Ovi -
we cover every issue
Poverty - Homeless  
Ovi Bookshop - Free Ebook
Join Ovi in Facebook
Ovi Language
Michael R. Czinkota: As I See It...
The Breast Cancer Site
Tony Zuvela - Cartoons, Illustrations
International Red Cross and Red Crescent Movement
BBC News :   - 
iBite :   - 
A balloon that couldn't lift
by Thanos Kalamidas
2009-11-30 08:39:04
Print - Comment - Send to a Friend - More from this Author
DeliciousRedditFacebookDigg! StumbleUpon

I have said it before that I don’t understand much about economics and that I have never felt the investment fever even though I saw it touching nearly all my friends back in 80s giving to some of them a lot of money but making most of them cry after losing life savings. But one thing I do understand is that when you invest to something you do it with calculated risk hoping to make a better profit from the interest banks and saving programs might give you. Another thing I have learned is that fashion comes and goes.

So why investing into something that combines high risk and temporary fashion, because that’s exactly what happened with Dubai the last two decades. Actually what they did was to create a supersize balloon full of hot air, actually a balloon that full with hot air that they couldn’t lift. You know what’s the worst, after all the things happening the last couple of years regarding the international economic crisis and the infamous recession the whole thing with Dubai looks more like soup opera style drama than a real economic crisis despite the fact that the announcements from Dubai made the stock markets international lose points and whatever else is stock markets lose.

The last days all the financial news are living the drama of David Beckham and Naomi Campbell who are going to see the fancy apartments they got in the pine shape island devalue but the drama is not there. The drama is with the people that expect to get a mortgage from a bank so they can buy a small house to settle their family in something they can call their own and now they find it more difficult because their bank lend millions – apparently with less interest than they would charge for a mortgage – to somebody to build castles in sand! Amazing, the globalization of misery and failure and makes me wonder what the European Union is doing to protect its citizens and please don’t start all the talk about free market because this is another economic drama that will touch all of us again!

The amazing thing with this new balloon that has hit the international market is a state one, the government of Dubai owns the company that is building all those fancy islands and …ski resorts in the middle of the desert and the Dubai government depends from the Saudi princesses and their oil. Actually the whole drama looks at least to me how fragile is the myth of the Saudi’s riches and how stupid banks have been proved once more with investing to that myth.

But back to my naïve and perhaps simplistic thinking, if these extremely rich Saudis and their reputation was enough to let all the banks lend them these billions so why did they give the money themselves in the first place. Why did they need to borrow all these money? Or the illusion of profit, the promise of amazing profit lured the banks into this mistake with its dramatic results? This reminds me an old Greek saying, when you are going for too much in the end you are losing the little you have.

And the same time how arrogant from the Saudis just announcing to the banks that they have to hold payments for the next six months, not negotiating just announcing it. Does anybody think that I can do the same with my mortgage and my bank? Most likely I will be homeless in a couple of months if I dare not pay on time my monthly payments.

Another thing I find amazing was reading in the news once more that all the analysts were expecting this to happen. Really? And who did they tell it? I mean become a prophet after the event doesn’t make them much of prophets, does it? Even I, with my limited knowledge over economics and my the transparency that rules Saudi Arabia and the Emirates in golf after reading the latest reports I could say that yes it was natural that all these constructions concepts and fever in Dubai was natural to fail in some point, since it was all depending on fashion and how many David Beckhams and Naomi Campbells they would attract. Dubai was and is made from the Saudis because they needed another income except oil and for the last decade Dubai works creating a new touristic paradise but obviously and literally built on sand and now blown in the wind.

I suppose the next natural question is if the bankers will continue taking their bonuses or if they’re going to ask more help from the states and in extent taxpayers money to save their ass from another screw up and for the good of the people who need …healthy banks!!!


Print - Comment - Send to a Friend - More from this Author

Get it off your chest
 (comments policy)

© Copyright CHAMELEON PROJECT Tmi 2005-2008  -  Sitemap  -  Add to favourites  -  Link to Ovi
Privacy Policy  -  Contact  -  RSS Feeds  -  Search  -  Submissions  -  Subscribe  -  About Ovi