Just when we thought the world is coming out of the recession and when everyone can finally live happily ever after again. NOT.
Dubai has to drop this nuclear bomb on the world.
The news in summary:
Dubai is currently faced with a total debt amounting to a hedious $80 billion. Of which $60 billion is loaned out by the conglomerate Dubai World. Yes, this unscionable behaviour is preposterous, beyond belief I must agree.
It is currently requesting for a default payment which is to drag the payment by 6 months before they pay up.
The contract most directly affected is the redemption due in December of a 3.5-billion-dollar (2.9 billion euro) Islamic bond issued by Nakheel, the company behind Dubai's iconic Palm Jumeirah tree-shaped artificial island.
The more salient issue now is how is Dubai going to solve the problem of this gargantuan debt that is so crazy that it is actually shaking the world once more like how the Lehman Brothers did.
Be under no illusion that this will and can trigger off yet another financial crisis all over again if mishandled.
However, there is a solution. Dubai can turn to its neighbour, Abu Dhabi that is an oil-rich country with assets over 350 billion dollars. The question is, will Abu Dhabi lend Dubai some money to tide over this crisis.?
If yes, what are the conditions? Will it further exacerbate the crisis Dubai is currently facing? Most probably yes, I surmise.
Well, I will do more updates on the crisis of Dubai that has already shaken the world by the way these few weeks.
Do stay tuned and you had better throw away all your stocks and start shorting stocks or you might be in deep trouble yourself before you know it.
Credits -smileosmile, -saunalahti, -yahoo
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