deliberately. It caused quite a hiccup. Now the problem seems to have
been solved thanks to some bailout money from the ‘family’ in Abu
Dhabi.
This sounds like the plot of a movie. It’s got all the pieces for a
‘hit’. Intrigue, big money, great location shots (London/Dubai/the
desert), the characters are investment bankers, local politicians,
Clifford Chance lawyers and Iranian investors. The Iran connection
brings in the CIA and therefore the opportunity for high-tech
surveillance and gunplay. The necessary sex/romance angles are there.
But this is not the movies. This is the crazy real world. A month ago
Nakheel bonds were trading at 110%. They fell below 40 cents two weeks
ago. This morning the bonds were trading north of 70. Some of the bonds
look to be paid at par.
That is enormous price action in a very short period of time. The
opportunity to make money on both the downside and the upside was
there. Another way to have played the Nakheel bond story was through
the CDS market. Pricing in that market mirrored the action for the
bonds. Very big bucks were made and lost as this played out.
To take advantage of this one would have had to have been an insider.
No outsider could have sold high and bought low. So the question is how
many insiders were there on this deal? My guess: A few thousand.
This deal stinks. It was mishandled from the get go. The critical
announcements were made while the US was on holiday. That was not a
coincidence. This was orchestrated. If something like this happened
with debt securities listed on the NYSE the SEC would be all over it.
This stuff is being played out on a very big stage. Caveat Emptor.
Told all of you the Dubai debacle was a fart in the wind. Big hedgies made a killing playing off institutional fears. Good for them.
This was just the beginning of the "Dubai debacle." BTW, farts usually precede much ugler and more substantive action. Better to sniff a fart than to eat shit.
Fellas, there's no angle for the SEC here. This is not their turf so why should they be interested? The SEC has got enough to do inside their jurisdiction.
The market needs to be alive and well.
Taking things too seriously? Or am I?
the s.e.c. would do what? bwaaahahahahahahahahahahahahhahahhaa
The Standby Elitist Cops won't make a move unless sanctioned by the TPTB - this allows ample time for the guilty parties to quickly hide their profits.
You lost me at "SEC" and "all over it".
What's the SEC?
Do you suspect that a soverign entity might have been playing this for its own benefit? I can't imagine that they would do such a thing....
/sarc off
Just another reminder about investing in EM's and Global Markets..
All this New Global Stuff , sounds like the Former Hyping " Internatonal" days of the early 2003-06 yrs..
Allt hose other Global/Int'l countries and companies can pull so many more Devious Tricks and stick it to the rest in a Heartbeat..and their can be Nothing we can do about it..
When ( not if) the price of Oil hits in the 90's -150's, Dubai can afford to let all those New Islands and Buidlings sit empty..with the Air Conditioning ON ..
and start Selling their Sea Water Conversion to Drinking water in bottles..
I think you should knock on the door of Barclays.
They love this kind of fancy footwork to get something to pay for itself.
Mind you, all that is secure is Nakheel's local debt to friends. The western banks will be hung out to dry (bar one).
The Secret Effluence Committee
-MB
They have a very capable advisor after all: http://uk.reuters.com/article/idUKL218443020090402
upd
Which was also appointed to restructure Dubai's debt just a couple of weeks before the 'breaking news' http://www.telegraph.co.uk/finance/businesslatestnews/6673264/Rothschild...
Nothing to see here.
BorisTheBlade,
...good catch on those links...thanks.
Rusty Shorts, welcome.
I just noticed that they've been winning a lot of business since recently:
http://www.independent.co.uk/news/business/news/oligarch-turns-to-rothsc...
http://www.reuters.com/article/idUSL121115920090901
Nothing really to see in Rusal case as they already reached standstill with creditors and restructured their debt. However, if I was to play sovereign CDSs, I'd be watching at Ireland very carefully, probably well ahead of Greece or Ukraine: http://www.cnbc.com/id/30308959?slide=21
So there is never a loss in the credit markets? This is a new world indeed. Nooone ever loses money.
What will they do with all the empty sky screpers?
Oh - lots of people lose money, just not those that should. Its much easier for 300M people to lose money (taxpayers) than one small financial group.
Terrific article but this brought the house down
"If something like this happened with debt securities listed on the NYSE the SEC would be all over it."
Sorry but this just spoiled the effect...and I spewed coffee all over my keyboard too!
I understand where you're coming from, Bruce, and I hear / feel your outrage ( such is quite palpable ) but this was neither a "random" event nor an insider laden rip-off.
EVERYONE knew that "this" was simply a matter of when, not if.
the SEC would NOT be all over anything of the sort. most likely patty yuk yuk byrne would go on about it but that would likely be about it.
and as for analogues ... this "type" of inter-market "news" hits at least two or three times a year when some key mkt is closed. whether is it soc gen's BS rogue trader that they dumped SO much on (puhlease), the us mkts own solo snafu (think 2/27 ish in 2007 when NYSE comps just "didn't work") or simply thxgiving itself this year ... 'crap' like this happens all of the time and, yes, it is uber shady but such is our marketplace; good funny-mental analysis saw it coming, cds inferences saw it coming, and yeah, there were a few birdies here and there chirping over the past few weeks about D world et al.
the global financial arena is a large spider web of intermingled connections and correlations ... when the ES / INX sneezes, the DAX catches cold ... when euroyen and the DX/ $USD are in sync then secondaries and related commods take their tumble. and while out-sized moves DO occur regularly, there are only a few rolling dislocations that occur each calendar year and are extremely insightful to those paying attention; think of them as breakaway / exhaustion gaps ... almost always these 'events' tend to produce breakaway gaps but thxgiving/ dubai/ nakheel etc. was rather limited, rather small and completely anticipated by way too many. dubai is NOT a bid deal in terms of dollars or dirham but it IS a very, very big deal in terms of principle and of great figurative import ... here's looking at you, you ugly PIGS bitches.
I / we define a "rolling dislocation" as an OPENING gap of X > 1.5% (+) OR (-) ... whereby that 'dislocated' mkt is NOT the "original source" of the allegedly exogenous 'event.' will leave the issue of 'causality' aside for now and simply state that dislocated mkts or rolling dislocations are extremely important to technicians in helping provide color to determine what 'the mkts' themselves think about their current / immediate prospects. as always, it is all about context and each data point / critical inference must be weighed alongside a firm comprehensive overview of both the immediate and intermediate outlook.
Very interesting. Merci. And I agree with fellow posters about the SEC.
If something like this happened with debt securities listed on the NYSE the SEC would be all over it.
Bruce...let's not go THAT far, lol!!
"Dec. 10 (Bloomberg) -- Pacific Investment Management Co., which runs the world’s biggest bond fund, is buying the debt of Abu Dhabi, Qatar and Ras Laffan Liquefied Natural Gas Co., said Michael Gomez, co-head of emerging markets at the fund manager. "
http://bloomberg.com/apps/news?pid=20601087&sid=aQzAdRQS8eRs
Maybe PIMCO knew something inside, maybe they didn't...but nobody was gonna let Dubai go the way of Lehman.
"... the SEC would be all over it."
Ha ha, hahahahahahah, ha ha!
That was funny!!!
When was the last time the SEC was all over anything?
SEC would be all over it?
not very likely, although they should be.