The No.1 Trend Forecaster Gerald Celente: The Terror And The Crash of 2010

Listen AMERICA! Listen WORLD! Listen!!!

Stop listening to elite puppets like Obama, Bernanke and Geithner or you are doomed!!!


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Abu Dhabi bails out Dubai (again) with $10 billion

burj-dubai
The Burj Dubai

Dubai has received $10 billion from its neighbour Abu Dhabi to help Dubai World, the ailing state-owned conglomerate, repay a $4.1 billion Islamic debt which matures today.

A statement from the Dubai government said the extra $6 billion would be used to cater to the needs of Dubai World until the end of April 2010.

“We are here today to reassure investors, financial and trade creditors, employees, and our citizens that our government will act at all times in accordance with market principles and internationally accepted business practices,” Sheikh Ahmed bin Saaed al-Maktoum, the chairman of the Dubai Supreme Fiscal Committee said in a statement.

“Dubai is, and will continue to be, a strong and vibrant global financial center. Our best days are yet to come. ” (Sure!)

Nakheel, Dubai World’s property arm said it would meet its Islamic bond obligations – ‘sukuk’ – within the next 14 days.

The United Arab Emirates central bank would also inject liquidity as needed into banks that face exposure to Dubai World a source close to the Dubai government told Reuters

Read moreAbu Dhabi bails out Dubai (again) with $10 billion

Famous Investor Jim Rogers: Incompetence In Washington, Abolish The Fed And The Treasury

“Mr. Geithner has been wrong about everything for the last 15 years.”


Added: 12. December 2009

Dubai: Stock Market Drops Most in World on Dubai World Default Concern

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The future of Dubai.

See also:

Dubai World: Nakheel PJSC creditors will get barren waterfront land the size of Manhattan in default (Bloomberg)

Dubai World prepares to sell overseas assets (Financial Times):

Dubai World may be forced to sell overseas assets as part of its restructuring process, a top Dubai finance official conceded on Monday.

Abdulrahman al-Saleh, director-general of the department of finance, said that the holding company could sell some of its foreign investments and real estate holdings, which include the QE2 cruise liner and Cirque du Soleil, the Canadian circus operator.

“There is nothing to prevent [Dubai World] selling these assets,” Mr Saleh told Al Jazeera television.


Dec. 7 (Bloomberg) — Dubai shares tumbled to the lowest level in more than four months, led by Emaar Properties PJSC and Emirates NBD PJSC, on investor concern that a potential Dubai World default will hurt economic growth in the emirate.

Emaar, the United Arab Emirates’ biggest real-estate developer, slumped 10 percent, the most permitted by exchange rules. Union Properties PJSC closed at an eight-month low, while Emirates NBD retreated to the lowest since Sept. 14. The DFM General Index plunged 5.8 percent, the biggest fluctuation among global benchmarks tracked by Bloomberg, to 1,744.83, the lowest close since July 22.

Dubai World last week began talks with banks to restructure $26 billion of debt, including a $3.52 billion Islamic bond of property unit Nakheel PJSC, and said the remainder of its liabilities are on “a stable financial footing.” The emirate on Nov. 25 said it was seeking a “standstill” agreement on Dubai World’s debt, the holding company with $59 billion in liabilities. Dubai’s benchmark index has declined 17 percent since the announcement.

“Dubai stocks have resumed their slide following yesterday’s technical bounce and nervousness persists about debt restructuring issues,” Mark Friedenthal, fund manager at Abu Dhabi Commercial Bank, said. The benchmark index rose 1.2 percent yesterday.

Read moreDubai: Stock Market Drops Most in World on Dubai World Default Concern

Dubai World: Nakheel PJSC creditors will get barren waterfront land the size of Manhattan in default

Doomed!


nakheel-pjsc
A Nakheel PJSC construction site sits idle on the “The Palm Jumeirah” development, also known as Palm Island, in Dubai, United Arab Emirates on Nov. 30, 2009. Photographer: Matilde Gattoni/Bloomberg

Dec. 7 (Bloomberg) — Nakheel PJSC creditors may win the right to seize a strip of barren waterfront land the size of Manhattan if the company defaults on the $3.5 billion bond backing the development.

Investors will be able to seek foreclosure on the property’s mortgages should the Dubai World unit fail to repay the loan, according to the bond’s prospectus. The debt is due on Dec. 14, after which Nakheel has two weeks to remedy a default.

The property forms part of the Dubai Waterfront project, where Nakheel plans to build a city twice the size of Hong Kong Island. The site is empty except for a cluster of partly finished low-rise buildings, idle cranes and a few roaming camels. Dubai World is delaying the projects it hasn’t started because of the credit crisis, according to Abdulrahman Al Saleh, director general of Dubai’s Department of Finance.

“The project isn’t likely to happen,” said Saud Masud, a Dubai-based real estate analyst at UBS AG. “I’d be very surprised if anything is built in the next five years.”

Dubai World is trying to restructure $26 billion of debt after seeking a “standstill” agreement on liabilities including Nakheel’s sukuk bond on the waterfront parcel. The bond is secured against a 50-year lease on 677 million square feet (63 million square meters) of land that forms the southern part of the waterfront project, as well as a series of man-made islands in the shape of a crescent.

Value Mystery

The land backing the bond was valued at $4.2 billion by Jones Lang LaSalle Inc. three years ago, based on the entire project being ready by 2018, when it would be worth $11.8 billion, the prospectus said. Thierry Loue, Jones Lang LaSalle’s chief executive officer for the Middle East and North Africa, declined to comment on the land’s current value when contacted by Bloomberg today.

Read moreDubai World: Nakheel PJSC creditors will get barren waterfront land the size of Manhattan in default

The ruler of Dubai blasts global investors over debt crisis

“We are strong and persistent.”

No, Dubai is weak and dependent. Dubai is broke and has already been bailed out twice by Abu Dhabi and this would be the third time, but … Abu Dhabi will not race to bailout Dubai

“They do not understand anything.”

That was before, now even the most stupid investors do understand!

Dubai has been built ‘on sand’. The dream behind Dubai is artificial and meaningless.

Dubai’s dream is backed by nothing. Dubai is an illusion. I told you in 2008 about the plans of the elite to “drive the Arabs back into the desert” and that Dubai will go bust.

This is the same elite that governs the Fed and controls the entire US government. They will also destroy the US dollar and turn the US into a Third World country if they are not stopped now.


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Sheikh Mohammed bin Rashid al-Maktoum

Sheikh Mohammed bin Rashid al-Maktoum, the ruler of Dubai, today criticised international investors’ reaction to the Emirate’s debt crisis, claiming: “They do not understand anything.”

The defiant ruler, whose Government yesterday washed its hands of Dubai World, the state-owned conglomerate that owes $59 billion (£35.8 billion), also said: “We are strong and persistent.”

Read moreThe ruler of Dubai blasts global investors over debt crisis

Dubai and Abu Dhabi stock exchanges post record one-day falls

Dubai and Abu Dhabi stock exchanges suffered record one-day losses on Monday on fears over debt defaults, pushing London’s FTSE 100 index lower in morning trading.

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Shares on Dubai’s stock market suffered their biggest one-day fall in more than a year, while Abu Dhabi posted a record one-day drop.

Dubai’s index sank 7.3pc, its biggest one-day fall since October last year. Abu Dhabi’s Securities Exchange endured the largest one-day loss in its history as it ended the session down 8.3pc.

London’s index of Britain’s 100 biggest companies was down around 33 point – or 0.6pc – at 5212 just before 11am after opening up slightly.

While investors judged that the fall-out from Dubai’s debt crisis will not be enough to derail a global recovery, they remained jittery about the possible fallout for banks which have loaned money to the Gulf state.

Read moreDubai and Abu Dhabi stock exchanges post record one-day falls

United Arab Emirates Removes Sunday London Times From Newsstands

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DUBAI — The Sunday London Times newspaper was removed by authorities from shelves in the United Arab Emirates on Sunday amid intensive reporting of Dubai’s debt problems, an executive at the paper said.

The National Media Council ordered the paper blocked by distributors without providing a reason, an executive at the paper in Dubai told Zawya Dow Jones.

The Sunday Times edition available in the U.A.E. on Nov. 29 featured a double-page spread graphic illustrating Dubai’s ruler Sheik Mohammed bin Rashid Al Maktoum sinking in a sea of debt. The Times wasn’t given a reason for the block, or a timeframe when it will be lifted, the executive said.

A government official in Abu Dhabi, the capital of the U.A.E., said that the picture of Sheik Mohammed, which accompanied a story entitled: The sinking of Dubai’s dream, was “offensive.”

Under the U.A.E.’s media code, publications are prohibited from criticizing the sheikdom’s rulers. Local media and government officials have criticized international press coverage of Dubai’s debt crisis. Markets around the world fell last week after the government requested a debt standstill for one of its biggest conglomerates.

Read moreUnited Arab Emirates Removes Sunday London Times From Newsstands

Dubai Government Does Not Guarantee Dubai World Debt

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Marina residences at ‘The Palm Jumeirah’ development, also known as Palm Island, built by property developers Nakheel PJSC in Dubai is seen in this undated handout photo released to the media on Nov. 27, 2009. Source: Nakheel via Bloomberg

Nov. 30 (Bloomberg) — Dubai’s government said it hasn’t guaranteed the debt of Dubai World, the state-controlled holding company struggling with $59 billion in liabilities, and that creditors must help it restructure.

“The company received financing based on its project schedule, not a government guarantee,” Abdulrahman Al Saleh, director general of the emirate’s Department of Finance, said in an interview with Dubai TV, when asked whether the government was backing the debt. “Lenders should bear part of the responsibility.”

Dubai’s government said Nov. 25 that Dubai World would seek a standstill agreement with creditors and an extension of loan maturities until at least May 30, 2010. The announcement led to the biggest declines in Asian shares in three months last week and Europe’s worst rout since April. Investors were concerned the proposal risks triggering the biggest sovereign default since Argentina in 2001.

Dubai shares tumbled and Abu Dhabi’s stock index today fell the most in at least eight years on the first trading day since the announcement.

Nakheel PJSC, Dubai World’s property unit whose $3.52 billion Islamic bond is due Dec. 14, asked the Nasdaq Dubai stock market today to suspend its securities “until it is in a position to fully inform the market.”

Read moreDubai Government Does Not Guarantee Dubai World Debt

Abu Dhabi will not race to bailout Dubai

Sheikh Mohammed of Dubai is under mounting pressure to explain the emirate’s debt problems, after Abu Dhabi indicated that it will not write a blank cheque to bail out its neighbour.

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Race is on: power brokers in Abu Dhabi and Dubai are trying to find the right formula to solve the latter’s debt problems. The Yas Marina grand prix circuit in Abu Dhabi is pictured Photo: PA

According to officials, Abu Dhabi, the richest state in the United Arab Emirates, will be cautious about how and whether to assist Dubai World, the state holding company that this week suspended repayments on a $3.5bn (£2.1bn) Islamic bond due in mid-December.

Any sign that Abu Dhabi’s support may not yet be secured could push global markets further into turmoil tomorrow, analysts said, especially if Dubai’s ruler maintains his silence on the crisis beyond this weekend’s Eid religious holiday. Sources said he may be forced to disrupt the 10-day Islamic break to make a statement as early as tomorrow.

“We will look at Dubai’s commitments and approach them on a case-by-case basis. It does not mean that Abu Dhabi will underwrite all of their debts,” a senior Abu Dhabi official said.

“Until things become clearer, it is very difficult to make any further investment decision on the bonds. Many things have to be clarified by Dubai.”

Dubai World’s $59bn of liabilities make up the majority of the emirate’s total $80bn debts.

Read moreAbu Dhabi will not race to bailout Dubai

Rothschild Bankers appointed to help sell Dubai World assets

Bankers from Rothschild have been appointed to help restructure Dubai World with a mandate to dispose of some of the stricken conglomerate’s famous assets.

Paul Reynolds, head of Rothschild’s advisory operations in the Middle East, was this week asked to work for the Dubai government’s chief restructuring officer alongside Aidan Birkett of Deloitte, who was appointed on Wednesday.

The team is tasked with assessing the group’s assets, which is likely to result in a large scale sell-off of assets as varied as the QE2 cruise liner; Turnberry, the golf course that hosted this year’s Open Championship; and a raft of properties.

A spokesman for the Dubai department of finance confirmed that all options and asset sales would be considered, except for the DP World subsidiary that bought P&O, the British ports company. “I’m sure all of the assets of Dubai World will be reviewed,” he said. “The QE2 is one of them. It’s part of the restructuring process, though it’s too early to say whether there’s any sale in mind.”

Read moreRothschild Bankers appointed to help sell Dubai World assets

United Arab Emirates’ central bank to Back Banks in Dubai Meltdown

UAE faces up to $184 billion total debt: BofA-Merrill Lynch (Reuters):
LONDON (Reuters) – The United Arab Emirate (UAE) has total debt amounting to $184 billion at the end of 2009, according to estimates by Bank of America-Merrill Lynch, which said the region faces a heavy redemption schedule until 2013.



DUBAI, United Arab Emirates (AP) — The United Arab Emirates’ central bank is saying it “stands behind” local and foreign banks operating in the country, offering them access to money in a sign the Gulf Arab nation’s federal government is racing to curtail investor fears over Dubai’s crushing debt.

The UAE’s official WAM news agency said Sunday the central bank issued a notice to Emirati banks and foreign banks with branches in the country saying it would make available “a special additional liquidity facility linked to their current accounts at the central bank.”

Read moreUnited Arab Emirates’ central bank to Back Banks in Dubai Meltdown

Paul Krugman: Dubai or not Dubai — that is the question

Update:

Dubai World Unit Faces Default Test Monday With Bond Payment (Wall Street Journal):

DUBAI (Zawya Dow Jones)–Debt-laden Dubai World’s unit Jebel Ali Free Zone Authority, or Jafza, faces on Monday a coupon payment on a 7.5 billion U.A.E dirham ($2.04 billion) Islamic bond in the first key test of whether it will default.

Abu Dhabi to aid Dubai “case by case”: official (Reuters):

ABU DHABI (Reuters) – Abu Dhabi, capital of the United Arab Emirates and one of the world’s top oil exporters, will “pick and choose” how to assist its debt-laden neighbor Dubai, a senior Abu Dhabi official said on Saturday.

“We will look at Dubai’s commitments and approach them on a case-by-case basis. It does not mean that Abu Dhabi will underwrite all of their debts,” the official told Reuters by telephone.

Japanese banks’ exposure to Dubai at JPY100 bln -Nikkei (Reuters):

Nov 28 (Reuters) – Japanese financial institutions, including three major banks, face loan exposures of about 100 billion yen ($1.16 billion) in Dubai, the Nikkei business daily said.

Dubai debt woes may hit U.S. property market (Reuters):

“This downturn has had more of a global impact,” said Tony Ciochetti, chairman of Massachusetts Institute of Technology’s Center for Real Estate in Cambridge, Massachusetts.

“Dubai may have to unload some very prestigious properties at distressed prices and this will drive the price of all commercial real estate lower,” wrote Richard Bove, a banking analyst at Rochdale Securities in Lutz, Florida.


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The Atlantis hotel in Dubai.

Dubai or not Dubai — that is the question. Dubai’s sorta-kinda default (a state-owned enterprise seeking a rescheduling of its debts) is, by itself, not that big of a deal. But who else looks like Dubai? What kind of omen is this for the next stage in the financial crisis?

As far as I can tell, there are three ways to look at it — three stories, if you like, about what Dubai means.

First, there’s the view that this is the beginning of many sovereign defaults, and that we’re now seeing the end of the ability of governments to use deficit spending to fight the slump. That’s the view being suggested, if I understand correctly, by the Roubini people and in a softer version by Gillian Tett.

Alternatively, you can see this as basically just another commercial real estate bust. Either you view Dubai World as nothing special, despite sovereign ownership, as Willem Buiter does; or you think of the emirate as a whole as, in effect, a highly leveraged CRE investor facing the same problems as many others in the same situation.

Finally, you can see Dubai as sui generis. And really, there has been nothing else quite like it.

At the moment, I’m leaning to a combination of two and three. For what it’s worth (not much), US bond prices are up right now, suggesting that the Dubai thing hasn’t raised expectations of default.

Read morePaul Krugman: Dubai or not Dubai — that is the question

Bank of America: Dubai Woes May Reach ‘Sovereign Default’

Abu Dhabi Gets Pressure on Dubai (Wall Street Journal)

Dubai debt crisis triggers Wall Street sell off (Telegraph)

Dubai expansion fuelled by years of cheap money (Independent)


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The Burj Dubai, the world’s tallest skyscraper, towers over buildings under construction in the Business Bay area in Dubai, on Nov. 24, 2009. Photographer: Charles Crowell/Bloomberg

Nov. 27 (Bloomberg) — Dubai’s debt woes may worsen to become a “major sovereign default” that roils developing nations and cuts off capital flows to emerging markets, Bank of America Corp. said.

“One cannot rule out — as a tail risk — a case where this would escalate into a major sovereign default problem, which would then resonate across global emerging markets in the same way that Argentina did in the early 2000s or Russia in the late 1990s,” Bank of America strategists Benoit Anne and Daniel Tenengauzer wrote in a report.

A default would lead to a “sudden stop of capital flows into emerging markets” and be a “major step back” in the recovery from the global financial crisis, they wrote.

Read moreBank of America: Dubai Woes May Reach ‘Sovereign Default’

Pound Falls Broadly on Dubai’s Debt Problems

See also:

Dubai meltdown: Crash hits new low; The emirate can no longer meet its obligations; Celebrities caught out

OECD warning: Britain risks ‘debt spiral’


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The Palm Jumeirah, Dubai, the world’s biggest artificial island. Home prices have crashed.

LONDON (Reuters) – Sterling fell on Thursday, with the euro hitting a one-month high against the UK currency, on worries about British banks’ exposure to debt problems in Dubai and concern over UK economic health.

The pound also fell sharply against the dollar, which recovered some of the previous day’s sharp losses, and dropped to a six-week low against a broadly firmer yen.

Traders and analysts said sterling was coming under pressure following Dubai’s move on Wednesday to restructure its biggest corporate debtor, Dubai World, and delay repayment on some of the company’s $59 billion (35.6 billion pounds) of liabilities.

“There are concerns regarding the extent of the exposure of the UK banks to Dubai, hence sterling is coming under pressure,” said Ian Stannard, currency strategist at BNP Paribas.

European bank shares fell more than 3 percent on Thursday on concern about their potential exposure to Dubai debt problems. The fall was led by HSBC , Standard Chartered , Barclays , Deutsche Bank and Royal Bank of Scotland .

The euro broke above 91 pence for the first time in a month to hit a high of 91.29 pence. It was last at 91.21 pence, up 0.7 percent

Read morePound Falls Broadly on Dubai’s Debt Problems

Dubai meltdown: Crash hits new low; The emirate can no longer meet its obligations; Celebrities caught out

Dubai is broke and will become a ghost town.

“Altogether, the Dubai government and its companies have more than $80 billion of debt. The emirate, which has a population of only two million, has been forced twice to approach its oil-rich neighbour in Abu Dhabi for the funds to bail it out.”


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The Atlantis (!) hotel in Dubai

David Beckham and Brad Pitt are believed to be among the celebrities and sportsmen who bought villas in Palm Jumeirah in Dubai, a luxury development that juts out into the Gulf. But when the property bubble burst this year, residents saw the value of their investments collapse. Yesterday their situation worsened as Nakheel, the developer, and its state-owned parent made a request to suspend debt repayments.

The statement rocked credit mar-kets around the world and prompted analysts to question whether Dubai, the most populous of the United Arab Emirates, will be able to meet its obligations. The concern is that Nakheel will be unable to continue developing the Palm and neighbouring projects, leaving Dubai and its coastal waters an ugly, unfinished construction site.

When the 2,000 villas and townhouses on the Palm went on sale in 2002, they sold out in a month. Passing through en route to the World Cup in Japan and Korea were the England football team, and several players stopped off to sign up for £1 million properties on the artificial island, with Michael Owen, David James, Joe Cole, Andy Cole and Kieron Dyer, it was reported, joining Beckham on the beaches. Pitt and Angelina Jolie are also said to have bought homes.

Joe Cole was one of the few who got out in time. The Chelsea player sold his villa for about $3.5 million (£2.1 million) last summer as Dubai’s property bubble approached bursting point.

Nakheel is now in deep trouble and struggling to cover its debts. Dubai World, a government conglomerate that owns the developer, is $60 billion in the red. Yesterday’s announcement by the Dubai government that it wishes to suspend repayment of Dubai World’s debts for six months, including a $4 billion bond held by Nakheel that was due to be repaid next month, is the clearest indication that the emirate can no longer meet its obligations.

Work has stopped on several major projects around the city and companies have had to accept huge cuts in the value of their contracts. More than 400 projects worth more than $300 billion are said to have been cancelled or shut down as a result of the property collapse.

Read moreDubai meltdown: Crash hits new low; The emirate can no longer meet its obligations; Celebrities caught out

Dubai: Real Estate Down 50% From Peak

“Saud Masud, a real-estate analyst at UBS, said a decelerating price fall doesn’t necessarily point to market recovery. “The underlying trends are not supportive of a recovery in the market anytime soon,” he said.”

Related article:  In Dubai, guest workers are stranded without jobs


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Property prices in Dubai are down 50% from their peak in the third quarter of 2008.

DUBAI — Home values in Dubai have fallen by about half from their peak late last year in the wake of the global real-estate slowdown, a widely watched index of Dubai property prices showed Monday.

Property prices in the emirate, which had been driven sharply higher in past years as foreign investors snapped up real estate, have been sliding since the third quarter of 2008.

Read moreDubai: Real Estate Down 50% From Peak

From the Palm Islands to Emirates Bank, grand Dubai, United Arab Emirates, feels the economic crunch


From the Palm Islands to Emirates Bank, grand Dubai, United Arab Emirates, feels the economic crunch

They were heralded as “The 8th Wonder of the World” by numerous travel sites. They required a staggering $60 billion to construct, according to their developers. They attracted A-List celebrities from the Jolie-Pitts to the Beckhams to Lindsay Lohan. They were, in fact, “one of the most enterprising and ambitious ventures to ever have been imagined,” according to travel Web site Destination 360.

“They” are the epic Palm Islands, a series of three man-made islands in the shape of a palm tree, that along with the surrounding city of Dubai, were considered the “it” playground to the stars, a chic status-symbol to the rich, and a mammoth, epic, super-expensive, luxury landmark to the rest of us.

When you”re this high, you”ve got a long way to fall… And fall they have.

Yes, the global recession seems to be official, as the Palm Islands and Dubai have smacked into economic trouble, according to numerous published reports.

“It is clear that tens of thousands have left, real estate prices have crashed and scores of Dubai”s major construction projects have been suspended or cancelled,” the New York Times reports.

And the Palm Islands themselves? Not looking so good. The Mirror reports that the islands” real estate values have plummeted – by about half. Properties that were selling for about $4.5 million are now going for around $2.3 million. Probably not welcome news to celebs like Brad Pitt and Angelina Jolie who own property there, the paper reports.

But it gets worse. Real estate developer, Nakheel, maker of Dubai”s Palm Islands, has suffered recent layoffs, according to ABC News. The Guardian reports that the third of the Palm Islands, the Palm Deira, which was previously under construction, is on hold, and VIrtualTripping.com reports that it is downsizing in scale.

Read moreFrom the Palm Islands to Emirates Bank, grand Dubai, United Arab Emirates, feels the economic crunch

In Dubai, guest workers are stranded without jobs

Dubai got a bailout from Abu Dhabi, or else it would have already collapsed. Now not only Dubai, but the entire region is collapsing.


DUBAI, United Arab Emirates — The world’s economic shadows caught up with Employee No. 861 at the lip of a construction site on Dubai’s desert outskirts.

The foreman tapped on the dump truck’s window and broke the news: The project was slowing and fewer workers were needed. Muhammad Munir Bahadar’s next paycheque would be his last.

Such scenes have been repeated in millions of variations from corner offices to factory lines as the global economic landslide rumbles on.

Don’t miss:
Dubai will soon be looking like a ghost town
Once Booming Dubai Goes Bust

But in places such as Dubai — built on imported labourers who banked on the promise of steady construction jobs — there is a distinct brand of desperation: A rising number of low-wage foreign workers, like Bahadar, have become stranded with neither the chance to leave nor the immediate prospect to resume work.

“We are the ghosts of the financial crisis,” said the 36-year-old Pakistani, fingering the expired work site ID that he keeps in his wallet. “It has killed us, but we still roam the streets.”

Bahadar now gets by with some small savings and what he can borrow from fellow Pakistanis who still have their jobs. Bahadar’s last remittance to his family back home came from his last cheque in December.

Read moreIn Dubai, guest workers are stranded without jobs

Dubai property chief rounds on accusers

The executive at the centre of $100m fraud allegations rocking Dubai’s property sector has hit back with a counterclaim that his accusers have defaulted on more than $18m of debts owed to his company.

Related article: Dubai will soon be looking like a ghost town

Kabir Mulchandani, chairman of Dynasty Zarooni, claimed that a series of cheques written by investors had bounced as the real estate industry’s fortunes plunged late last year.

Read moreDubai property chief rounds on accusers

Dubai will soon be looking like a ghost town

Laid-Off Foreigners Flee as Dubai Spirals Down


A prospective bidder examined a car on Wednesday at a Dubai auction. Debt-ridden foreigners are selling or abandoning cars.
Bryan Denton for The New York Times

DUBAI, United Arab Emirates – Sofia, a 34-year-old Frenchwoman, moved here a year ago to take a job in advertising, so confident about Dubai’s fast-growing economy that she bought an apartment for almost $300,000 with a 15-year mortgage.

A car salesman in Dubai on Wednesday sat without customers. Lack of credit and a glut of cars on the market are cutting sales.


Driven down by debt, Dubai expats give new meaning to long-stay car park (Times):

Police have found more than 3,000 cars outside Dubai’s international airport in recent months. Most of the cars – four-wheel drives, saloons and “a few” Mercedes – had keys left in the ignition.

Some had used-to-the-limit credit cards in the glove box. Others had notes of apology attached to the windscreen.

“Every day we find more and more cars,” said one senior airport security official, who did not want to be named. “Christmas was the worst – we found more than two dozen on a single day.”

When the market collapsed and the emirate’s once-booming economy started to slow down, many expatriates were left owning several homes and unable to pay the mortgages without credit.

“There were a lot of people living the high life, investing in real estate and a lifestyle they couldn’t afford,” one senior banker said.

Under Sharia, which prevails in Dubai, the punishment for defaulting on a debt is severe. Bouncing a check, for example, is punishable with jail. Those who flee the emirate are known as skips.

………….

Heading home

3.62 million expatriates in Dubai

864,000 nationals

8% population decline predicted this year, as expatriates leave

1,500 visas cancelled every day in Dubai

62% of homes occupied by expatriates 60% fall in property values predicted

50% slump in the price of luxury apartments on Palm Jumeirah

25% reduction in luxury spending among UAE expatriates


Now, like many of the foreign workers who make up 90 percent of the population here, she has been laid off and faces the prospect of being forced to leave this Persian Gulf city – or worse.

“I’m really scared of what could happen, because I bought property here,” said Sofia, who asked that her last name be withheld because she is still hunting for a new job. “If I can’t pay it off, I was told I could end up in debtors’ prison.”

With Dubai’s economy in free fall, newspapers have reported that more than 3,000 cars sit abandoned in the parking lot at the Dubai Airport, left by fleeing, debt-ridden foreigners (who could in fact be imprisoned if they failed to pay their bills). Some are said to have maxed-out credit cards inside and notes of apology taped to the windshield.


An abandoned car in a parking garage in Dubai. One report said 3,000 cars were sitting abandoned at the Dubai Airport.

The government says the real number is much lower. But the stories contain at least a grain of truth: jobless people here lose their work visas and then must leave the country within a month. That in turn reduces spending, creates housing vacancies and lowers real estate prices, in a downward spiral that has left parts of Dubai – once hailed as the economic superpower of the Middle East – looking like a ghost town.

No one knows how bad things have become, though it is clear that tens of thousands have left, real estate prices have crashed and scores of Dubai’s major construction projects have been suspended or canceled. But with the government unwilling to provide data, rumors are bound to flourish, damaging confidence and further undermining the economy.

Instead of moving toward greater transparency, the emirates seem to be moving in the other direction. A new draft media law would make it a crime to damage the country’s reputation or economy, punishable by fines of up to 1 million dirhams (about $272,000). Some say it is already having a chilling effect on reporting about the crisis.

Last month, local newspapers reported that Dubai was canceling 1,500 work visas every day, citing unnamed government officials. Asked about the number, Humaid bin Dimas, a spokesman for Dubai’s Labor Ministry, said he would not confirm or deny it and refused to comment further. Some say the true figure is much higher.

“At the moment there is a readiness to believe the worst,” said Simon Williams, HSBC bank’s chief economist in Dubai. “And the limits on data make it difficult to counter the rumors.”

Read moreDubai will soon be looking like a ghost town