Stocks Tumble Overseas Amid Fears over Dubai Investment Firm and Weak U.S. Dollar

[Ghost Dog]

Source: CBS / AP

(AP) World stock markets tumbled Thursday as investors fretted over the debt problems at Dubai World, a government investment company, and the continuing slide in the dollar, which earlier fell to a 14-year low against the yen.

...

European markets followed Asia lower with the FTSE 100 index of leading British shares closing down 170.68 points, or 3.2 percent, at 5,194.13, having been out of action earlier for over three hours because of technical problems. Germany's DAX fell 188.85 points, or 3.2 percent, to 5,614.17 while the CAC-40 in France was 129.93 points, or 3.4 percent, lower at 3,679.23.

...

Across all markets, there is a growing awareness that investors may use the upcoming year-end to lock-in whatever profits have been made over the last 12 months.

Gold has been one of the biggest high-flyers over the last few months, having gained over 10 percent in November alone. It continued to rise Thursday as investors bought it up as a safe haven. It hit a new record high earlier of $1,196.8 an ounce, before falling back modestly. By late afternoon London time, gold was down 0.4 percent at $1,182.50 an ounce.

Read more: http://www.cbsnews.com/stories/2009/11/26/business/main5788522.shtml

---

The US Thanksgiving holiday usually leads to doldrums in World markets, it is said. But not today...

[msongs]

1. not to worry, the administration can bail them all out with money it doesnt have nt

[MannyGoldstein]

12. Quick!!! Give Tax Money To Goldman Sachs!!!

For God's sake, the future of the world economy is at stake!!! No time for questions, just give it to them!!! As much as they want!!!

[Bozita]

2. but, but, but haven't you heard about the Black Friday doorbusters?

[tomm2thumbs]

3. they went crazy building all these destination resorts that couldn't possibly make money

bottom lines do make a difference when you build a project that needs to make a profit to operate

[tridim]

4. I don't understand why the "smart" people couldn't see this coming?

I saw it about 6 years ago for what it was.. A freaking ruling-class/big-oil/neocon Disneyland, a model of super-excess gone completely batshit crazy. It was destined to fail.

[tomm2thumbs]

6. Seemed to be they didn't care as long as they owned the best in the world

Even if a few wealthy families visited and enjoyed it, that was all that mattered. Then. But maintaining it, with the world economy in a crisis... well, they never figured on that.

[mbperrin]

8. No, they didn't see it. They all have this batshit crazy Joh Galt

complex where they think they actually create reality and can change things by just the force of will.

Whew!

What a total waste of resources.

[annabanana]

21. The "smart" people thought there was an unlimited supply of

"dumb" people. (i.e. people with plenty of money and no sense - - a recently decimated resourse)

[WCGreen]

30. I felt the same way...

Dubious Dubai Defaults on Disneyland Debt...

[SOS]

38. For all those years that the con game was in full swing

I always wondered: How long can this go on?
Why doesn't this phony, house-of-cards collapse?

In September 2008, the answer arrived.

[FarCenter]

5. Looks like Macao or Las Vegas times ten

[pitohui]

40. except not safe for normal tourist activities

i don't have to hear too many stories of tourists put in prison for having poppy seed muffins or taking cold medicine before i decide that i'll stick with macao and las vegas

if you want to have a party, have a party...

their rep is just terrible...and over priced too...vegas is cheap as hell, esp. now, there's simply no contest

[pitohui]

39. yah i couldn't figure that out for the life of me

despite all the advertising at the end of the day who would go to those resorts? yeah, they had huge discounts for british holidaymakers but as far as getting the us dollar, forget it, you always heard all this negative shit abt tourists getting arrested for basically nothing but normal tourist behavior and there really didn't seem to be anything to do there but shop and look at buildings

i can shop and look at buildings in vegas and not get arrested if i ate a poppy seed muffin in heathrow airport that's still in my system in dubai...plus the hotel is not $6K a night...no really a friend of mine was quoted $6K FOR ONE NIGHT in a dubai hotel, maybe there was an event or holiday that day, i dunno, but in the event, she decided to route her travel thru paris instead...

if they want to be a destination, they needed to loosen up somehow...

[Ghost Dog]

7. European Options Jump Most Since October 2008 on Dubai Concern

Nov. 26 (Bloomberg) -- The benchmark index for European stock options jumped the most in a year as Dubai’s proposal to delay debt payments roiled equity markets worldwide.

The Vstoxx Index, which gauges the cost of using options to protect against declines in the Dow Jones Euro Stoxx 50 Index, rallied 28 percent to close at 30.35, the steepest gain since Oct. 16, 2008, when it reached a record at 87.51. The measure has averaged 26 over the past decade.

“I can’t see what’s going to drive the market upside especially given this Dubai situation which a lot of people didn’t see coming,” said Ian Murrell, a London-based broker at Wills & Co. “I wouldn’t want to risk any of this year’s gains especially with what’s going on in Dubai. Fund managers have had a fantastic year, and would not buy into this market.”

...

Today’s closing level of the Vstoxx compares with 20.48 for the Chicago Board Options Exchange Volatility Index yesterday. The VIX, also known as the “fear gauge,” measures the cost of using options as insurance against declines in the Standard & Poor’s 500 Index. It reached a low for the year on Nov. 24 amid speculation the worst of the global economic crisis is over.

/... http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x7094196

[KoKo]

10. "...especially given this Dubai situation which a lot of people didn’t see coming.."

Who could have known....Who could have seen this coming? Sheesh...how many times do we have to hear this crap.

Most people could see it coming. Reports about Dubai were that it was on the skids over a year ago.

Built another Las Vegas in a Desert and figure "folks will come" in the middle of the biggest housing bubble Boom we've ever seen, worldwide?

[Prometheus Bound]

9. I'm very concerned about the billionaires and the banks.

I hope they'll be okay.

Perhaps US taxpayers could lend a hand.

[KoKo]

11. Yep...what's a few more billion on our Taxpayers tab. We should help out Dubai...

by giving Citibank more of a cushion. Those poor bankers...who could have seen this terrible storm coming.

[Prometheus Bound]

13. What Dubai World owns

http://www.marketwatch.com/story/dubai-worlds-sprawling-empire-2009-11-26

Dubai World's sprawling empire

......Dubai World is a sprawling holding company, wholly owned by the city-state's government, with interests in real estate, transportation, logistics and natural resources, according to its Web site.

Dubai World's Nakheel develops residential, retail, commercial and leisure real estate. It is behind projects such as "The World" that have made Dubai synonymous with grandiose and exorbitantly expensive real-estate projects.

"The World," for example, is a development of 300 islands in the shape of the world's continents, being created off the coast of Dubai. The Palm Trilogy refers to three man-made islands shaped like palms.

Limitless is also a real estate developer owned by Dubai World, while Leisurecorp is a golf company whose portfolio includes the Chris Evert Tennis Centers and the Jumeirah Golf Estates.

In the transportation and logistics sector, DP World is one of the largest marine terminal operators in the world. It had 49 terminals and 12 new developments across 31 countries as of March.

Economic Zones World, a company that develops and manages real estate, is also owned by Dubai World. Its flagship company is the Jebel Ali Free Zone.

In the financial sector, Dubai World owns Istithmar, an alternative investment house. It acquired Barneys New York, the luxury specialty retailer, in 2007. Istithmar's equity investment exceeds $2.6 billion across markets ranging from North America to the Far East.

Dubai Multi Commodities Centre, a subsidiary of Dubai World, is a market place for gold, diamonds, steel, base metals, tea and other commodities.

In the maritime industry, Drydocks World is an international player in ship repair, conversion, new building and other marine-related activities.

Dubai Maritime City is the first ever purpose-built hub for maritime business and commerce. It's located on a man-made peninsula between Port Rashid and the Dubai Dry Docks in the Arabian Gulf.

Dubai Natural Resources World was created as a business unit of Dubai World in 2008. It invests in natural resources, including energy, mining and metals, and agriculture. For example, the company has a joint venture in the oil and gas sector in both Russia and Nigeria.

[704wipes]

14. Dubai is corporate headquarters for Hallibuton now, right?

nt

[47of74]

16. It's also the GOP dream world

They shit all over the environment and the workers over there. In other words, GOP dream world.

[SpiralHawk]

18. "Sneer." - Dickie 'Five Military Deferments' Cheney (R)

[fascisthunter]

35. it's the GOP's fascist dream

another bankrupt idea....

[notadmblnd]

15. did they really think the rich could or would support their endeavors for long?

[Ghost Dog]

17. European shares extend their steep fall on Friday

Fri Nov 27, 2009 3:13am EST FRANKFURT, Nov 27 (Reuters) - European shares extended their steep fall on Friday, after suffering their biggest one-day drop in seven months a day earlier, as concerns about debt problems in Dubai continued to dent appetite for risky assets.

By 0806 GMT, the FTSEurofirst 3000 .FTEU3 was down 1.4 percent at 974.94 points, having fallen 3.3 percent on Thursday.

Japan's Nikkei .N225 hit a 4-month closing low on Friday after Dubai, part of the oil-exporting United Arab Emirates, earlier this week said it would ask creditors of state-owned Dubai World and Nakheel to agree to a standstill on billions of dollars of debt.

"We are facing day one after the 'Dubai-shock', but unfortunately this effect seems not to be over yet," said Roger Peeters, strategist at Close Brothers Seydler.

"The unknown: How will the U.S. market as the worldwide most important market place react on the development in the Middle East. Perhaps the answer on this question will not be given today," he added.

/... http://www.reuters.com/article/marketsNews/idCAGEE5AQ0CJ20091127?rpc=44

---

Stocks from Tokyo to Mumbai were haunted by suspicion of lenders' exposure to Dubai firms that built islands in the Gulf, planned cities from Pakistan to Africa and fashioned the financial hub of the world's biggest oil exporting region.

"This an important reminder that the credit crisis is forgotten but not gone," Robert Rennie, strategist at Westpac Global Markets Group, said in a note.

...

The news shook markets recovering from the collapse of the U.S. housing bubble and contagion that threatened to rupture the global financial system last year.

"The panic button's been hit again," said Francis Lun, general manager of Fulbright Securities in Hong Kong.

...

Dubai's debt problems are a hangover from a property bubble that imploded after the financial crisis derailed its plans to become a magnet for tourists and a regional hub for everything from shipping to entertainment.

Banks' exposure to a Dubai default pales in comparison to the $2.8 trillion in writedowns the International Monetary Fund estimates U.S. and European lenders will have to make between 2007 and 2010 as a result of the credit crisis.

International banks' exposure to Dubai World could be as high as $12 billion, banking sources told Thomson Reuters LPC.

It was the fear of the unknown that was driving trade.

"Similar stories to the one in Dubai are likely to come out, leading risk money to pull out from assets such as commodities and stocks," said Takahiko Murai, general manager of equities at Nozomi Securities in Japan.

Japan's biggest bank Mitsubishi UFJ Financial Group fell as Japan's Nikkei average struck a four-month closing low. It also came under pressure from weak exporters after the dollar hit a fresh 14-year low against the yen. The Australian and New Zealand dollars retreated.

Oil extended Thursday's decline to tumble below $75 a barrel. Shanghai copper and Chicago grains each dropped around 2 percent.

Shares in HSBC Holdings, one of the bookrunners on an outstanding $5.5 billion Dubai World loan, dropped more than 7 percent and Standard Chartered losses topped 6 percent. The London listed shares of the two lenders led the biggest tumble in European bank stocks in six months on Thursday.

The Dubai crisis could have a "meaningful impact" on banks across Asia, said Daniel Tabbush, Asia banks analyst at CLSA in Bangkok, listing Standard Chartered, HSBC and Singapore's DBS Group as the most exposed in the region.

...

Builders, such as Australian construction firm Leighton Holdings, took a beating on concern that money due from Dubai's grandiose construction projects, including the world's tallest building, would not be paid.

/... http://finance.yahoo.com/news/Dubai-debt-delays-revive-fear-rb-3585908262.html?x=0&.v=3

[hamerfan]

19. It was "carefully olanned"...

Nothing to see here... It was all "carefully planned"...

Friday, November 27, 2009, 6:11 AM EST
By BARBARA SURK | Associated Press Writer
The Associated Press

A top Dubai finance official said the emirate fully expected fallout from its debt problems and assured foreign creditors that Dubai World's request to postpone payment on some of its $60 billion in debt was "carefully planned."

The comments by Sheik Ahmed bin Saeed Al-Maktoum, the chairman of Dubai's Supreme Fiscal Committee, came as world markets reacted in shock to what some analysts indicated amounted to a default Dubai World, the city-state's key engine of growth with interests ranging from ports to real estate.

Ahmed said the emirate's leadership thought long and hard, weighing creditors' interests, before announcing they were seeking a "standstill" on Dubai World's debt until at least May.

"Our intervention in Dubai World was carefully planned," Ahmed said in the statement released late Thursday. "The government is spearheading the restructuring of this commercial operation in the full knowledge of how the markets would react."

The Dubai government, in a brief statement issued Wednesday _ on the eve of a three-day Islamic feast _ said it would request the delay in Dubai World's debts, as well as those of real estate arm Nakheel, which has a roughly $3.5 billion Islamic bond coming due in December.

The fallout from the brief statement came swiftly, and was felt around the world. Oil prices dropped near US$74 a barrel in Asia on Friday as investors curtailed their risky bets on commodities amid uncertainty over the extent of Dubai's financial woes.

"We understand the concerns of the market and the creditors in particular," Ahmed also said.

He called the Dubai World's debt freeze request a "sensible business decision" and said Dubai's leadership had to intervene when it did "because of the need to take decisive action to address its particular debt burden."

A year after the global downturn derailed Dubai's explosive growth, the semiautonomous city-state known for its man-made islands, the world's tallest tower and indoor ski slope has been grappling with its debt load, issuing bonds that have been bought up by both the United Arab Emirates' central bank and, most recently, two banks majority owned by neighboring Abu Dhabi, the oil-rich emirate home to the UAE's federal government.

The announcement of the debt delay request appears to have largely eclipsed any assurances by the emirate's ruler, Sheik Mohammed bin Rashid Al-Maktoum, who had continually dismissed concerns over the city-state's liquidity.

Sheik Ahmed, who is also a member of Dubai's ruling family and serves as the chairman of the Emirates airline, said claims that Dubai overreached during the good times were unjustified.

Ahmed said the unprecedented growth over the past decade "helped lay the foundation for what is now a broad-based sustainable economy."

"The economic fundamentals, such as our highly developed infrastructure ...will ensure Dubai remains an attractive regional market," Ahmed said.

[DemReadingDU]

20. Carefully planned to be announced on U.S. Thanksgiving Day?

:shrug:

11/27/09 Dubai World's debt freeze 'carefully planned'
http://news.yahoo.com/s/ap/20091127/ap_on_re_mi_ea/ml_dubai_debt

[Kshasty]

36. seems like that, everything is planned

[RUMMYisFROSTED]

37. I, also, would like to take this opportunity to request postponement of my debt until May.

:think:

[TacticalPeek]

22. US Stock Market Futures Sharply Down On Dubai World Debt Woes

Source: wsj.com


* NOVEMBER 27, 2009, 3:17 A.M. ET

US Stock Market Futures Sharply Down On Dubai World Debt Woes

U.S. stock market futures are trading sharply lower in the wake of a heavy sell-off overnight in Asia due to worries about banks' exposure to Dubai World's debt.

Futures for the Dow Jones Industrial Average were down 301 points, or nearly 3%, to 10,141. Futures for the S&P 500 were down 39.1 points, or 3.6%, to 1,069.50, while futures for the Nasdaq 100 were down 65 points, or 3.6%, to 1,729.25.

Read more: http://online.wsj.com/article/BT-CO-20091127-701861.html

---

Katy bar the door.

[DumbBassRepublicans]

23. T-I-M-B-E-R............

TERRIFIC.
JUST WHAT WE NEED BEFORE THE HOLIDAY SEASON...
I SAY FIND OUT WHO CAUSED THIS BANK MESS, CONFISCATE ALL OF THEIR ASSETS, AND THROW 'EM IN JAIL...!!!

[DeSwiss]

24. Whoa....

...they may have to turn off the snow-making machine!

http://elementaryteacher.wordpress.com/2007/10/27/ski-in-dubai-largest-indoor-snow-park-in-the-world/">

- K&R

[SergeStorms]

26. The sheer lunacy.......

of their envisioned capitalist utopia in a desert environment is without parallel.

Once again, a project predicated on the idea that there can be unlimited growth and prosperity, forever. They really do deserve everything that's happening there. It's conspicuous consumption on a scale even Americans have a hard time fathoming.

[Deja Q]

32. You mean, they have to put their plans on ice? They need to chill out, they'll get bailed out...

:spray:



:yoiks:

[SergeStorms]

25. Yet another house of cards........

comes tumbling down. Anyone with half a brain had to know that the capitalist "oasis" in Dubai was destined for failure right from the start. But capitalist pigs don't have half a brain now, do they?
What they attempted to do in Dubai would be the equivalent of trying to build Las Vegas from scratch in a couple of years.........X 10.
Fools and their money........... :shrug:

[AKing]

27. On the bright side,doesn't Cheney have a lot invested there?

[Deja Q]

33. Anywhere but the US, which is reassuring:

God is blessing the US by ensuring these nasties don't get away with gutting out country and thinking they can move "their" ill-gotten money elsewhere.

[Joanne98]

28. LOL

DUBAI, United Arab Emirates — A top Dubai finance official said the emirate fully expected fallout from its debt problems and assured foreign creditors that Dubai World's request to postpone payment on some of its $60 billion in debt was "carefully planned."

The comments by Sheik Ahmed bin Saeed Al-Maktoum, the chairman of Dubai's Supreme Fiscal Committee, came as world markets reacted in shock to what some analysts indicated amounted to a default Dubai World, the city-state's key engine of growth with interests ranging from ports to real estate.

Ahmed said the emirate's leadership thought long and hard, weighing creditors' interests, before announcing they were seeking a "standstill" on Dubai World's debt until at least May.

"Our intervention in Dubai World was carefully planned," Ahmed said in the statement released late Thursday. "The government is spearheading the restructuring of this commercial operation in the full knowledge of how the markets would react."

The Dubai government, in a brief statement issued Wednesday — on the eve of a three-day Islamic feast — said it would request the delay in Dubai World's debts, as well as those of real estate arm Nakheel, which has a roughly $3.5 billion Islamic bond coming due in December.

http://www.google.com/hostednews/ap/article/ALeqM5gbTvNh-bRnYlUSlzDm3xDd8G1tVAD9C7R7B00

[skoalyman]

29. Oh no what shall we do those poor millionaires

.<<micro violin

[Fumesucker]

31. And the cry goes out yet again: Whocoodanowed?

:rofl:

How Many More Times?

http://www.youtube.com/watch?v=WE8ZoHUBZI8

[Deja Q]

34. money.cnn.com -sadly, it's rebounded back to 10464.

How ponied up the 300 point difference?