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ISSUES....
Inside, confidential and off the record
Must bow
The world continues to focus its attention upon the circumstances in The Persian Gulf and has said, collectively, “So What?” The collective
assumption is that Abu Dhabi shall have no choice but to come to
the aid of its fellow Emirate; that Dubai has a reason to exist as the Gulf’s playground, shopping mall and financial hub, and that an aid package of some sort shall be pieced together sooner rather than later, after much inter-Emirate debate and concession granting, and that all shall be right with the world forthwith.We tend to disagree that all shall be right with the world, for we think much damage has been done to the psychology of the global capital market, but we also agree with the notion that even if Dubai were to wholly collapse and all of its debts were to be rendered worthless this many tens of billions of dollars is really not much more than mote in the eye of the global economy. Abu Dhabi, and to a lesser extent, Sharjah, Ajman, Umm al-Quwain, Ras al- Khaimah and Fujairah… the other members of the UAE (once known as the Trucial States for those with a sense of history)… will pay Dubai’s debts. They’ve really no choice. But they will do so when their flashy, glitzy, super-modern, a-bit-too-westernized “sister” state has been properly humiliated publically, has apologized for its modernity, has swallowed its pride and has properly asked for help.
The problem is calendrical. That is, the Muslim holy days of Eid al-Addha do not end until tomorrow and then begins two days of national holidays in the
Emirates themselves. It may, therefore, be late this week before any real progress is made and that progress is announced on the other Emirates bailing
out their “sister” state. But bail they will. Again, they’ve really no choice. The market is coming to terms with that understanding.
- Dennis Gartman/ The Gartman Letter 11/ 30 / 09
- For more on interesting comments, you can subscribe to The Gartman Letter by contacting Dennis Garthman: Phone - Fax: or email : dennis@thegartmanletter
ISSUES.... 12/01/09
ISSUES.... Inside, confidential and off the record
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