Dubai defaults on its debts

[andrewducker]

Here
If it was just a large Dubai-based company then I wouldn't be that surprised - but this is the largest government owned investment company in Dubai.

An awful lot of expansion over the last 15 years has been based on debt - and we're going to be seeing more and more of it unwind.  Which is what happens when your model is based on getting into debt and then paying it off faster than the interest mounts up - you live on the edge, balancing incomings against outgoings on a constant basis.  The longer the recession lasts the more companies will be pushed over that edge.

Comments

[luckylove.livejournal.com]

They just won't stop building. Bahrain is the same. They appear to be building everywhere. Even on land that doesn't yet exist! They keep recclaiming land for building which is mad as there's plenty land available that doesn't need reclaiming. Part of Bahrain's housing problem is the Fifth US Naval Fleet. Any one apartment block cannot be more than 25% occupied by US navy types. They're paranoid about bombs and stuff so they keep building more and more . . .

[andrewducker]

Well, they're going to have to stop building now, they can't afford to buy materials...