Tuesday, December 01, 2009
Why is anyone surprised about the news on Dubai?
For many years now, many conversations about the transformation of Dubai would usually end with someone sighing "Don't know when it'll all come crashing down." Even the layperson on the street, who'd never heard of terms such as 'Economic Bubbles' knew that Dubai was one. So why is anyone surprised about the news on debt defaults?
The only unknown was the timing. That holds true for all market corrections. Otherwise there were signs, for all to see, since 2008. Besides the low occupancy rates and rentals falling, the decision by Dubai Metro to not extend up to Jebel Ali as originally planned was ominous.
However there's no reason to believe all is lost in Dubai, a la Lehman A lot of investment has been in infrastructure - the metro, wider roads, lots of housing.. So it's well poised for the next round of boom, whenever that happens.
Though right now, there seems to be a lot of schadenfreude around.