UAE moves to counter Dubai fallout but markets wary

[Joanne98]

Source: Reuters

DUBAI (Reuters) - The United Arab Emirates offered banks emergency support on Sunday, the first steps to ease fears that a looming debt default by two of Dubai's flagship firms could derail the global economic recovery.

But the move to inject liquidity into Dubai's banks by the central bank of the Gulf Arab state, together with promises by neighboring city-state Abu Dhabi to provide selective support to Dubai companies was seen as by analysts as the bare minimum.

Dubai markets, which are set to open on Monday morning after a four-day holiday, are expected to fall by the maximum daily limit of 10 percent as banks, property and construction firms face investor ire over moves to restructure the Dubai economy.

The action of the UAE central bank to allay concerns by setting up an emergency liquidity facility was viewed as a necessary, but minimal policy response.

"This is the absolute minimum they could have done and suggests they won't be making another announcement before tomorrow morning, which is a little disappointing," said Raj Madha, banking analyst at EFG-Hermes


Read more: http://www.reuters.com/article/topNews/idUSGEE5AS0AH20091130

[Skink]

1. Raise gas prices in the U.S.

duh

[Hestia]

2. Raising gas prices is what got them is this debt in the first place - really, explain it to me/us

what is the absolute worst that would happen if the "global" markets did fail? Would the grass quit growing, the rain stop falling? At this point, who cares if they do. All is sounds like is that a bunch rich people miss out on a dividend check. :nopity: :boring:

[BR_Parkway]

4. I'm not sure where the article was, but the gist of it was about "Socially Necessary"

investments versus simply churning financial instruments to make profit. And over the past 30 years, how we've shifted from one to the other.

But I'm in agreement with you - if all the paper "wealth" that all these "investors" generated over the past few decades were just wiped out, perhaps we could get back to reality instead of this pervasive "wealth without work" attitude so many seem to have become enthralled with

[Deja Q]

12. We do the work. They get the wealth. Of course they're enthralled.

[skoalyman]

3. Quick Dubai, Build more jello mold shaped islands mawahahha

:nopity:

[Joanne98]

5. U.A.E. Eases Credit After Dubai World Debt Delay

Source: Bloomberg

Nov. 30 (Bloomberg) -- The United Arab Emirates’ central bank eased credit for lenders and said it “stands behind” the country’s local and foreign banks as they face losses from Dubai World’s possible default.

Markets from Asia to the U.S. fell last week after Dubai World on Nov. 25 announced that it was seeking to delay loan repayments. Dubai’s stock markets will trade on Monday for the first time since the news. Banks will be able to borrow money from the regulator for half a percentage point above the three- month local benchmark interest rate, the Abu Dhabi-based Central Bank of the U.A.E. said in an e-mailed statement yesterday.

“This is a timely pre-emptive move from the central bank,” Ahmet Akarli, an economist at Goldman Sachs Group Inc. in London said in a note to investors. The central bank is “ensuring that local markets are operational” and banks “have access to ample liquidity.”

Dubai World, a state-owned holding company struggling with $59 billion of debt and other liabilities, said Nov. 25 it would seek a standstill agreement with creditors and an extension of loan maturities until at least May 30, 2010. That raised the prospects of rising loan losses for U.A.E. and foreign banks.


Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=at_QDYzdYJdk&pos=1

[AnnieBW]

6. Ports

Aren't we glad that we didn't sell our port facilities to Dubai World?

[FarCenter]

7. Yes, AIG is in such better shape

[Joanne98]

8. Yes! And Bush lobbied soooo hard for that!

[AlbertCat]

9. Everywhere Halliburton goes turns to shit....apparently

I guess Dubai'll have to stop making man made islands in the shape of stupid shit.

[AllentownJake]

10. Who wants to take the bet that the Federal Reserve, Bank of Brittain, and its European counterpart

Did a transfer over the weekend?

[Blue_Tires]

11. wow...i had forgotten about Dubai...

you wanna talk about a place where the music has stopped and the party's over??