No, of course not. That would require effort and intelligence. You might get one, but never both.

Very strong Ticker. Indeed we fixed nothing.

No crisis was apparent among the hoi polli this morning at 6 AM. The roads in my small town were surprisingly busy given the recent bad news. Shoppers were out in force. I saw them buying big screen TVs packed in garish, full-color cartons that alone probably cost the manufacturer $10.

Does anything matter anymore? As long as the Visa card registers available credit, who gives a flip about Dubai, the Yen, or lies from Geithner?

Come on KD, Loosen Up. Have a Drink of Koolaid. There's a Bowl of Skittles Over there too.

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Come on KD, Loosen Up. Have a Drink of Koolaid. There's a Bowl of Skittles Over there too.

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Come on KD, Loosen Up. Have a Drink of Koolaid. There's a Bowl of Skittles Over there too.

That bowl is full of turds - you can't fool me.

My takeaway exactly Karl.
In addition, the banks who are out the money have no ****ing clue where Dubai even is. They bought the packaged loans without any real due diligence, of course "insured" (we'll see how THAT plays out in UAE court!). They broke the cardinal rule of banking: know your customer.

Same ****, once again.

Yep.

"Oh that's a government - it's safe."

Uh huh. Look at Greece and Hungary, for openers. There's more than one turd in this bowl and Dubai is a bit player in terms of the total pain that is lurking out there undiscovered thus far.

"Countries don't go out of business....The infrastructure doesn't go away, the productivity of the people doesn't go away, the natural resources don’t go away. And so their assets always exceed their liabilities, which is the technical reason for bankruptcy. And that's very different from a company."

Walter Wriston
Citicorp Chairman

Snowman,

But will the people want to pay up?
Governments fail and default quite often, and the only way to make them pay is war.

Skittle coated turds. Like peanut M&M's, but different.

Dubai is no regular country. Their main asset is silicon dioxide....Sand.
Take out the expats and you are left with some bedouins, a small gaggle of ultra-rich sheikhs (well...maybe not so rich any more), and bridges to nowhere. There are no "people" to pay up. And the place isn't worth fighting over.

Great analysis. I have stolen your lines

"The point to carefully consider is not whether The Fed has played "shower the world by exchanging dollars for worthless crap", it is whether or not any of the underlying problems that led to the crisis, most specifically excessive levels of debt and leverage, have actually been addressed rather than being hidden and papered over."

for my signature, I hope that's ok.

The fat lady isn't on until the last act.

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have no ****ing clue where Dubai even is. They bought the packaged loans without any real due diligence, of course "insured"

They will find out soon. Who bails them out? What about other countries on the brink of defaulting?

- Thanks, already answered...

The spinmasters are out early.

Bove sees Dubai's debt woes benefiting the U.S.

http://www.finanznachrichten.de/nachrich....

Great ticker once again,.

I agree Karl, I think we got a little taste of what it will be like when the dollar carry trade reverses.

Just a 1.2 spike in Dollar index dropped S&P futures 40+ pts and GOLD over $60.

I can imagine what happens if we get a 15 pt rally within a few weeks...or some of those +2 or 3 pt days like last year.


Oh my.

The SnP seems to be drawing Mount Fuji.

Edit: ofc not, it's the MacD M. If you want your brand drawn on the SnP contact a Lord Blankfein's underling in the magic drawing department.

I could not wait to read your thoughts on this and you're 100% right about gold, KD. Goldbugs have pretty much infested Zerohedge with their mindless prattle for weeks now, even saying bizarre things about your mattress over there. (yeah don't ask--total waste of your time with angry people you kicked off the forum) Today at ZH? Crickets...

Should be a fun week and I am glad your detractors were silenced for now.

Clear, concise, and consistent. Yup. You'll be excoriated for this one, too. Getting to be a badge of honor, I'd say.

But it's gonna be tough being right on this one, methinks. Bad juju coming...

The London Financial Times Alphaville Blog has a report on http://ftalphaville.ft.com/blog/2009/11/.....

The US has $10 billion exposure. The UK? $50 bn. If the Emirates dominoes start to fall, this could be messy.

Edited from before, reducing exposures by 6.5 and 30 billion respectively. Apologies foor my slip. I know that a billion here and there and soon we're talking real money.

A British friend of mine knows many people who live in Dubai - that is they used to live there. People have been running away for quite a while (most of Dubai's population is/was mostly expatriots (80+%) and they are leaving in droves). The government made it illegal to leave the country if you had debts - except that if people gave the right officials a brown envelope "present" they would let the people leave the country labeled as going on "vacation" except that these people never will return. The airport is filled with (unpaid for) cars as people just leave them when they leave the country. Dubai has debtor prison - these expats don't want to go to jail.

http://www.nytimes.com/2009/02/12/world/....

Oil revenue isn't going to save Dubai either:

Although Dubai's economy has been built on the back of the oil industry, revenues from oil and natural gas currently account for less than 6% of the emirate's revenues. It is estimated that Dubai produces 240,000 barrels of oil a day and substantial quantities of gas from offshore fields. The emirate's share in UAE's gas revenues is about 2%. But Dubai's oil reserves have diminished significantly and are expected to be exhausted in around 20 years. Real estate and construction account for about 23% of GDP and financial services for another 11%. Assuming many of the builders will now leave, it is hard to see what the future actually holds. Like countries a lot nearer to home - Spain, Ireland, the Baltics - it is hard to know what exactly to do with an economy which has been totally distorted by construction activity, and unsustainable building and price rises. And of course Dubai's problems are a lot larger than anything which is to be found in Europe.

http://globaleconomydoesmatter.blogspot.....

Dubai, Greece, Hungary, the Baltic states, Iceland, Ireland, Italy, Spain (20% unemployment), Japan, . . . the Central Banks are running out of fingers to put into the leaking dikes. Interesting times.

I don't have any wisdom to add. I'll just say this. I personally always thought of Dubai as the canary in the coal mine. Even several years ago I thougt no way this makes it. Not sure why you would be excoriated for this ticker. Even if economic data is good (which really it's not) you MUST view all data against the back drop of the unprecedented debt binge. I just saw the preview of the OZ video (ordered it though from still's site) but was agast when he talked about the derivative situation FAR exceeding the WORTH of the planet! Good Grief...how can that not be deflationary? As a gold bug and peak oiler I will tell you I am long "O" gold/oil stocks. I think McHughes C wave down is going to take even the "permabears" breath away. In short, "IT IS TIME TO GET THE HELL OUT OF THE COAL MINE!"

The derivative problem is one that is impossible to truly quantify, since we can't get an accurate read on actual NET exposure (and that's on purpose that the "playas" intend.)

"We have fixed exactly nothing in the world of finance over the last two years. We have in fact squandered the opportunity to put in place global economic and financial system reforms...."



Exactly what I've been saying since the TPTB have squandered untold amts of $$$ on fairly useless programs.

$$$ that could have been conserved and used for meaningful purposes, non of which are more important than bolstering the USA's ability to create MEANINGFUL jobs in manufacturing, agriculture, mining, education and the areas that make a nation great and to resore our competivity with the rest of the world, without which, our country is ultimately lost to the 'barbarians'.

Instead it was given to be hoarded by countless well-connected 'friends' of our government.

Lest anyone think I'm placing the blame on the connected banksters and criminal politicos, I'm not.

They aren't doing anything other than a reasonable person would expect.

All you have to do is put yourself and the criminals in the roles of the characters in the frog and scorpian fable.

They are doing what they do, and why we are too naive' to expect them to do otherwise, is beyond me, except that we don't like to accept responsibility for our failure to provide effective oversight of them.

The US has arguably spent vast amts keeping the bulk of the rest of the world safe, and once we loose the resources to continue that role, we and our families will be eaten alive.

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The US has $16.5 billion exposure. The UK? $82 bn. If the Emirates dominoes start to fall, this could be messy.

$82 billion? Really??
That sounds like a knock-out blow.