Dubai? No, I'd suggest selling ASAP!

Good People,

I wanted to share some comments I recently received from a good friend and business associate, Pia Ault, who currently lives in Dubai. She has been there long enough to see both sides of the equation: Boom & Bust... For a time, the Emirates (read Emirs) made the suggestion that they were immune to a downturn in Oil Commodities pricing, and perhaps an economic downturn in general... Seems the perpetual geyser has been downgraded to "dribble" status...

Pia's comments:

"Data is good but sometimes it's interesting to personally observe what happens around you....

The National - our local newspaper, yesterday on the front page reported that IMF says GDP growth will slow as economic crisis continues, yet on page 3 several sheiks (and thus almost by default ministers) said there "is no crisis in Dubai" - "people are absolutely NOT leaving by the airplane load, leaving cars at the airport (with and without keys) and the govt still issues 1000 visas per day". Hmmnn, must be why I saw a car auction last week for 2000 hi-end cars. "Slightly used 2008 Porsche Cayenne, no keys available, for sale at great discount"!! That also explains the mile long line of Indian men at the check-in counter in terminal 3 the other day....no, there is no crisis here!

Usually we have construction 24/6, Fridays are absolute with no exception holidays, so quiet - but now there are no night shifts, Saturdays too are quiet, the 65% of the world's cranes at full stop. The line of sewage trucks going to the treatment plant, usually 3-4 miles long, have been reduced to 30-40 trucks.... construction projects on hold = less workers. Less workers = less crap. Less crap = less trucks - you get the picture. Traffic has become tolerable, people here say Dubai is now like it was in 2006.
However, there are apparently grumbles among the ranks and local Emiratis. The govt injected a lot of cash into - well, the govt, where else, which consists of just the royals - some 420 sheiks. That has caused a stir among the locals. But "there is no crisis".

Rents have come down 30-40% (of course AFTER we signed and paid a year ahead...) and food prices are expected to decrease by 50%.

Between September and now it's a whole different picture. But there "is no crisis". Several friends who have their own enterprises here, are in liquidity as the govt owes them money for consulting or training etc. The shortlist for companies owed money stands at 492, that's just the shortlist. Apparently nobody inside govt and royal families who own most of Dubai, can agree which [govt owned] company should pay the debts.

Anyway, that's my personal journalistic observation from the sandbox! Funny, 4 weeks ago a new law was passed that "journalists will not be jailed, only fined, if they publish anything negative about UAE and the economy and the Royal family"....no there is no crisis and certainly no censorship here!

Pia"

Thanks for sharing Pia... We share your pain here in the USA...

Best,

Mike