Anyone seen the Lloyds share price this morning!!!!!!!!!!!!!
Discussion
From reading the Times this morning, yesterday's falls were caused by a few factors:
1) Dubai fueled it's massive growth using debt and the stand still request shows that they can't service it. This alone isn't that big a deal because the debt at risk of default isn't truly massive (it's somewhere around £60bn, IIRC), but...
2) The Dubai debt is in a company owned by the Dubai government and linked to the Royal Family, so if they can't service the debt in that company, it's likely a lot of other debts may go bust. This is compounded by...
3) The markets couldn't ascertain what the banks exposure to Dubai and so panicked, further exacerbated by...
4) The announcement of the standstill was timed to coincide with the markets closing in the US for Thanksgiving and in the Middle East for Eid, adding to the confusion. Then...
5) A telephone conference call with the company and debt holders was cancelled because the network fell over from too many users, hence stirring up fears about a lot more people being involved than it seems at first glance. On top of that...
6) People are worried that Abu Dhabi may not step in with rescue loans to bail out Dubai.
1) Dubai fueled it's massive growth using debt and the stand still request shows that they can't service it. This alone isn't that big a deal because the debt at risk of default isn't truly massive (it's somewhere around £60bn, IIRC), but...
2) The Dubai debt is in a company owned by the Dubai government and linked to the Royal Family, so if they can't service the debt in that company, it's likely a lot of other debts may go bust. This is compounded by...
3) The markets couldn't ascertain what the banks exposure to Dubai and so panicked, further exacerbated by...
4) The announcement of the standstill was timed to coincide with the markets closing in the US for Thanksgiving and in the Middle East for Eid, adding to the confusion. Then...
5) A telephone conference call with the company and debt holders was cancelled because the network fell over from too many users, hence stirring up fears about a lot more people being involved than it seems at first glance. On top of that...
6) People are worried that Abu Dhabi may not step in with rescue loans to bail out Dubai.
Trommel said:
youngsyr said:
People are worried that Abu Dhabi may not step in with rescue loans to bail out Dubai.
They might let them sweat for a bit, but I can't see them standing by and watching them fall.youngsyr said:
Trommel said:
youngsyr said:
People are worried that Abu Dhabi may not step in with rescue loans to bail out Dubai.
They might let them sweat for a bit, but I can't see them standing by and watching them fall.It's sort of like Wales having financial difficulties.
Given that Shariah banking punishes defaulting on sukuk's by jailing people, I wonder what will happen...
Bing o said:
youngsyr said:
Trommel said:
youngsyr said:
People are worried that Abu Dhabi may not step in with rescue loans to bail out Dubai.
They might let them sweat for a bit, but I can't see them standing by and watching them fall.It's sort of like Wales having financial difficulties.
Given that Shariah banking punishes defaulting on sukuk's by jailing people, I wonder what will happen...
youngsyr said:
Perhaps I didn't make my query clear, what's special about the relationship between Dubai and Abu Dhabi, as opposed to the five other emirates, or is it simply that they don't have any oil either?
Gotcha. Well I guess the other Emirates all have sufficient Oil not to have gotten themselves into a debt based boom based on property speculation like Dubai, so don't need bailing out. Will be interesting to see how it all plays out - if Abu Dhabi don't help out Dubai, then it's hard to say where the ball will finish rolling - there's a lot of UK construction money owed, plus lots of overseas banking investment...
Bing o said:
youngsyr said:
Perhaps I didn't make my query clear, what's special about the relationship between Dubai and Abu Dhabi, as opposed to the five other emirates, or is it simply that they don't have any oil either?
Gotcha. Well I guess the other Emirates all have sufficient Oil not to have gotten themselves into a debt based boom based on property speculation like Dubai, so don't need bailing out. Will be interesting to see how it all plays out - if Abu Dhabi don't help out Dubai, then it's hard to say where the ball will finish rolling - there's a lot of UK construction money owed, plus lots of overseas banking investment...
Still can't see abu dhabi not coming to the rescue though.
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