The government of Dubai is in major financial trouble.
The government late Wednesday said it would restructure Dubai World and announced a six-month "standstill" on repayments of the state-run wide-ranging conglomerate's debt.
Government-owned Dubai World is a conglomerate with interests in real estate, ports and the leisure industry. The firm carries around $60 billion in liabilities. Credit agencies Moody's Investors Service and Standard & Poor's downgraded the debt of a range of government-related firms, including DP World, after the restructuring announcement.
The dollar amounts involved with Dubai are relatively small in this tranche (compared to the real estate debacle0, but this continues to indicate the shortage of dollars to support the current capital structure.
As one would expect, markets are reacting negatively. International stock markets are down across the board. The dollar is climbing.
Normally, an unimportant trading day, this year because of this news, the trading day after Thanksgiving is going to be something to watch.
No problem.
ReplyDeleteAll Dubai has to do is to follow the standard procedure of sending some lobbyists to bribe the U.S. Congress with what are known as campaign contributions who will then see to it that its losses are passed on the back of the American public by a process known as AIG-style bailout.