The bubble has burst in Dubai and the affliction is spreading to Western financial markets.
Yesterday, US markets were closed for the Thanksgiving holiday, but other markets were open and shuddered:
When reading the article linked just above, you may recognize the name “DP World.” This was the company that was scheming to take operational control over several vital US ports a few years ago. This is just another reason why it was a good thing that moronic idea was stopped.
Dubai was a classic bubble. It was also largely a facade. Billed as a playground for Western tourists and a financial center, the truth about Dubai and the rest of the UAE is rather different.
All along, the Islamists were working behind the scenes and, if a Westerner strayed outside the facade and committed a terrible crime like kissing his girlfriend in public, authorities would in fact act.
And then there is the whole disturbing problem of ties between UAE (of which Dubai is a part) royals and Al Qaeda. Long forgotten is the testimony of then-CIA director George Tenet before the 9/11 Commission that a US strike on an Al Qaeda compound in Afghanistan thought to contain Osama Bin Laden was called off because of the presence of numerous UAE royals in the compound with Bin Laden. It seems that Bin Laden and the UAE royals were falconry buddies and they often visited him.
Why in the world would ANY Westerner trust these scoundrels???
Against this little-known backdrop, Dubai was building high-rise hotels at a rate that would make Las Vegas in its glory years green with envy. It was all supported by greed. It was a game of musical chairs and, sooner or later, the music was going to stop and not everyone would have a nice, comfortable place to sit down.
So today, the markets are set to open in the US with the news that the miracle of Dubai was smoke and mirrors:
Wall Street bankers are trying to downplay their exposure in Dubai, but one wonders what credibility they have left when it comes to delivering reassurances. And readers of SFW know that big Wall Street firms like Citigroup and Goldman Sachs are totally in bed with the financial jihadis and have been for years.
I feel pretty certain that the problems in Dubai will prompt the financial jihadis to recommend Shariah compliance as the remedy. They’ve already been saying that for some time and this development seems tailor-made for them to blame Westernized use of interest-bearing debt for their woes (rather than greed and irresponsible decision-making on their part, which will NOT go away with the application of shariah.)
The UAE wields a considerable financial throw weight however, and I would not be surprised at all to see the usual Western suspects gladly bend over to accomodate Shariah specifically as a result of Dubai’s debt problems.
It is with this in mind that we link to three vital articles which point out that most of the talk of Dubai defaulting centers around its sukuk, or Islamic bonds, which have already had a higher than average default rate elsewhere, despite the supposed protective application of Shariah…