A load of crap from an idle brain

Was it expected?  Well, it depends on the people you are asking.  If you ask the rulers of the kingdom, then everything is and was hunky dory.  If you ask the economists and people tracking the business of Dubai, it was always sitting on a debt bubble, ever willing to burst.

The tallest building, the biggest man made island, the biggest snow world in the midst of a desert, the largest mall in the world, the glitziest and grandest hotels in the world…the list of biggest, largest, tallest was never enough for Dubai to conquer.  And in this context, the tiny city state of Dubai over leveraged itself and built an empire of debt.  A debt that is bigger than its GDP now.

For a country that hardly has any oil, it had to build its future on something else than oil.  So, the charismatic ruler of Dubai, Sheik Mohammed bin Rashid Al-Maktoum decided to move to finance, tourism to hedge its economy.  Good vision no doubt, but its the execution where the fault lay.  Mindless borrowing was fun and fine till the economic collapse happened in the USA.  With the collapse of Lehman, Merrill Lynch and a host of big banks, the easy money dried up.  And it was just a matter of time before which this was to happen.

Just three days before Eid, the Dubai government’s announced a six-month reprieve on debt repayments. This  sent shockwaves through the world markets, as it raised doubts over the Gulf emirate’s ability to meet its financial obligations.

Dubai is being crushed under a mountain of debt. The emirate has a debt in excess of $80 billion which it incurred by expanding in banking, real estate and transportation. Dubai World with $60 billion liabilities has sought a six-month standstill on its debt repayment to all its lenders.

The Dubai government requested the creditors of Dubai World (one of three conglomerates that are backed by the emirate), to agree to a ’standstill’ on repayments until May 30 2010.

On one hand the Finance ministers and bankers are saying that the markets are behaving erratically.  But believe them at their own peril.  These are the same people who just days before the collapse of the American banks proclaimed that all was well.

For most of this decade Dubai has been the Victoria Beckham of the Arab world–the biggest, glitziest, most heedless spender. It’s been the sort of place that invests $7.6 billion subway system few of its 1.6 million people are likely to use, the sort of place that builds artificial islands in the shape of palm trees, the sort of place that builds the world’s tallest skyscraper, the sort of place that sells designer seat-belts to encourage drivers to be safer in the very cars it wants them to trade in for a subway ride, and the sort of place where office buildings have been the Gulf’s most copious crop of the decade.

Dubai hasn’t limited its excesses to its corner of the United Arab Emirates. Through Dubai World, the Emirate’s investment arm, it partnered with MGM Mirage and invested in such projects as Las Vegas’ City Center, a 67-acre development that includes a 4,004-room hotel-casino, 2,400 high-rise residential condos, dining and entertainment venues and its own retail district. At $8.5 billion, it’s the most expensive privately financed construction project in the United States.

Now the bad news.

The Dubai subway has been running since September, albeit to empty quarters. A quarter of Dubai’s office space is vacant. Workers have taken salary cuts of up to 30%. The Emirati government is in debt to the tune of $80 billion to $120 billion. CityCenter? It’s “worth about half of what it cost MGM Mirage and Dubai World to build the massive Strip development,” the Las Vegas Review-Journal reported in October. lost half its value. MGM Mirage took a $1 billion write-down already, Dubai World ate a $348 million loss (so far).

Read rest of the article here

So, does that mean that the Dubai dream is all over?  Not really.  Am sure the more conservative cousin of Dubai, Abu Dhabi will come in with its oil money to rescue it.  But Abu Dhabi has conveyed that the help will on a case to case basis.

That would mean that we would see lesser flamboyance from everyone associated with Dubai, at least for some time now.

More articles on the Dubai mayhem

Recession and debt dissolve Dubai’s mirage in the desert
Dubai’s Debt Troubles: Beginning of the Next Leg Down?
Dubai: an emirate in crisis
Sober ruler of Dubai whose vision is crumbling in the face of the storm

I have always wanted to have a new page for my investments and its tracking.  So, this was long pending wish, fulfilled.  I have added another page to the site called “Investments“.

Have tried to put up a pictorial representation of the logos of all companies invested.  Have a few things in mind which i want to work on.  As of now, its all fuzzy.  As things clear up, you will see more information on companies, investments, economy, movement of stocks and stuff on that page.

Since my biggest hobby Movies , already has its own dedicated page, it was time my second biggest interest, Investments also had its own page.

More as time goes by.

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First a trip to smelly and dirty Chennai, then a trip to equally smelly and extremely dirty pilgrim town called Velankanni (with the famous shrine of Mary) and finally to an extremely clean, cold and windy Hyderabad.

Chennai was sweltering hot, i sweated buckets.  Coupled with that the scarcity of water and a city that is used by its citizens as a garbage dump.  You wonder where the municipal workers of the city are?  If at all they are doing the work.  Whether you are the middle of the city or at the outskirts, one thing that defines Chennai is the consistent crappy smell in the air.  The air stinks in Chennai and uniformly so.  Dont know why and how.  This is in addition to the dirt and filth all around.  Wonder which moron decided to name it a metro.

Velankanni was equally dirty.  For a piligrim town with such a potential for tourism, there are hardly any good lodge/hotels.  The only good ones are the dorms run by the church, but they too offer you rooms for the next day only.  And if you are the ones (like me) who just drop into the town with no reservations, hoping to stay at some hotel, be disappointed with the kinds of rooms you get there.  As for the restaurants, stay away if you dont want to come down with some extreme case of food poisoning or diarrhea.

If you have any plans of going to Velankanni, stay at Nagapattinam, a town near Velankanni.  Take a bus in the morning to Velankanni, see around and come back to Nagapattinam.  This was advised by my friends after i did my trip much to my exasperation.

Took a train from Chennai to Hyderabad.  Was travelling by the Indian Railways after more than 11 years and loved the experience.  Reached Hyderabad early morning around 6am on the 14th (our 1st wedding anniversary).   Was amazed at how clean the city of Hyderabad was at 6 in the morning.   Either the roads were swept clean or at some places the cleaners were hard at work.  Kudos to the Greater Hyderabad Municipal Corporation (GHMC) and the people who work for them for keeping the city reasonably clean.

It was drizzling all through and there was a nice cool breeze.  Loved it. Since we were tired, we preferred to rest.  There was not much celebration for the anniversary as all plans were for wifey’s birthday which was 2 days later on the 16th.  Had a get together at home for friends and family for wifey’s birthday.

Later on in the week, went to the new mall in town, GVK-1.  Good place to hang out, but there was something lacking in the place.  I prefer Hyderabad Central or City Center.  Also the mall is pretty new and the shops are only coming up.  Maybe it will be good once it fills up.

Saw the movie New York.  Not bad i thought.  Better than the crap that Yash Raj is famous for churning out. Saw the movie at the new INOX multiplex at GVK-1.  The seating is good and so is the sound system.

Travelled back to Singapore via Chennai again.  From the superb airport of Hyderabad to a garbage can called Chennai Airport is a perfect example of what the private sector can do to our economy while at the same time, the Chennai airport run by the inefficient babus of Airports Authority of India have really screwed it up.

There were no seats at the international departure.  They simply disappeared.  For someone who’se flight is yet to start check-in, they simply have to stand there waiting for the counters to open.  Can you believe that?  What about the elderly and the people who need to rest?  Have the airport authorities ever thought about their comfort?

And the cafe’s selling stuff in Chennai airport are nothing but daylight robbery.  Tea is sold for Rs 30.  A samosa / aloo bonda costs Rs 60.  Whereas you get a good Cafe Coffee Day coffee at the Hyderabad airport for just Rs 15.

I can go on and on about the pathetic situation at Chennai airport, but its a waste of time.  Its a perfect example of why the airport needs to be handed over to a private player so that they can do a better job of the same.  Anyone with doubts can look at Hyderabad, Bangalore, Delhi and Bombay airports and compare them to the ones run by AAI.  There is simply no comparison.

Back at office and a mountain of work stares me in the face.  Time to get going.

Chennai picture courtesy: I’m seeing green ;  Hyderabad tank bund and NTR gardens picture courtesy: Hyderabad

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Shouldn’t these have been done earlier considering the fact that much of the products that originate from China are not only spurious, of inferior quality,  harmful to humans and the security of the nation (especially the cellphones with no IMEI numbers).

The government on Wednesday put quality restrictions on mobile phones, dairy products and toys in a measure aimed mainly to block their imports from China and which may trigger another round of wrangling at the WTO between two of Asia’s biggest economies.

The Directorate-General of Foreign Trade said mobile handsets without the IMEI (International Mobile Equipment Identity) number, which helps authorities to track the sale and use of the phones, cannot be imported from now on. An estimated eight lakh such phones come into the country every month from China. These are unbranded and cost a lot less than the branded variety.

Security agencies had raised concern over the use of these phones, many of which, they said, were being used by terrorists to set off bombs and communicate among themselves. Since these sets do not have the 15-digit IMEI number, or cloned numbers, the authorities find it difficult to track the sale or usage. Approximately 30 million such phones are in use at present.

The DGFT also banned till January 2010 the import of toys that do not meet international safety standards and norms. This move too will hit imports of toys mainly from China and several other countries. India had blocked import of toys from China in January on health grounds, after concerns over their safety were raised in developed markets. But the restriction was eased later after Beijing questioned the restrictions on the ground that New Delhi did not put such curbs on toys from other countries.

More than a dozen countries in Asia and Africa had also banned milk and dairy product imports from China, while several others had recalled the products suspected to be contaminated. India, world’s largest milk producer, does not import milk products from China. The ban is being seen as a preventive measure.

Meanwhile, the government has asked its missions in the African region to step up vigil against bootlegged drugs being sent to those markets with fake `Made in India’ tag. The commerce department last week lodged a complaint with the Chinese embassy here and the Indian embassy in Beijing and sought action against the impostors.

The Indian action comes after Nigeria’s pharma regulator reported the detention of a large consignment of fake drugs for treating malaria. The consignment carried `Made in India’ labels but was produced in China. A laboratory test of a recent consignment of anti-malaria drugs Maloxine and Amalar tablets proved these were fake. Had the drugs flowed into the market, about 642,000 lives would have been affected.

/Newslink/

Hope the ban stays long enough.

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With  the help of the great guys at Just host, i managed to migrate over all the data from my wordpress blog to this new domain. There are a few duplicates here and there and also the blogroll hasnt been updated.  Am in the process of fixing up all the small niggles.

Your advise, words of encouragement, criticism is very much appreciated as i start off this new journey.  Plan to write more on my investments, politics, economy, integrate all my pictures and much much more.  More importantly, i plan to segregate all of them well so that someone looking for information on this blog doesnt need to crack his head.

Thanks for dropping by. Much appreciated.

Above picture source: Biblesociety

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