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What Dubai Says About Capitalism: Not Much
You sort of just knew Dubai was going to implode. Or if you didn't, you sure should have.
Bloomberg reports:
Dubai is shaking investor confidence across the Persian Gulf after its proposal to delay debt payments risked triggering the biggest sovereign default since Argentina in 2001.
The cost of protecting government notes from Abu Dhabi to Bahrain rose, extending the steepest increase since February as Dubai World, with $59 billion of liabilities, sought a “standstill” agreement from creditors. Bonds of its property unit, Nakheel PJSC, mature Dec. 14. Dubai contracts climbed 124 basis points to 564, the most since they began trading in January, adding to 122 yesterday, CMA Datavision prices showed.1
Goldman had this to say:
The Dubai Government announced yesterday that it has asked investors to extend the maturity of upcoming debt amortisations of two of its state-owned companies, Dubai World and its real estate development arm Nakheel, until 30 May 2010. Subsequently, the Dubai government has authorised Dubai Financial Support Fund to "restructure Dubai World with immediate effect".
Dubai World is a 100% state-owned holding company that owns Nakheel (100%), a real estate developer; DP World (77%), one of the world's largest port operators and a listed company; Drydocks World (100%), a shipbuilding and maintenance company; and Limitless LLC (100%), a real estate developer which owns various assets in Europe, Africa, Asia and the Middle East. The government of Dubai also owns a number of other entities directly or through other structures.
The signs of future troubles were not subtle in Dubai, outlined, for example in the finem respice piece "Redefining Capitalism To Suit Anti-Capitalists," April 14, 2009, which, at risk of being self referential, we reproduce below:
I spent a good deal of time reading and absorbing The Independent's stark and haunting take on Dubai,2 nicely cited today by Megan McArdle.3 I have spent quite a bit of time in Dubai and seen a number of sides of the "Middle Eastern Shangri-La," not least of which being the experience of a female expat in the jurisdiction. I can only describe this last as characterized both by the constantly disconcerting presence of an ill-defined malice (perhaps best understood as a sort of ambient white noise of potential danger) and the occasionally terrifying and instant materialization of real, even mortal danger from this shapeless white snow of audio. (This last I know only second hand, having watched the arrest of a friend without accompanying her into custody).
I was more than dimly aware of the plight of the lowest underclasses in Dubai, but it took Hari's article to click-sift the signal from the noise. For Westerners, the threat truly is an ill-defined background noise that requires of one only moderate effort to ignore- perhaps as the droning of engines on an aircraft, or a light ringing suggestive of tinnitus- until someone like Hari asks suddenly and aloud in an elevator car "do any of you hear that noise too, or is it just me?" With that attention what was a rather well concealed- or perhaps one should rather say "well ignored"- and insidious oppression becomes alarmingly clear.
On reflection, it is eminently clear that Hari is not exaggerating when he articulates the role of a "slave class," that being the caste of indentured servitude that has built Dubai's gaudy pyramids- and with alarmingly similar cost. But something about both Hari's article and the rest of the expositive work on Dubai that has surfaced in the last year has nagged at me subtly for some time. This was something I could not perfectly articulate until recently, when I finally found it early on in his piece, a single lunge closing his introduction with sharp and driving finality:
Few places in the world manage to visually represent the current failure of global neo-liberal capitalism as starkly as the Gulf Emirate of Dubai.4
It is a misconception so bold and so brazen that it, in the fashion of hiding in plain sight, dares one to challenge it- and, Dubaiesque, finds few takers. Ironically, it is a concept as insidiously seductive for some as Dubai's own marketing mirage. And as to the complexity of this mirage, it says something that the vast majority of "pictures" of Dubai returned in any search turn out to be artist's renderings of future skylines rather than actual photographs of present or past skylines. It takes only a little reflection to recognize that illusion is Dubai's first and most lucrative export, and that efforts to perpetuate it are, at once, very extensive and well practiced. This willingness to accept mirage as image, both in the case of Dubai and in the form of Hari's prose, is indicative of an increasingly prevalent attitude that bears both some scrutiny, and more than some debunking: that Dubai bears even the faintest resemblance to "global neo-liberal capitalism," whatever that is.
As a showcase for the evils of capitalism, Dubai has become something of a common display. From the more blatantly dishonest intellects:
Milton Friedman's beach club: Dubai, in other words, is a vast gated community, the ultimate Green Zone. But even more than Singapore or Texas, it is also the apotheosis of the neo-liberal values of contemporary capitalism: a society that might have been designed by the Economics Department of the University of Chicago.5
To what has become the almost trite offense of culturally indoctrinated xenophobia:
Welcome to the ultimate sociopolitical model for the 21st century: a Blade Runner-esque melting pot of neo-liberalism and "subterranean" economy, Sunni Arab Islam and low taxes, souks and artificial islands, a giant warehouse and a tourist paradise, life in the fast lane and post-modern slavery. The model spells out an apolitical, consumer-mad, citizenship-free society.
[...]
Dubai represents the essence of globalization at work - globalization, of course, interpreted as the ineluctable triumph of Western laissez faire, where world trade means economic rights trump political rights.6
It defies explanation how a state with debtors' prisons, no bankruptcy proceedings to speak of, slave labor punctuated by the seizure of workers' passports and brazenly broken employment contracts left unenforced by local authorities, almost non-existent freedom of the press, arbitrary and draconian drug enforcement, a ban on homosexuality punishable by lengthy prison terms, government filtering of the internet, rank favoritism in the form of selective enforcement against non-citizens, massive subsidization of the Emirati caste for everything from housing to education, labor laws that make it near impossible to fire a citizen but that grant effectively no rights at all to expatriates, academic oppression by the secret police, no religious freedom of any kind, no woman's suffrage, no men's suffrage, massive, unchecked deficit spending, and, to top it all off, a totalitarian monarchy with what amounts to unlimited power, could even remotely be described as "global" "liberal" "neo" or "capitalist," much less a poster state for "global neo-liberal capitalism." The only real laissez faire aspects of Dubai's existence are lax immigration policies (until one is unemployed) and the absence of income tax. Hari is so taken with the Dubai-as-capitalist-paradise theme, and just to make sure we didn't misunderstand his prose as something other than an indictment of capitalism- or perhaps because he just can't help himself- he closes by intoning in sarcastic context "Dubai is Market Fundamentalist Globalisation in One City."
And, really, could there be anything more absurd than associating Dubai with Milton Friedman in any way other than to highlight Friedman's belief that economic freedom, true economic freedom, has the effect over time of corroding authoritarian regimes? In this connection it isn't particularly hard to point out that the widespread exposure to the citizens of more liberal democracies (France and Great Britain in particular) has, in the case of Dubai, managed to do at least some good- though it seems quite small in comparison to the massive walls of oppression that still dominate.7
I have grudgingly come to the conclusion that the prevalence of this error is mostly inadvertent. That capitalism has become so aligned in the minds of its critics with conspicuous wealth or excess, that the two are linked wherever wealth and excess is found. A sort of sloppy disregard for causality, as it were, such that concentrated wealth must, a priori derive from the evils of capitalism (rather than a source so obvious that you were able to write 4 pages on it before running badly aground: a totalitarian, slavery-subsidized, theocratic state). In a sort of crude way this perverse and wordy haiku is a great compliment to capitalism, though possessed of neither the wit of brevity nor the elegance of meter. There are fates much worse than being associated, albeit erroneously, with the quick accumulation of wealth wherever it is found- provided wealth in and of itself does not, as any annual income above £25,000 obviously does Hari,8 intrinsically offend you, that is.
We find it absurd that what amounts to a proxy extraction economy funded by massive deficit spending would ever have attracted the degree of foreign capital and labor that Dubai has managed to bubble into existence, particularly given that a number of basic systemic problems should have warned off investors long ago. That 5 year Credit Default Swap protection on Dubai's sovereign debt could ever have been trading at 200 point spreads (GE 5 year protection currently sits at 213 or so) requires serial and near pathologic suspension of disbelief by investors in multiple areas including:
A Total Discount of the Importance of Institutional Strength
It has been no secret for the last many years that the legal system in Dubai, despite its western appearance and facade of impartiality, is entirely arbitrary and capricious. For years Dubai has touted the benefits of its "moderate" and "western" legal system to attract foreign white collar workers (primarily from the UK), a judicial sell-side pitch that belied the jurisdiction's naked favoritism for the local Emirati caste and the fact that a thick layer of Anglo-Saxon foundation in fact just powdered a bulbous Islamic judicial system.
2008 GDP for all of the UAE was around $270 billion. This makes Dubai's debt alone nearly 30% of UAE's GDP on top of the 22% public debt:GDP ratio that the UAE already endures. This doesn't even count another $75 billion of external debt floating around. Fortunately for the UAE it enjoyed about a $40 billion surplus in 2008 owing to the benefits of being an extraction economy. Further, a slug of $65 billion in direct foreign investment buoys the entire UAE. Wonder how sticky that is.
Despite this, Dubai itself enjoys almost none of the benefits of other area extraction economies. It's organic oil revenue is small to non-existent.
A Deleterious Disregard for Even the Most Basic Fixed Cost Analysis
You are building an oasis in the desert. Let us repeat that. The desert. They run the UAE Desert Challenge race there. It is an adversary that never sleeps and is constantly fighting to reclaim for its accretive redish sands the human footprint in the region. Simply keeping the roads clear, much less maintaining infrastructure that approaches what western Europeans would consider a "resort" is a obscenely expensive endeavor.

Dubai was already chalking up records for the most power consumption per capita (on the order of 20,000 kWh per year) and the highest water consumption per capita (the desert, get it?) in 2007 and still hitting 15% annual gains in both figures with ease. We won't even comment on Dubai's 2005 distinction for the world's largest per capita carbon footprint. If you can imagine this, over the last ten Dubai contracted three separate consulting firms to study the feasibility of supplementing their power needs with solar technology. None resulted in a report that suggested even highly subsidized solar power would generate net energy returns on investment. (Given the local weather, this bodes poorly for solar power).
U.S. Levels of Entitlement Accounting Delusion
The Emirati caste enjoy nearly 100% subsidies for housing, higher education (up to the PhD level along with 100% coverage of foreign travel and living expenses to study abroad) and what amounts to lifetime employment guarantees. It is no accident that a large fraction of Emirati work in government jobs. Firing an Emirati is so difficult even United States Postal Workers and Teacher's Unions would be envious.
Something Approaching a Wholesale Overappreciation of Local Construction and Engineering Competence
Dubai depends almost entirely on an extremely base foreign worker class for construction. This has given Dubai the distinction of mounting the most expensive (even size and scope adjusted) projects in the world. Presented for your review, one of many such examples:
Gee, that looks sort of expensive.
An Oddly Willing Embace of Perpetual Growth Valuations
Back in 2007 (it makes one almost misty) one could watch Dubai wax an impressively deadpan muse that sustained double digit annual gains represented "modest growth," mostly predicated on a wanton dedication to consumerism that rivaled even the United States.
The only real question anymore is: Why was anyone surprised?
- 1. Laura Cochrane and Tal Barak Harif, "Dubai Debt Delay Rattles Confidence in Gulf Borrowers," Bloomberg, November 26, 2009.
- 2. Johann Hari, "The Dark Side of Dubai," The Independent (April 7, 2009)
- 3. Megan McArdle, "Why Bankruptcy Matters," Asymmetrical Information (April 14, 2009).
- 4. Ibid.
- 5. Mike Davis, "Fear and Money in Dubai," New Left Review 41 (September-October 2006).
- 6. Pepe Escobar,"Dubai Lives the Post-Oil Arab Dream," Asia Times (June 7, 2006).
- 7. The first inklings that homosexual rape might actually be a crime and recognition, grudgingly accepted after rather pointed French boycotting efforts, of AIDS as a real and serious problem in Dubai, are both recent examples of social progress in Dubai forced by exposure to Western ideals and the financial pressures of a state dependent largely on tourism and foreign capital for prosperity.
- 8. Johann Hari, "The One Lesson of This Crisis is the Need for a More Equal Society," The Independent (April 15, 2009).
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Since this is apparently the 'black friday surprise' everyone seemed to be looking/waiting for, any guesses what happens now when the US markets reopen (in general) & gold in particular?
Take a look at the European markets: average is -3.36%.
1oz of Gold in Euro is = € 11,782.75
Exposure to Dubaï is estimated to be between € 13bil to € 26bil.
Satanic prediction: this is going to be ugly (Duh).
Nah. The PPT will swing into action; buy up a shit load of MBS sludge with the instruction to gun the market higher. It's already happened; Dow futures went from -179 to +2.
1oz of Gold in Euro is = € 11,782.75
Anywhere I can short it at that price?
(ooops)
Note to self: stop commenting on ZH when too tired to think straight.
All my apologies.
Shit! and I was selling them at 800€ just now!
Thanks for the update on gold's real price!!!
Gold trades worldwide and is currently up 60 cents. You can follow it on Kitco if so inclined.
It dawns on me that "up 60 cents" is relative to a close I did not specify. For clarity, gold sits at 1093 as I type.
I'll buy all you got @ $1093
I think several bagholders like you were just run over tonight.
Check out this slideshow. What the fuck were they thinking?
http://marketplace.publicradio.org/middleeast/ss/dubai_aerial/
4 too many digits on #11
Babylon with artificial islands?
Looks way cool but imagine this sort of development acitivyt in the US deserts. You wonder who the heck are they building all this stuff for? How many people can afford 7 star hotels and of those that can afford it, how many are wanting to visit Dubai on a regular basis to make it worth their while?
Problem is that when Gigantomania and poor business planing mix. If Dubai would at least flood the markets with $25 barrel oil, they could make their competition go away.
It costs them $4 a barrel to explore and deliver to the ports. They can survive $25 barrel but many others couldn't. Also, their biggest and fattest customer the US of A would be happy as a pig in shit and driving ever larger automobiles. Win win win!
"Looks way cool but imagine this sort of development acitivyt in the US deserts."
Las Vegas.
Phoenix.
Dubai actually has very little oil.
- Sand...and photo shop.
+10
Thinking thats the operative word now isnt it ?
CNBC back in Feb,
http://video.nytimes.com/video/2008/07/18/business/media/1194817094085/e...
Dubai house prices might drop as much as 70 percent from their peak last year. They’ve already fallen by more than 50 percent, making the emirate the worst-hit market in the global real estate slump.
http://www.bloomberg.com/apps/news?pid=20601109&sid=aX1vnWP7gBVM
Marla, It's Thanksgiving!?? Could this have waited until Friday?
Are those "Footnotes"?
What's Thanksgiving?
It's an excuse for people to pig out...
what's the average american's excuse the other 354 days of the year?
Cause we can...lol Happy Thanksgiving Lizzy!
Right back at you.
That picture is MUCH better!
Haha! so true...yet sad at the same time.
This avatar is the real me..the other one which caused breakouts, skin rashes and kreepy comments was so perfect for the occasion...x
botox is miracle drug
its the celebration of takin without explanin ... last year we had a great re-enactment
"What's Thanksgiving?"
Thanksgiving is a day where Americans show their true colors and celebrate a thank you to the people that allowed the American Colonies to survive the winter, before the colonies proceded to erase them from the pages of history... hmmmm where have I heard that before?!? But don't tell any red blooded American that... they will git pissed....
Forewarned is forearmed.
And the person behind the nickname "Marla Singer" could be British or Canadian, for all you know. No Thanksgiving outside of the USA (surprise!).
puleeze, she's a little more exotic than british or canadian
Grüezi mitenand, ich mues öppis mälde. Swiss-German?
I strongly suspect that, like "Tyler Durden", the nickname "Marla Singer" actually is a cover for several entities. Some of these entities may be British and of the female gender. Or not.
Then again, Anton LaVey has been dead since 1997. Make of that what you will.
Marla isn't Tyler, I suggest checking out her music on ZHRadio.
Greetings Anton,
Not that it matters but Marla = http://equityprivate.typepad.com/
Ahem! We have Thansgiving in Canada; it's just a month earlier.
I stand corrected. All my apologies.
One upping canadian. Just because you're bigger and on top of us!!!
I wonder what happens when an American's skillset gets blackballed on Wall St? Maybe they move to Canada.... Good riddance.
Don't be dissing my canadians. Ok. They are a little annoying when they grind the coffee a bit too much but hey it get's cold up there.
nor inside the 'former' USA (the republic of Lakotah that is)
Amen Brother. I'm a little Sioux Blackfoot myself.
http://www.youtube.com/watch?v=wHwjB8OWYK0&feature=related
Hey!!
We have Thanksgiving in Canada.
We just have to have it earlier, since we have so much less to be thankful for.
Thank you for confirming my suspensions of the great bubble illusion per se americana style. Little ole me suspects with current political ambitions or lack there of, if we in FL, USA were having to multiply tax accessed values 250%-500% (mainland, beach respectively) to come up with value...we have further to go and possible overshoots to the bottom then I knew Dubai had something of a bitter pill to swallow. Yuck and that saltwater tastes terrible going down! Happy Turkey Day Dubai American-style!....Don't ya secretly miss Love American Style sheeple?
Saltwater is palatable. It's a gloomy day today, Ruth. Well mostly this morning.
http://i49.tinypic.com/2lctims.jpg
No love lost for Love American Style. Forced entry by the Squid has no appeal anymore. (He's too rough and i like it tender and loving)
Nice picture, but after spending some time there I find it quite hard to disagree. Dubai was a crazy place and was fun till it lasted, of course if you were lucky enough not to buy any real estate there (or at least flip it before the second half of 2008).
Dubai does say one thing about capitalism, in a capitalist country when the government borrows 100 billion you get skyscrapers, beaches and high-tech trains.
In a socialist country when the government borrows 1,000 billions you get war, death and pestilence.
So you're saying the US is socialist? I guess halfway anyway.
So what you're saying is the U.S. is socialist? Some have made that argument, though I'd switch out the word socialist (since in practice and theory it diverges drastically) and use a more generic word.
The abandoned luxury cars in Dubai were entirely predictable. Quite a gallery.
http://directorblue.blogspot.com/2009/09/things-are-tough-all-over-luxur...
I'm confused. Since when does quasi-totalitarianism and abuse of position mean that any investment-related endeavours are doomed to failure? SInce when is "expensive" a criteria for failure (Louis Vuitton for example)?
The luxury cars left abandoned in Dubai:
http://directorblue.blogspot.com/2009/09/things-are-tough-all-over-luxur...
So does this mean Manchester City will run out of money?
Sheikh Mansour bin Zayed Al Nahyan is from Abu Dhabi not Dubai, so M. City should be ok for now.
Help me understand this.
Sheikh Mansour is a member of the Abu Dhabi royal family and Minister of Presidential Affairs for the UAE. Dubai is the largest city in UAE, while Abu Dhabi is the capital of and second largest city in UAE.
When Bloomberg writes:
Dubai shook investor confidence across the Persian Gulf after its proposal to delay debt payments risked triggering the biggest sovereign default since Argentina in 2001.
Dubai is one of seven monarchies that form a federation that is the UAE. Abu Dhabi is a separate monarchy from Dubai that is also a member of the UAE federation. I read the Bloomberg piece as suggesting a debt default by UAE's largest city and financial center would send the UAE into a debt crisis. How independent are the seven monarchies? I understand Dubai has its own judicial system and a degree of autonomy but is the below the wrong way to think about the UAE?
2008 GDP for all of the UAE was around $270 billion. This makes Dubai's debt alone nearly 30% of UAE's GDP on top of the 22% public debt:GDP ratio that the UAE already endures. This doesn't even count another $75 billion of external debt floating around.
Are the totalitarian horrors described above limited to Dubai, or endemic to the entire country? Emiratis are an ethnic group and citizens of UAE, right? Are Dubai and Adu Dhabi largely financially distinct and independent?
Thanks for any help here.
posted earlier -
http://www.bloomberg.com/avp/avp.htm?N=av&T=IHS%27s%20Randolph%20Says%20...
Abu Dhabi is more stable financially than Dubai: they were not exposed to the real estate bubble to the extent Dubai was, much of the UAE oil is in Abu Dhabi (92 of 98 bln bbl), and Abu Dhabi is a home to the world's biggest SWF ($600 bln by some estimates, of course that's a matter of speculation how much actually is there as long as they don't disclose this information http://www.swfinstitute.org/fund/adia.php ).
Again, just looking at GDP probably won't give you a whole picture as long as there's Abu Dhabi SWF with some $600 bln. In February, central bank of UAE provided Dubai with $10 bln loan ( http://online.wsj.com/article/SB123532630416442781.html ) and a consensus was that Abu Dhabi will continue to bail out Dubai (probably in exchange for assets). Why it didn't happen this time is a good question, but all talks are happening behind the closed doors. So, my guess is as good as yours.
I wouldn't call it a totalitarian system, certainly not in a same sense that you would say it about Iran or North Korea, out of the Persian Gulf states UAE has probably the most liberal laws after all. Expats from Asian subcontinent are certainly in the worst position there: http://www.hrw.org/sites/default/files/reports/uae1106webwcover.pdf
Yup.
I see late night meetings at some financial institutions. Very long, anxious meetings tonight where words like "exposure" will be used. Happy Thanksgiving, whatever that is?
Any estimates on Goldman's profit from the default ??? heehee this could actually be a legit trade.
The whole Dubai insanity would not have been possible if it weren't for the fascist central banking system we have (the Fed) printing up money. So much for a rebuke of capitalism, Dubai is a rebuke of fractional reserve banking and fiat money.
+1.
Dubai is just another example of the malinvestment of the massive global dollar bubble. Another one of The Maestro's masterpieces.
BTW the US has its own shining examples of malinvestment in the desert: Phoenix and Las Vegas.
Democracy Russian style:
http://www.ft.com/cms/885d7916-e3aa-11dc-8799-0000779fd2ac.html?_i_refer...
makes you wonder about the mr. Spitzer's case. Wasn't he "caught" because his name lightened up in one of those financial databases available for few? What a wonderful way of destroying your potential political opponent.
He was Clinton'd (kneecapped, basically) for stepping out of line. JFK, on the other hand, was shot in the head, just like Benazir Bhutto.
is the palm island project still sinking...?
What do you think? They can't even service the debt on their ports, do you think the luxury real estate in the biggest shitspot city in this world is selling like pre-2008 CDO's?
i mean "literally". i read where those palm islands they were creating , were in fact slowly sinking and they don't know what to do about it. also i read that the main sewer line from the city dumps near the palm island project. what were they thinking? such a tremendous waste of money on a needless project. they were going to build some tall buildings out there on these man made islands but they had trouble with the foundation pilings etc. what a boondoggle. a friend of mine lives there full time and she won't even talk about on emails. she says you can be arrested for even discussing what is really going on around there in a way the government does not like......
gmak ..... you simply missed the relevant points of the entire presentation. There was noting about "expensive" being a criteria for failure. Dubai is a perfect representation of the old biblical proverb about the futility of building something on a foundation of sand (in this case both literally and figuratively).
"...
It defies explanation how a state with debtors' prisons, no bankruptcy proceedings to speak of, slave labor punctuated by the seizure of workers' passports and brazenly broken employment contracts left unenforced by local authorities, almost non-existent freedom of the press, arbitrary and draconian drug enforcement, a ban on homosexuality punishable by lengthy prison terms, government filtering of the internet, rank favoritism in the form of selective enforcement against non-citizens, massive subsidization of the Emirati caste for everything from housing to education, labor laws that make it near impossible to fire a citizen but that grant effectively no rights at all to expatriates, academic oppression by the secret police, no religious freedom of any kind, no woman's suffrage, no men's suffrage, massive, unchecked deficit spending, and, to top it all off, a totalitarian monarchy with what amounts to unlimited power, could even remotely be described as "global" "liberal" "neo" or "capitalist," much less a poster state for "global neo-liberal capitalism." The only real laissez faire aspects of Dubai's existence are lax immigration policies (until one is unemployed) and the absence of income tax. Hari is so taken with the Dubai-as-capitalist-paradise theme, and just to make sure we didn't misunderstand his prose as something other than an indictment of capitalism- or perhaps because he just can't help himself- he closes by intoning in sarcastic context "Dubai is Market Fundamentalist Globalisation in One City."
And, really, could there be anything more absurd than associating Dubai with Milton Friedman in any way other than to highlight Friedman's belief that economic freedom, true economic freedom, has the effect over time of corroding authoritarian regimes? In this connection it isn't particularly hard to point out that the widespread exposure to the citizens of more liberal democracies (France and Great Britain in particular) has, in the case of Dubai, managed to do at least some good- though it seems quite small in comparison to the massive walls of oppression that still dominate.7
I have grudgingly come to the conclusion that the prevalence of this error is mostly inadvertent. That capitalism has become so aligned in the minds of its critics with conspicuous wealth or excess, that the two are linked wherever wealth and excess is found. A sort of sloppy disregard for causality, as it were, such that concentrated wealth must, a priori derive from the evils of capitalism (rather than a source so obvious that you were able to write 4 pages on it before running badly aground: a totalitarian, slavery-subsidized, theocratic state). In a sort of crude way this perverse and wordy haiku is a great compliment to capitalism, though possessed of neither the wit of brevity nor the elegance of meter. There are fates much worse than being associated, albeit erroneously, with the quick accumulation of wealth wherever it is found- provided wealth in and of itself does not, as any annual income above £25,000 obviously does Hari,8 intrinsically offend you, that is...."
Well aren't we tough to fool. They'll take that as a challenge!!!! LOL Especially that sloppy disregard for causality comment. That's just cold and cuts deep. You're almost mean enough to make a psychopath cry. Ya basterd. :))
Nice way to spell it out.
Google stopped listing the Toronto Stock Exchange on its Finance page this morning...
Didn't want Americans to get alarmed about what was happening in Canada/Europe???
"ex"-googletard=White House deputy chief technology officer Andrew McLaughlin
MSNBC, Google, Obammy got the propaganda covered yo..
As if.
Could you imagine the toxic CBS plack that has grown in Mike Wallaces brain over the years? From Ayn Rand to 2010 Dubai.
He has been forced to see so much and say so little.
In 1959 interviewing Ayn Rand.
http://www.youtube.com/watch?v=7ukJiBZ8_4k
(notice the mic around his neck and no ear piece. The Barack admin would call that Free Ballin')
A 60 Minutes interview of Sheikh Mohammed bin Rashid al Maktoum
http://www.youtube.com/watch?v=MrjFz4bHMug
The later video showcases the misdeeds of Sheikh Mohammed. What is strikingly odd is a comment in the comment section from a week ago by 'uzijohn'
"The greatest men in history are always the builders, glad to see a leader use his? time and energy toward positive and productive ventures,
Sheikh Mohamed is quite a visionary,
He knows the oil wont last forever, but the investments he's making today, will reap rewards for his people now and far into the future"
Does Sheikh Mohammed have too much time on his hands? Buy Dubai!
You mean ex-Goldmanite Aryan Rand?
"forced to see so much and say so little"
Arline Mann is an attorney. She is Managing Director and Associate General Counsel of Goldman, Sachs & Co.
*yawn* Thanks for providing me the actual proof behind why I always disliked Rand.
"I wanted to destroy something beautiful"
Nothing more beautiful than the philosophy of a lie.
Did'nt they just have a 60 minutes story about this place a few months ago? Gonna be finished and ready to open? Then put it on amazing race to show it off? Do I really watch that much tv? Reminds me of the last year in Alaska for the pipeline, but the money was good right up to then.
thank you for highlighting the least quoted but most oppressive aspect of the Emirati regime: the plight of the slave-labour class
typically lower middle class south asians, offered a better wage vs back home plus accomodation, only to find themselves tricked into a blackmail situation whereby they must accept all forms of mistreatment because their employer holds their passport.. and without a passport, you are a nobody and you have no legal rights in the UAE... no healthcare, no holidays, no lunch break, no clean drinking water, no aircon, no safety standards... NOTHING
whats worse is that wealthy foreigners flocked to this land of illusion, paid top-dollar to stay at hotels built by this same slave-labour force and even dabbled in purchases of their apartment blocks - whilst the true producers of such gaudy creations who toiled 12 hours shifts for a pittance were never rewarded nor acknowledged..unless you believe $200 per month is justification for such horrific labour conditions
Human Rights Watch visited Dubai and complained -but nothing was done, and it was property speculators and nouveau-riche tourists that funded the entire scheme
the best thing that can happen is that Dubai implodes and such human suffering is never allowed to happen ever again
Dubai has an upside.
With an excellent climate and millions of unoccupied dwellings....
The world should export all of its homeless population to Dubai and let them live "rent free" for awhile....
LOL....
In a couple of years, its going to look like South Beach Miami prior to 1986.
Full of run down, broken down old buildings inhabited by hordes of drug addicts, junkies, hookers, homeless, etc.
Napalm, son, nothing else in the world smells like that.
http://www.youtube.com/watch?v=xHxIXgEkLA8&feature=PlayList
http://www.youtube.com/watch?v=wqoF-Xu4gIw
Damn.... I might want to move there then
Those were the good old days, but mostly there were retired Jews on OD, despite the Scarface scenes to the contrary.
http://www.youtube.com/watch?v=UUW9MWLIQYw
Marla, that was great. Thanks a lot. My knowledge of Dubai must have increased by at least 500 percent. (Off a low starting point, admittedly, but still. Fantastic job.)
Thanks Marla,
Both Mike Davis and finem respice come off as slightly ridiculous here. To declare a debt financed gobal-petro-dollar-mercantilist-authoritarian Dubai the poster child for Milton Friedman is a bit foolish. But to have such an idealized vision of supposed free markets and their ability to bring "freedom" to the people living under authoritarian regimes is just as silly.
And if Mike Davis's reading of Milton Friedman is weak, his reading of Dubai has some explanatory power. Whatever one might call the monster of Dubai, as playground for where global investment meets petro dollars or as yet another part of the developing world where day labor is treated like chattal, Davis captures some of the contrasts, which is what makes it so fascinating and disturbing.
Marla, the post was incredibly well written.
A little over adverbial IMHO, but, then again, I have killed a lot of brain cells, so it's probably me.
LoL, Rollerball is on a roll. I better not say anytink or the ZH sensors will.....
Sheik Ahmed speaks:
11/26 02:28PM *DJ Dubai World Debt Standstill Carefully Planned - Sheik Ahmed
11/26 02:28PM *DJ Dubai's Sheik Ahmed Says Understands Investor Concern
11/26 02:29PM *DJ Dubai 'Remains An Attractive Regional Market ' - Sheik Ahmed
I'm pretty used to the tendency to Delphic inscrutability of posters and commenters here at ZH, but would it be too much to ask what that is in fact a chart of?
Or why a one-day drop to a weekly low is so gosh-darned unprecedented?
LOL LOL and LOL at the 'Sheik'
How about a little history lesson about how the UAE was formed?? Let me guess, the British were somehow involved?
If you have read up on peak oil, all of this development looked both tragic and comical years ago. I have sat with my son in my lap at the comupter, laughing to tears at these buildings. A child can see it.
I guess it is going to take disaster after disaster before people wake up. We must literally be forced to change, like the alcoholic who needs to hit rock bottom before s/he gets into a 12 step program. Problem is, some folks die before their rock bottom ever manifests.
Thank you, Ms. Creant.
There is light in the darkness ...
realizing you (we/they) have a problem is the first step to recovery
Now we know why those T-Bill rates went to negative territory several days ago. Those Sheiks were loading up before dropping the "mother of all bombs".
Interesting to note that zerohedge was being ridiculed in other blogs for being too "pessimistic" in pointing up the issue. Instead, other media outlets and blogs preferred to side with the blog Across the Curve view that it was a mere "window dressing" by banks. Now you don't see Mr. Across the Curve retracting his ominous and well off the mark commentary.
+1
Sing along with me: "snap fingers..."
Dubai...oh my shunananuh, Dubai goodbye lala lalala...rinse repeat.
You damn yankees got lots of problems (and can be a tad pushy at times) but I am glad you are my neighbour rather than those racist hypocrites. I feel sorry for all the poor slaves, er workers who are going to find things get really bad soon.
So - now they go to debtor prison, right?
From the atlantic article:
Why is the state so keen to defend this system of slavery? He offers a prosaic explanation. "Most companies are owned by the government, so they oppose human rights laws because it will reduce their profit margins. It's in their interests that the workers are slaves."
--
err, that's not capitalism, redefined or otherwise.
Would be fun to have the Burj Dubai as a modern version of the Sagrada Família...
Wait to you see what happens to Trumps Burj.
http://www.trumpoceanclub.com
This is freaky wrong in so many ways. Hell of a sales tool.
"Your future is in Panama" (from the Trump Ocean website)
Nice location for Timmay and Bennie's exile
(that building resembles the Burj-al-Arab a bit too much!)
Don't buy.
Great piece Marla, thank you for it.
"Milton Friedman's beach club: Dubai, in other words, is a vast gated community, the ultimate Green Zone. But even more than Singapore or Texas, it is also the apotheosis of the neo-liberal values of contemporary capitalism: a society that might have been designed by the Economics Department of the University of Chicago." (footnote # 5)
- fantastic line there from Mike Davis; thanks for the link, Marla ... frickin Markowitz is hailed as a saint and not the Keynesian Kudlow that he ought to be.
nice photo of a highway in the desert Marla - are you sure that's not Highway 1 near Winnipeg Manitoba in the dead of winter
http://4.bp.blogspot.com/_rbjgqdXMI-Q/ShndkK6IvvI/AAAAAAAABQ4/co7gC8gGLT...
Marla,
This article clearly demonstrates your fertile mind, wide ranging experience, and a sharp Cartesian ability to reason. What unfortunately it doesn't demonstrate is sufficient attention to history. Capitalist systems, including our own - - child labor, seven day work week, sub-subsistence wages, debtors prisons - have done all the things you decry in Dubai at various periods. That they no longer do so in the West is attributable to their dominance over third world economies that they exploit in turn. If the current situation diminishes the available surplus you will quickly see them return to more severe methods to control the labor of the lower class at home and abroad.
Sincerely
SS
"And every one," saith He, "that heareth these sayings of mine, and doeth them not, shall be likened to a foolish man, which built his house upon the sand."
And well did He call this man "foolish": for what can be more senseless than one building a house on the sand, and while he submits to the labor, depriving himself of the fruit and refreshment, and instead thereof undergoing punishment? For that they too, who follow after wickedness, do labor, is surely manifest to every one: since both the extortioner, and the adulterer, and the false accuser, toil and weary themselves much to bring their wickedness to effect; but so far from reaping any profit from these their labors, they rather undergo great loss. For Paul too intimated this when he said, "He that soweth to his flesh, shall of his flesh reap corruption."To this man are they like also, who build on the sand; as those that are given up to fornication, to wantonness, to drunkenness, to anger, to all the other things.
Get your own words. Get your own wisdom. Lest ye be treated like an bobblehead ego extension of an idiot compensating for his idiocy by making as many people as he can extensions of his own ego.
A fool beith he who thinkith he halth nothing to learnith from posterity...
original enough for you?
Go geteth him Steve. You know you're onto something when you get junked 4x.
Hey Marla,
You guys are just awesome. Do you ever sleep my Lady. Well, the Thanksgiving day parade in NY went well. The cheerleaders are cheering and the Broadway shows are singing, all are getting ready to feast and give thanks and getting ready to shop tomorrow for all is well.
Wait, wait, what is that I see on the top of the ridge. Hmmm, ahhh, on the other side there is Rome and at one of the coliseums there is Nero playing his fiddle and oh my God, Rome is burning.
The best.
Don't believe that because Dubai World bondholders are going to be given a haircut that business in Dubai is going to stop. This is one place where no special interests can blockade the government with strikes. The budget can be balanced overnight. Why would the Sheik finance his projects with the bond markets instead of his own money unless he knew they were extremely risky? He gambled and stuck foreigners with the downside risk, while he gets to keep his much bigger kingdom.
Real estate prices are going to come down a lot, as they did after the Asian crisis a decade ago, but this was the whole point of massively increasing the supply of real estate. Dubai is still the most business and immigrant-friendly place in all the Middle East, which is why it is filled with refugees from Iraq, Iran and Palestine.
www.bustthetrust.org/ strikes again!
I don't know. Do you mean
http://thetrustbuster.com/trustbuster_video_market_god_small.html
? Cuz that's funny. Reminds me of the sidewalks around 85 Broad street.
So much for my favorite theory of blaming the Jews for the economic collapse. How they infiltrated Dubai is one story too difficult to cook up.
put 'em up put 'em up
http://www.youtube.com/watch?v=4trn2lJxl00
fuck you OP, you're all a bunch of goddamned terrorists and I hope you fry in hell.
Or in Dubai when no one can afford air conditioning anymore.
Dude, can't wait for Monday.
I find it ironic that in this culture there is no bankruptcy, there is debtor's prison (which I cannot claim to fully understand) AND a government holding vehicle is considering a DEFAULT and is in need of a REORGANIZATION.
If they do this, will they need to put themselves in prison?
Seriously?
While I am no specialist on that subject, I do know that Islamic law is bit tricky when it comes to lending. And don't forget that there is a law for moslems, and another - quite different - law for non-moslems. The word 'theocracy' is quite correct when it comes to countries such as the UAE.
Separation of church and state is a wonderful thing. Especially when you consider the consequences of having one priest (or imam) meddle with your finances...
Thanks for your response, it sounds like a good start to thinking about the answer. Don't know why you got junked.
I think the real story is that Tyler Durden is going to lose millions in Dubai.
http://money.ninemsn.com.au/article.aspx?id=976699
Tyler has an underwater property?
Jingle mail, Jingle mail, Jingle all the way,
Oh what fun, it is to default, on a condo on the Baaay!
Doh...bye
Capitalism is insanity to me. Theodore Adorno knew that in modern terms. It destroys everything with a false promise of security, and this it delivers, but its a security that is skin deep, as is any security not based on spiritual or energetic principles. It makes man afraid that without it he cannot live. Capitalist societies are socities of fear, we all have fears today that indigenous people knew nothing of. We have no idea what spiritual power even means. We are seperated materially from the environment and no longer learn its abundant lessons. The aborigines say that as the white man moves over the earth, pillaging its resources, its very lifeblood, the Spirit is leaving.
Chief Seattle’s Letter of 1852
“The president in Washington sends word that he wishes to buy our land. But how can you buy or sell the sky? The land? The idea is strange to us. If we do not own the freshness of the air and the sparkle of the water, how can you buy them?
“Every part of this earth is sacred to my people. Every shining pine needle, every sandy shore, every mist in the dark woods, every meadow, every humming insect. All are holy in the memory and experience of my people.
“We know the sap which courses through trees as we know the blood that courses through our veins. We are part of the earth and it is part of us. The perfumed flowers are our sisters. The bear, the deer, the great eagle, these are our brothers. The rocky crests, the juices in the meadow, the body heat of the pony, and man, all belong to the same family.
“The shinning water that moves in the streams and the rivers is not just water, but the blood of our ancestors. If we sell you our land, you must remember that it is sacred. Each ghostly reflection in the clear waters of the lakes tells of events and memories in the life of my people. The water’s murmur is the voice of my father’s father.
“The rivers are our brothers. They quench our thirst. They carry our canoes and feed our children. So you must give the rivers the kindness you would give any brother.
“If we sell you our land, remember that the air is precious to us, that the air shares its spirit with all life it supports. The wind that gave our grandfather his first breath also receives his last sigh. So if we sell you our land, you must keep it apart and sacred, as a place where man can go to taste the wind that is sweetened by the meadow flowers.
“Will you teach your children what we have taught our children? That the earth is our mother. What befalls the earth befalls the sons of earth.
“This we know: the earth does not belong to man, man belongs to the earth. All things are connected like the blood that unites us all. Man did not weave the web of life; he is merely a strand in it. Whatever he does to the web, he does to himself.
“One thing we know: our God is also your God. The earth is precious to him and to harm the earth is to heap contempt on it creator.
“Your destiny is a mystery to us. What will happen when the buffalo are all slaughtered? The wild horses tamed? What will happen when the secret corners of the forest are heavy with the sent of many men and the view of the ripe hills is blotted by talking wires? Where will the thicket be? Gone! Where will the eagle be? Gone! And what is it to say good-bye to the swift pony and the hunt? The end of living and the beginning of survival.
“When the last Red Man has vanished with his wilderness and his memory is only the shadow of a cloud moving across the prairie, will these shores and forests still be here? Will there be any of the spirit of my people left?
“We love this earth as a newborn loves its mother’s heartbeat. So, if we sell you our land, love it as we have loved it. Care for it as we have cared for it. Hold in your mind the memory of the land, as it is when you receive it. Preserve the land for all children and love it, as God loves us all.
“As we are part of the land, you too are part of the land. This earth is precious to us. It is also precious to you. One thing we know: there is only one God. No man, be he Red Man or White Man, can be apart. We are brother after all."
thanks for posting that. how much wisdom we have lost.
people are all the same then and now, but clearly there is a fight to discredit any notion of man having a soul, to replace that with the idea that we are fully and completely in the material realm.
this post made me cry... thanks u big JERK@@@
"And if we sell you the land, just don't build any casinos, for as our grandfathers tossed the spear at the running antelope, we shall toss the dice. And the air, so precious to us, is filled not only with our spirit, but also the smoke from the tax free cigarettes we peddle."
"Harbor no illusions my little Doey-Eyed Deer in the Headlights; it is ashes to ashes and dust to dust, and we're all---red, white, yellow, brown or black---just the same dirt in between."
When laws are used to manipulate instead of protect you can't call it capitalism anymore. When the upper-crust of society, and their buffer class just below, get to skirt the laws because of monied influence it is no longer capitalism.
It's just corruption. The US broke over 400 treaties with Native Americans. How can we call that capitalism? That's just plain ole genocide.
You can't have a government based on ideals - but our system already accomodates a 'spiritual' understanding of the law: the fully-informed jury - the immediate and ultimate check of the people against the government. With a fully-informed jury the law is on trial, not the individual.
Our system didn't fail us - we failed our system by not zealously calling for the prosecution and due process of the usurpers.
http://fija.org/
http://en.wikipedia.org/wiki/No_true_Scotsman
Many of the same things could be said about Las Vegas...
Shouldn't this news have sold off US markets Wednesday? I buyin the dip.
The futures aren't up from Wednesdays close. They were shown as being up earlier today but they were up from a halt in trading today and not from Wednesday's close. More f'g monkey business from the exchanges.
I feel so bad I'm going to borrow somebody's Hummer and drive circles around the Pontiac Dome in Detroit just so I can contribute---indirectly through Abu Dhabi---to the Don't Cry for Me (I'm Just Another) Argentina Bailout Fund. And I'm going out and buy me an egg timer, because that is about the only competitive advantage Dubai has left.
Hey, when you have access via tribal ties to the "greatest transfer of wealth in the history of the world" (T. Boone Pickens, said before the tag team of Bernanke-Geithner raised the bar on both wealth transfer and the use of superlatives), you feel compelled to put good money to disuse. Thus, in a not-fit-for-human-habitation environment of infinite horizons of hot blowing sand, you simply cannot decide what is more wasteful: landfill or ladders to the sky. So you do both, Palm Island and Burj Dubai. And isn't recycling, even of petrodollars, all the rage?
The director of Dubai World (sources tell me) has made a last minute decision to perform Hajj this year and intends to forego pebbles and instead through Promissory Notes at Jamrat al Aqabah. Take that, Shaitan! (aka HSBC) Ruuh li Jehenam!
Johann Hari is a moron.
Excellent post.
Now for the BRIC countries to follow suit.
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