What Do You Mean You Didn't Know Your Allowance Was a Loan All These Years?

Marla Singer's picture

They want to be paid back?  Who knew? Reuters sez:

Abu Dhabi's $10 billion financial aid to fellow United Arab Emirates member Dubai to meet debt obligations was in the form of bonds, the UAE foreign minister said in remarks to the Jordanian state news agency.


"The aid did not come late and was in the form of bonds," Sheikh Abdullah bin Zayed al-Nahayan told the agency, Petra, on the sidelines of a Gulf Arab summit in Kuwait on Tuesday. "They are debt instruments that would be paid back and carry interest just like loans.

So, we are thinking this doesn't actually solve Dubai's debt problem.  And, what is this "interest" stuff?  That's not very pious.


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narlah's picture

So the classical scheme is again on - get out of debt by making more debt.

We all know how that ends.

omi's picture

I head debt is good for base money supply to expand the follow up on credit expansion.

Windemup's picture

Yea, according to Boyles Law, when a gas expands it cools.

If the US keeps expanding their money supply....

curbyourrisk's picture



PIK NOTES GO BOOM!  Story at 11.

Ragnarok's picture

This one might end a bit differently because by the time the creditors come to seize the properties they would all have collapsed by then because of their shoddy construction. They'll collect nothing but a pile of rubble that hopefully the dessert reclaims and we can forget about the experiment of having a bunch of tent dwelling, goat herding, falconers build the tallest skyscraper in the world.

When I lived and worked in Dubai everything was built by dirt poor Indians/Pakistanis with (if they were lucky) a 4th grade education.  These armies of laborers were than supervised  and led by undergrads in basket weaving from second rate universities in the middle east, who for their responsibilities were relatively underpaid and poor.  All this so the developers could make as much profit as possible off the English, Chinese and Russian Mobsters/Oligarchs.

In the foyer of my 5 year old office building sheet rock was falling of the walls.  The air-conditioning in the "million dollar" villa I lived in had to be repaired every week, mostly because the uni-browed caveman didn't understand basic copper soddering so we kept losing all the coolant.  All the plumbing fixtures leaked, then ran into the electrical fixtures causing all kinds of havoc.  The entire city was a lie, an Arabs wet dream.

Cheeky Bastard's picture

wow Marla, you're really pissed off at Abu Dhabi and Dubai for some reason ....

Ruth's picture

FFS, what the hell did you want her to do, spell it out in blood? and we missed you by the way!  Marla's spewing at this point so we just let her.  She might be eyeballin that diamond encrusted car!

mikeyv1970's picture

Cheeky, where have you been you bastard!  :)


i.knoknot's picture

welcome back - missed you.


estaog's picture

Cheeky, why don't you even things up by submitting an article about how awesome the UAE is. Dubai has big shiny buildings, they must be successful.

Anonymous's picture


MsCreant's picture

Nah, it sucks, but thank you for staying on this for all of us. I want to believe there are patriots. You give me hope. Thing is, all anyone can do is to try to control their own fall and maybe their immediate community. It is too late.

Emmanuel Goldstein's picture

Some words on patriotism:

"Patriotism is the last resort of a scoundrel."
-Samuel Johnson

"Patriotism is the virtue of the vicious."
-Oscar Wilde

"Patriotism ... is a superstition artificially created and maintained through a network of lies and falsehoods; a superstition that robs man of his self-respect and dignity, and increases his arrogance and conceit."
-Emma Goldman

"Patriotism is your conviction that this country is superior to all others because you were born in it."
-George Bernard Shaw

"Patriotism ruins history."

"During times of war, hatred becomes quite respectable, even though it has to masquerade often under the guise of patriotism.
-Howard Thurman

"When a whole nation is roaring Patriotism at the top of its voice, I am fain to explore the cleanness of its hands and the purity of its heart."
-Ralph Waldo Emerson

"Men in authority will always think that criticism of their policies is dangerous. They will always equate their policies with patriotism, and find criticism subversive."
-Henry Steele Commager

"Naturally the common people don't want war; neither in Russia, nor in England, nor in America, nor in Germany. That is understood. But after all, it is the leaders of the country who determine policy, and it is always a simple matter to drag the people along, whether it is a democracy, or a fascist dictatorship, or a parliament, or a communist dictatorship. Voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is to tell them they are being attacked, and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same in any country."
-Hermann Goering

Anonymous's picture


More crimes have been perpetrated in the name of patriotism...

Are you sure it was Herman Goering and not Dick Cheney who said it?

Emmanuel Goldstein's picture

Yup, to his court appointed psychologist during an interview at his trial in Nuremberg.

Though I am sure The Dick was well versed in it and it's application. I get the feeling he was an avid fan boy of Goebbels

Tommy's picture

Patriotism is just another type of religion; can be good but frequently exploited.

Rula Lenska's picture

+1.  Just substitute "religion" for "patriotism" in EG's post above and it remains just as true.

Anonymous's picture

I always thought Cheney was more like Himmler. Hard to know what to call a snake when you see one.

blueskyscottsdale's picture

"I had the good fortune to be good at computers. I also had the good fortune to have been born in America where everything that I achieved was possible".

Bill Gates

Emmanuel Goldstein's picture

Bill's a scoundrel if ever there was one. ;)

Seriously though, that kind of provincialist rhetoric has no basis in reality. The computer revolution happened in the US because of Stanford University and the courses offered at the time. Bill became wealthier (he came from money) because he was ruthless and had no problem exploiting the work of others.

Not that that is a bad thing per se, it's just not uniquely American.

Anonymous's picture

Without gravity, there would be no patriotism.



Ripped Chunk's picture

And the central theme of Buddhism is not "every man for himself"

Anonymous's picture

Anyone see the wapo article about treasury and irs changing tax laws for tarp banks? My blood is fucking boiling right now. It might be excessively warm from all of the egg nog and brandy I drank at the company christmas party tonight but I'm sure I will still be able to make pasta in the morning. Fuuuuuuckkkkkk this. I am so fucking pissed right now I can hardly contain it.

Cursive's picture

Yes, I feel your pain.  When you've got a little extra time, just start calling:


MsCreant's picture

I go through this several times a day anymore. And this is the doctored news! I like wine at night. They are fucking up bad. More are getting where we are daily.

Think on that.

So much looks trivial right now in comparison. Hard to take daily stuff seriously any more with this shit going on.

Anonymous's picture

Worst ruling class in our history?
I almost don't mind the greed and corruption anymore. Pls give me more basic competence! It's like none of these guys ever had a real job before.

Anonymous's picture

Are those comments late night dramatics?
Many people thought the sky would fall on their heads in November last year. It didn't then and hasn't since.

Can I suggest you broaden your reading to include other blogs for a more rounded perspective?

Life can look unnecessarily bleak when viewed through a pair of ZH-tinted glasses...

Winisk's picture

Look at the reaction following any CNBS post.  Trust me, many of us have a balanced input.  The bleakness you describe was likely generated prior to ZH and we gravitate here because it rings true.

Anonymous's picture

Are you kidding me? Do you get to call the treasury and ask them to change the tax laws for only yourself when you have a bad night at the casino. I don't like to name call or be abusive on a blog, it's like asking a question in a letter, but you are a fucking idiot.

delacroix's picture

a lot of people, don't even want to hear the truth.  I know people in my family, are gonna suffer losses, but its almost like they put their fingers in their ears, and go lalalalalalalala.   like the gov. will fix things, and it will get back to normal, and why am I such a pessimist.

Anonymous's picture

You're right. Nobody wants to hear how they are losing their wealth, and "Oh well, there is nothing we can do about it" routine. It's maddening. After at least two years of actively trying to communicate the actual financial situation, I've concluded nobody wants to hear about it.. It's a maka me a craza!

Ruth's picture

And Marla, that 'interest' stuff just means if you're interested, duh!

virgilcaine's picture

So they have sand and empty bldgs for collateral now.  That money is GONE GONE

This is like going to Vegas, Gambling and Losing big and asking for  Money back



SDRII's picture
Fed's Bernanke says Fed 'could affect' eventual increase in Fed funds partly by raising rate it pays on reserves


In other words, pay the banks more and fiurther disadvanatge savers. At what point do people simply pull all their money from banks? Couple this with the Wapo article on tax breaks and we have our own little Bernanke for shares program

SteveNYC's picture

Already have. Money in the safe baby, with a very thin working capital line in a checking account just to cover monthly bills. All should do the same.

Anonymous's picture

Abu Dhabi bonds are issued at a 4% rate. Quite reasonable.

Green Sharts's picture

Dubai says no problem, they will pay Abu Dhabi interest in the form of PIK bonds.

lieutenantjohnchard's picture

interest: i guess they were for islamic fiinance before they were against it.

Anonymous's picture

off topic, but: ROFFLES, ben bernanke just got named Time's Person of the year!!!

Green Sharts's picture

In other Ponzi finance news, Bloomberg reports:

Bank shares in Tokyo had their biggest gain today since May after the Nikkei newspaper reported that lenders will be given 10 to 20 years to comply with stricter capital rules. The Topix Banks Index of 84 lenders rallied 7 percent.

Japanese banks have only been zombies for 20+ years.  They don't have any problems that can't be fixed if they're allowed to push them out a couple of more decades. God forbid they have to raise capital and dilute their shareholders.

Anonymous's picture

We all know there is nothing a good baby boom can't fix.

Merck, who supplies the fluoride for the national water fluoridation program has been tasked with the dubious responsibility to mix a libido increasing product in with the fluoride that it supplies to the municipal water supplies.

Japan has plans to do the same via it's school fluoride rinse program.
1) S-FMR; Number of children will be increased to
?? 1,000,000 in 2010
?? 2,000,000 in 2020


deadhead's picture

I saw that last nite as well....all i could think of is this is the ultimate in irresponsibility.  naturally, the u.s. is doing the same with our banks but lying about it.

I have to at least give the Japanese credit for being truthful about....kind of like their central bank talks openly about equity purchases wherein the Fed does not.  Bernanke's answer to Bunning on Fed market involvement does nothing to change my mind.

Bernanke is a clear and present danger to the future of the U.S.A.


Anonymous's picture

Interest? Last time I checked it was forbidden.
Has the UAE parliament passed a few amendments to Qur'an?

Anonymous's picture

No taxation without representation! Anyone HERE who voted for anyone on the FED? The FED is putting the taxpayers at risk, and yet they are completely unaccountable to the taxpayer. The FED is a rogue organization about to take our entire country down....

Anonymous's picture

Game of the year: "Kick the can"...

deadhead's picture

it's going to be quite the game throughout 2010.

thanks for this article Marla.

the london bankers are ultimately going to get screwed on this....maybe Citi as well.

Anonymous's picture

bankers first
bankers second
bankers third
bankers fourth through last

holy shit these people are parasitic criminal scumbags