I guess you’ve heard the news about Dubai – the oil rich, over-spending tiny Arab Emirate that tried to rebuild “The world” is now drowning in debt!
The country can’t pay some 60 billion-dollars it owes to mostly European banks. The news sent European stock markets plunging, which in turn dragged American markets down with them.
(I hope the protectionist people see a lesson in there. When America sneezes the world catches a cold. And when the world is down with that cold…the virus finds its way back to the US!)
I feel sorry for President Obama…
The poor guy DID NOT create any of the messes he now has to deal with. How do you fix Dubai or the next Dubai? How do you insulate the US from these economic meltdowns…and can we?
I guess these are questions for FED Chairman Ben Bernanke…and Treasury Secretary, Tim Geitner.
Bernanke is one of the few people I have confidence in on the economy. I don’t particularly care for Geitner. I’ve always thought that HE should NOT have been appointed…after his tax debacle came to light.
Geitner did not pay 34-thousand-dollars in self-employment taxes when he worked at the International Monetary Fund (IMF). It is supposedly a common “mistake” that Geitner conveniently realized around the time he was being nominated for Treasury Secretary.
How can a banker, and a prominent one at that, or anyone in the financial industry, especially the top dogs, NOT know they have to pay taxes…and on what?
That is a question that should flummox me; NOT the former president of the Federal Reserve Bank of New York.
If you don’t understand a simple thing like that, HOW CAN YOU UNDERSTAND THE CONSIDERABLY MORE COMPLICATED US ECONOMY?
Still, the IRS did NOT go after Geitner. But it comes after me…and YOU – ordinary Joe (NOT John McCain’s Joe the non-plumber – the IRS went after him! That poor Joe!).
Do you know auditors sent me a letter over my withholding for a couple hundred dollars? Even though I stapled a COPY of the bank forms to my return?
Yep. But Tim Geitner slipped through the cracks. I guess our tax guys are more efficient here in Massachusetts.
Anyway, back to Dubai!
In August 2008, CBS’S 60 Minutes ran a story on Dubai entitled: A visit to Dubai Inc. Steve Kroft reports on a Success Story In The Middle East.
News headline this past week: Debt crisis in millionaires’ playground could herald new phase in global financial meltdown
I feel sorry for people who are near retirement and have invested in the Stock Market…
Heck, I feel sorry for myself. But I don’t feel sorry for Dubai!
60 Minutes opened its Dubai piece by saying: Dubai is a tiny sheikdom nestled along the Persian Gulf on the eastern edge of the Arabian Peninsula and part of a tiny, oil-rich country called the United Arab Emirates. Over the course of just a few decades, it has transformed itself from a spit of sand about the size of Rhode Island into the Singapore of the Middle East.
Kroft described the transformation as: the vision of one man, Sheikh Mohammed bin Rashid al Maktoum.
According to 60 Minutes: One project, called by some the “largest construction site on earth,” was just desert several years ago. The site employs half a million laborers, working 12-hour shifts on a reported $300 billion worth of projects, building Sheikh Mohammed’s dream of a modern, efficient and tolerant Arab city with fine restaurants, a vibrant nightlife, that is both the playground and business capital of a new Middle East.
Sheikh Mohammed came up with the idea of turning Dubai into an international center for finance and media. He set up a series of free trade zones, promising no taxes, minimal regulation, and special incentive to corporations willing to locate to the emirate.
Since it opened three years ago, the Dubai International Finance Center has attracted banks, investment firms, and capital from around the world
According to the Sheik: Five years from now you’re gonna see towers on your right, towers on your left. You’re gonna see a kilometer-and-a-half garden where you can exercise. And if you’re bored of that, you can go underneath it for a kilo-and-a-half shopping mall…and it is not the largest shopping center in the world. Because that’s next door…
The Sheik was referring to The Burj Dubai development, where the largest shopping center in the world is under construction at the base what will become the world’s tallest building.
The building includes the first Giorgio Armani hotel with floor after floor of million dollar apartments. It was already nearly a mile high, and when it is finished it will be twice as tall as the Empire State Building.
60 Minuets reported that: With no environmental regulations to stop him, Sultan began dredging a hundred million cubic yards of sand from the Persian Gulf, along with seven million tons of rock to form a man-made Island in the shape of a palm. It more the doubled the coastline of Dubai, and created waterfront condos and homes for 150,000 people, not including 35 hotels.
The palm island project sold out in less than a week, and houses that initially went for $1 million are being resold by original investors and real estate speculators for five times that.
Three more off-shore developments are underway, including a chain of 300 man-made islands, some of which will be private. They are shaped and situated to resemble a map of the world, which is what the project is called.
That was in 2008.
And coming from a real island, when I saw those low-lying sandbars they were referring to as Palm “islands” I thought of a tsunami…
This past week (ending 11/28/2009), Dubai World set off its own financial tsunami when it announced it needed more time to pay back some of its 60 billion-dollar debt.