S&P: Dubai Is Nearly Out Of Cash

The Business Insider ^ | 10-11-2009 | Joe Weisenthal

[blam]

S&P: Dubai Is Nearly Out Of Cash

Joe Weisenthal
Oct. 11, 2009, 12:07 PM

Don't assume that the economic comeback means Dubai is out of the woods. Holders of its debt may be in trouble, unless the Emirate can raise more money.

DUBAI, United Arab Emirates (AP) — An analyst at credit rating firm Standard & Poor's says Dubai has "insufficient" funds to pay back billions of dollars worth of debt coming due, putting added pressure on the city-state to raise additional cash.

Farouk Soussa, S&P's head of Middle East government ratings, said Sunday that the sheikdom has about $4 billion left from a February bond issue, but must find a way to cover as much as $50 billion over the next three years.

He says "the notion that the government will be able and/or willing to stand 100 percent by all that debt on an equal basis is wrong."

[snip]

[gimme1ibertee]

Yeah..right....and i’m a size 9.

[Steely Tom]

Could they pump some more oil?

[devane617]

No one is buying their oil. The Houston Ship Anchorage is filled with full tankers waiting for buyers, because we are using so little oil. Someone better bring back the SUV, and quick, or the middle east for be a dust bowl real soon.

[eleni121]

well there’s a bit of good news today...

[KSCITYBOY]

I think they were building huge resort hotels in anticipation of the time they would run out of oil. Very bad timing for them.

[blam]

"Could they pump some more oil?"

Dubai

[snip]

The emirate's main revenues are from tourism, real estate and financial services.[7] Although Dubai's economy was originally built on the back of the oil industry,[8] revenues from petroleum and natural gas currently contribute less than 6% (2006)[9] of the emirate's US$ 37 billion economy (2005).[10] Real estate and construction, on the other hand, contributed 22.6% to the economy in 2005, before the current large-scale construction boom.[11",?I>

[snip]

[jimtorr]

No one is buying their oil.

If Dubai cut the price of their petrol products by 20% i'd bet that lots of people would want their oil.

[combat_boots]

Dubai building boom:

http://money.aol.com/special/amazing-dubai-building-photos

...and bust

http://www.guardian.co.uk/world/2009/feb/13/dubai-boom-halt

[Cicero]

No one is buying their oil.

I put a wood stove in one end of our house some years back, and I put a pellet stove fireplace insert at the other end last year. I stocked up on plenty of wood and pellets last spring. So far we've only been using the furnace to heat our hot water.

I don't know how much money I'll save at current prices, which are much lower than last winter so far. But I'd rather buy and burn American wood than Arab oil, thank you.

[devane617]

I doubt it. We are using oil at a level not seen in 20-30 years. The only reason oil prices are where they are at now is speculation, not supply. It would not surprise me to see oil drop like a rock within a few trading sessions. I do not understand what has held it up as long as it has. Unless we start consuming much more oil, the mid east is in trouble, and probably the entire region. It’s just a matter of time before all those beautiful places built in Dubai before relics in the sand.

[Cicero]

Here’s my favorite building—the Dubai Death Star, designed by Rem Koolhas:

http://www.freerepublic.com/focus/f-news/1987896/posts?page=19#19

[aShepard]

Whereever thearticle refers to the UAE, substitute US, and see whjat kind of reaction that you get.

The US is totally broke, - the only thing that we have over Dubai - are printing presses!

[GOPJ]

These are people who wonder why no one else has indoor snow ski slopes.... Hint - it cost more to run for a week than a years profits....

[stephenjohnbanker]

Dubai caught between a resort, and a construction loan ;-)

[blam]

[thackney]

We are using oil at a level not seen in 20-30 years.

Change that to 10~12 years. The drop is real but not as large as you imply.

In some uses, the drop is very little, larger in other areas.