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Dubai World Press Release
Certainly you expected substantially the same thing... no?
Dubai, 30 November 2009: Dubai World (“Dubai World”) and its subsidiaries (the “Group”) would like to update their lenders on recent developments relating to their debt obligations.
Following a detailed review of the Group’s liquidity and capital structure, Dubai World has concluded that it should immediately consider alternatives in respect of the debt obligations of certain entities within the Group.
The proposed restructuring process will only relate to Dubai World and certain of its subsidiaries including; Nakheel World and Limitless World. The process will not include Infinity World Holding, Istithmar World and Ports & Free Zone World (which includes DP World, Economic Zones World, P&O Ferries and Jebel Ali Free Zone), all of which are on a stable financial footing.
The total value of debt carried by the companies subject to the restructuring process amounts to approximately US$26 billion, of which approximately US$6 billion relates to the Nakheel sukuk.
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Governments Must Take Steps To Avoid More Dubais: El-Erian
http://www.cnbc.com/id/34204797
PS - El-Erian as the replacement for Timmay - makes sense to me (even though he is Pimco, I've found him to be the straightest shooter through this entire thing)
Re: Mo E. as SecTreas, somehow I doubt an Egyptian could win Senate confirmation. And if Obama ever nominated him, Fox News et al. would have a field day alleging an Al Qaeda takeover of the US gov't/financial system.
+1,000,000
El-Erian may be the only person left who regularly stands in front of a camera, understands what is truly taking place, understands the best way to fix it, AND still retains universal credibility.
Sounds to me like they're going to payout a portion upfront through some sort of liquidation and extend the remaining debt obligations at a higher interest rate.
Am I hearing this right?? $26 Billion and the whole world economy was shuddering,,holy crap, this world is on the brink.. Ben, can you cut me a check so we can move to more important things? Thanx
26 Billion for now. That is what they will concede at this time. For example, when Lehman went under, it has the *MOST* cash per share than ANY other financial institution. The auction settlement for the debt was 8.625 cents on the dollar. Once you go default, it is bad.... REALLY bad.
http://dealbook.blogs.nytimes.com/2008/10/10/early-results-published-in-lehman-swaps-auction/
Whatdoesitallmean,,,
Thankx for the reply.
So what we are looking at is Dubai World and certain of its subsidiaries including; Nakheel World and Limitless World. Do we know what are the liabilities of "other subsidiaries" are, and is this what your referring to? Once in default all the snakes come out of the tall grass?
Let's face it.
Most corporate entities are ponzi-like in nature. Only the very very few are actually liquid and "solvent".
The difference between profitable (quarter by quarter, based on net-income), solvent and actually liquid are more settle than one might think.
Case in point, almost *ALL* Home owners are "in-solvent". At least here in New York City. Ie. if they owe more than they currently have.
Which is precisely the reason why the fed *NEEDed* to re-inflate the economy at all cost. Deflation will show that US consumer/corporations are running highly leveraged.
So, yes, when there is a default, it all come out of the woodwork. And the excess Cash-or-cash-equivalent that companies like Lehman had on the books will evaporate in an instant. (Ever wonder why Lehman and Bear in 2008 had so many traders who "made" hundreds of millions of dollars? Yet, couldn't help the firm... when it's time to liquidate the books.... Especially the OTC/CDS/Fixed Income desks)
The problem with Nakheel debt is that it went from 110 to 50. Premium to severe discount... So the debt holders are very unlikely to settle at an amicable term and default might still happpen.
Thankx,
I can't tell you how comforting this is. Honey, do we have backup lights?
Ding! ding! ding!
We have a winner!
$26B used to be a really big number until bailout 1.0 and $23.7T (h/t Neil Barofsky) was used to support the financial world. Wasn't LTCM like only $4B back in '98? Do you remember how the markets shuddered at that picayune amount before Greenspan unleashed his liquidity dogs? You can be sure of one thing, $26B is the tip of the proverbial iceberg.
Seriously, we have lost all sense of scale. What is 20, 50, 100 Billion when we have Trillions in deficit and "guarantees" to the finance industry.
I love how the media can spin/manage the number from $60B to $26B and all of a sudden, it is "better than expected".
It is 26 with 9 zeros behind it. come on people.
If they are admitting to $26B, then the real value at risk is probably $100B. Right? And it seems nobody is really sure if this is a restructure or a credit event, which matters in terms of CDS triggers so layer on another $200B notional in-flight and so AIG implodes and triggers another $2T in exposure and a FED conference call. Then aim some of the immediate losses at English banks and you might get a handsome UK bank run. 3 hours later NY opens the floor and 5 minutes after that bankers are pulling over to the curb during rush hour and shooting themselves in the head.
Which will snarl traffic and ruin your commute, believe me. So see? it matters lots.
cougar
Don't worry, the US consumers will bail us out.
Just worry about Tiger Woods and his car accident instead.
(I bet he will do just fine..)
How is Dick Cheney and George Bush Jr et al profiting from this?
Do they have derivative's that pay out if Abu Dhabi defaults?
Who has the big holdings in derivatives that pay out of America sovereign defaults? GS?
Iran the largest property owner in Dubai???
Hope West World is doing okay. Killer place to vacation.
How about "Sharia World" suckered into abandoning tradition and Islamic financial law only to get toasted by their long standing enemies? Although alcohol is forbidden, someone certainly got drunk on money, power and prestige.
Abu Dhabi knows that the Dubai experiment is dead. Yes they could pay off all the creditors at par ( 100 cents on the dollar) but in today's world, why should they? Only GS gets a par payoff from Timmy G. Abu Dhabi is orchestrating a cram down of creditors, and the creditors will have no options but to accept and be glad to get what they can.... For Abu Dhabi, better to own shit at 50% of cost than 100% of cost. But it is still shit. After reading the recent post on the dark side of Dubai, I am further convicted that the American greed system of materialism is a dying model and Dubai is just another in a series that is accelerating. Consumerism is not a sustainable economic model, especially when it is based on hyper-leverage. Think about it... when you go to the Walmart and buy a TV with your Visa, does the clerk ask how much equity you are going to put down? Nope, Visa et al are lenders at 100% LTV. Sure they charge high interest, because their yields are for the entire stack of debt. Just another simple fact why this consumer based economy in the US ( and exported around the world) is a house of cards.
Damn...Infinity World and Limitless World Holdings were going to be the names of next two Ponzi schemes.
The Buzz Lightyear moment - "To infinity (world) and BEYOND!". Perhaps the "infinity" was their expectation of credit?
And this just in! Limitless World has announced that they have, er.. just reached the credit limit.
Gotta love the irony in those names.
With names like limitless world and infinity world. How could YOU NOT KNOW they suck at finance!!!
REMEMBER: This week Dubai has hired the Rothschilds to help handle this mess. That is like asking a sniper-trained serial killer if they can be trusted with an AK-47 and an .50 BMG with 1000 rrounds for each... plus may as well as an Uzi with 2000 rounds just to be sure this serial killer can be trusted not to 'hurt' anyone close up too.
Folks,
I was hired to work at Limitless 1.5 yrs ago and left after 6 months. What a turkey-shoot!!
I am surprised that they lasted this long without disappearing up their own ass! Ran by an ego-maniac Emarati who was a childhood chess champ, related to the rulers, all his crony mates plus greedy, inexperienced, incompetent expat "executives" who all gathered together to tell themselves and anyone who would listen how clever they were!
Most had zero real estate/property development experience and they where guided by a bunch of wankers in the "strategy" department that would analyze the next big market to go invest the sheiks' borrowed money in. They lost/got-ripped-off in Russia (twice), India, Vietnam, Singapore, Saudi and have kept afloat by ripping off "developers" in their 1 and only Dubai project-until now as these guys have all fallen over. A ponzi scheme without a doubt, money funneled from Dubai World into this crap-shoot, much the same game as Nakheel (where many of the Limitless tossers originated from) and a future case study in what a shit load of money given to a bunch of ego-maniacs can result in!!
What I find interesting and ironic is their "crown jewels", Emirates Airlines is run by extremely experienced people-Tim Clark and Maurice Flanagan...both who have decades of experience, knowledge and insight. I don't know why the Dubai rulers couldn't do it with other businesses.....I guess the Sheiks thought that it doesn't take too much brains when it comes to dealing with debt and the property business.