared with the previous year’s surplus of about Dh105.4 billion.
Analysts said this was the result of an outflow of funds, including overseasfunds — so-called ‘hot money’ — which entered the UAE in 2007 as foreigners speculated on an increase in the dirham exchange rate. The UAE’s current account recorded a surplus of Dh81.82 billion in 2008, a 13.4 per cent increase on the previous year, .Total assets of the country’s central bank dropped to Dh193.75 billion last year, compared with Dh285.95 billion in 2007. Total liabilities in 2008 slipped 34.3 per cent year-on-year to Dh178.67 billion.

1 USD =3.67 AED

6 Comments – Post Your Own

#1) On November 28, 2009 at 7:57 PM, Imperial1964 (96.37) wrote:

Dubai is only one part of the United Arab Emirates.  So figures on the entire UAE may not really reflect the situation in Dubai, unless Abu Dabi is willing to bail them out.

Dubai is overleveraged in a credit crisis, just like Spain.  Are they all that bad off in my opinion?  No, this is a soverign wealth fund, not Treasury debt.  The fund just invested too aggressively.

Big losses for their investments and a big bust for the construction and banking sectors of their economy.  Big losses for the European banks that loaned them money.  The world moves on, so long as this sort of thing isn't contageous.

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#2) On November 28, 2009 at 8:01 PM, ReadEmAnWeep (< 20) wrote:

In my opinion any country that decides it wants a man made island and then makes one has some merit.

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#3) On November 28, 2009 at 9:40 PM, ChrisGraley (99.77) wrote:

Can they pay their bills?

That's probably the only fundamental thing I'm worried about. 

Japan did a pretty good job of over borrowing and pounding their chest about a strong economy as well.

That stopped when they couldn't pay their bills.

MC Hammer and Ed McMahon once lived in nice houses, and from the outside it looked like they were doing pretty good.

That stopped when they couldn't pay their bills.

I'm not sayin... I'm just sayin...

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#4) On November 28, 2009 at 10:57 PM, scoobamang (83.74) wrote:

I think EVERYBODY who thinks that Dubai is fundamentally strong should read this article.

Here's a few of the highlights: 

If a recession turns into depression, Dr Raouf believes Dubai could run out of water. "At the moment, we have financial reserves that cover bringing so much water to the middle of the desert. But if we had lower revenues – if, say, the world shifts to a source of energy other than oil..." he shakes his head.

This whole solar panels and wind thing seems to have a lot of political support right now!

Sheikh Maktoum built his showcase city in a place with no useable water. None. There is no surface water, very little acquifer, and among the lowest rainfall in the world. So Dubai drinks the sea. The Emirates' water is stripped of salt in vast desalination plants around the Gulf – making it the most expensive water on earth. It costs more than petrol to produce.

It almost makes you think that Dubai went to such unconventional lengths (just NOT PAYING ITS DEBT FOR HALF OF A YEAR) because the city's entire infrastructure would collapse if it had to pay it on time. 

The slave class that built the city and is already being screwed out of their paychecks will get a lot more restless if they actually have NOTHING TO BUILD and do not get paid for what they already did! 

And let's not forget that: Nobody told her there is no concept of bankruptcy. If you get into debt and you can't pay, you go to prison... If you have any outstanding debts that aren't covered by your savings, then all your accounts are frozen, and you are forbidden to leave the country.

 There will probably be a lot more of this going on! I hope Dubai has enough money to pay for its prisons! 

I believe that Dubai is just about the most fundamentally WEAK area in the world right now. The leaning tower of Pisa leans because it was built on sand, and Dubai is currently building the world's tallest building in a desert, and don't forget the ski resort! This whole sham of a city will collapse within a decade. 

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#5) On December 07, 2009 at 10:11 AM, kennyboy81 (74.11) wrote:

Any bets on whether said poster is a) emirati and/or b) part of the dubai gov't?

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#6) On December 07, 2009 at 10:45 AM, NotAnotherTrader (< 20) wrote:

Anyone that thinks those UAE are just like our western countries are in a BIG MISTAKE. Those shiny cities are just a facade to religious dictatorships, with oppressing laws that offer few civil rights to foreigners. 

I just recently read that unskilled workers are lured from other countries, but once they arrive they legally become some kind of slaves. They can't even leave the country without their employers approval (even though they work to barely survive), and they can't even change jobs. The employer and government becomes their master in every  sense.  Its a horrible place to live. I don't think anybody that respects our freedom should even vacation there. 

 There's other repressive legal matters for foreigners, look it up.
Fundamentally, Dubai is rotten.

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