Posted in: The Current Account
Posted by: Wayne Arnold on August 31, 2009 4:41 PM
Tags:
banks, central bank, central banks, consolidation, consumers, credit, debt, debt restructuring, dollar, Dubai, emerging markets, employment, exports, Fed, housing, NPLs, TARP, Treasuries, UAE, US
Fixed firmly in the summer doldrums, markets are likely to languish
this week. The ailing dollar may find some support from emerging-market
central banks, which are r ecycling recovering export revenues back into US Treasuries.
The dollar may also be getting support from the growing realisation
that the Fed's dollar printing is being matched if not exceeded by US
household de-leveraging, which is sucking money back out of the
economy.
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Posted in: The Current Account
Posted by: Wayne Arnold on August 25, 2009 9:14 AM
Tags:
Asia, Australia, banks, Barack Obama, Ben Bernanke, China, commodities, consumers, currencies, depression, dollar, employment, exports, Fed, fiscal policy, GCC, housing, inflation, Malaysia, monetary policy, oil, Philippines, property, risk, Swiss franc, Thailand, US
Phew! Looks like Ben Bernanke has managed to hold on to his job.
There are enough mixed signals pointing to recovery in the US for Obama
to conclude that helicopter Ben didn't completely screw things up.
Serious economists also give him high marks for realising early on that
it was going to take extraordinary measures to pull the economy out of
its nose-dive.
It's a good thing, because the job market for economists, and for many other professions, is still tough out there.
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Posted in: The Current Account
Posted by: Wayne Arnold on August 24, 2009 5:47 PM
Tags:
Afghanistan, Andy Xie, Asia, Ben Bernanke, China, consumers, depression, dollar, emerging markets, employment, EU, Europe, exports, Fed, fiscal policy, housing, Jon Stewart, markets, Mary Nicola, monetary policy, Nouriel Roubini, recession, SMEs, Standard Chartered, stocks, subprime, Taliban, Thailand, Treasury, US
U, V, or W? That's the crux of the debate going on this week in economic circles and in Jackson Hole. Will the global economy bounce back quickly, and as the markets seem to suggest, are we already in a sharp recovery? Or will it be a boring U-shaped affair, as is more apparent if one looks at the latest data on employment, consumer spending and exports, with a slow and nearly imperceptible slog upward? Or, is it going to be the even bleaker option: a W-shaped, double-dip recession -- a la 1937 -- in which policymakers cheer recovery too soon, take their feet off the fiscal accelerator and watch the real economy sink right back down into the muck?
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Posted in: The Current Account
Posted by: Wayne Arnold on August 24, 2009 2:34 PM
Tags:
bonds, central bank, debt, debt restructuring, department of finance, DEWA, Dubai, EFG-Hermes, Emaar, Financial Support Fund, Mohamed Alabbar, Moody's, Nakheel, Nasser Al Shaikh
Readers of the print edition may have noted with interest the news that EFG-Hermes now calculates the overall debts of Dubai Inc. at $84.7 billion, and perhaps "even higher when including bilateral loans and unpublished debt by other government-owned companies." The article says EFG recalculated its tally for Dubai debt to include newly disclosed debts at Nakheel and Dubai Electricity and Water Authority (DEWA). You can read a copy of the actual report here. But even without those debts Dubai Inc.'s debt could be estimated to have risen to roughly $85 billion, analysts say.
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Posted in: The Current Account
Posted by: Wayne Arnold on August 20, 2009 2:39 PM
Tags:
Abu Dhabi, bailout, bonds, central bank, debt restructuring, Dubai, Nakheel, oil, risk, SWFs, Taqa
My column today discusses Dubai's unfolding debt restructuring, including how it might have reduced the cost of bailing out Nakheel if it had used part of its bond sales to the Central Bank to buy back Nakheel's bonds. Bond buybacks may be somewhat novel in the UAE, but they aren't unheard of: the Abu Dhabi National Energy (Taqa), which is among the most heavily indebted companies in the UAE, bought back $465 million of its own bonds early this year when the financial crisis had laid them low. Last month, Taqa said it was back out trying to borrow $1bn to pay off existing debts and fund its buying spree of overseas oil assets. Analysts still can't figure out why the UAE wants to use sovereign funds to diversify its geographic exposure to oil, when it already has a natural exposure to oil of its own.
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Posted in: The Current Account
Posted by: Wayne Arnold on August 18, 2009 9:45 AM
Tags:
banks, Borse Dubai, central bank, consumers, credit, debt, dollar, Dubai, emerging markets, executive compensation, Fed, Financial Support Fund, fiscal policy, GCC, inflation, Jones Lang LaSalle, law, liquidity, loans, Nakheel, Nouriel Roubini, peg, property, recession, regulation, risk, SEC, SMEs, Supreme Court, TALF, Treasury, UAE, US
More and more bears are coming back out of the woodwork to question whether the right half of the V-shaped recovery might be somewhat flaccid. Permabear Nouriel Roubini offers a lucid case for a W-shaped recession this week. With the US consumer still in hibernation,
the only thing supporting recovery is the US government, by creating
more dollars for it to borrow and go deeper into debt. The latest
illustration (other than weak consumer confidence data) is the decision by the Fed and Treasury to extend TALF, a progamme under which they essentially lend money to banks to make consumer and small-business loans.
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Posted in: The Current Account
Posted by: Wayne Arnold on August 17, 2009 10:06 AM
Tags:
Algosaibi, Andy Xie, Asia, Bank of England, banks, British Virgin Islands, carry trade, consumers, currencies, debt restructuring, dollar, Dubai, Dubai Holding, emerging markets, employment, Europe, exports, Fed, fiscal policy, GCC, health, inflation, insurance, Islamic banking, Japan, John Maynard Keynes, Joseph Schumpeter, Lichtenstein, loans, Luxembourg, money laundering, NPLs, oil, property, quantitative easing, recession, renewable energy, risk, Saad, saudi arabia, Switzerland, tax havens, terrorism, toxic assets, UAE, US
There is a
growing chorus of celebration that we have entered a V-shaped global recovery, particularly in Asia. Even Japan has exited recession. But watch out.
Much of the so-called recovery in Europe, the US
and Asia is the result of unprecedented
government stimulus. While there are flickers of recovery in consumer spending,
exports and inventories, we have yet to successfully transition the global
economy from government life-support systems to its own natural heartbeat. The US may recession may be over, for example, but growth remains anemic, as industrial production and confidence indicate. In fact, the US remains so sclerotic, the American consumer still so dazed and confused, that the US now appears a greater risk to the global economy than the sluggish Eurozone.
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Posted in: The Current Account
Posted by: Wayne Arnold on August 12, 2009 3:23 PM
Tags:
Abu Dhabi, bonds, credit ratings, debt restructuring, Dubai, Dubai World, employment, Fannie Mae, Freddie Mac, GCC, housing, ijara, Iraq, Islamic banking, law, liquidity, mortgage, Nakheel, oil, privatisation, property, risk, sukuk, UAE, US, Zimbabwe
There's a growing level of concern in local financial circles about how Dubai will handle the December maturity of Nakheel's $3.5 billion Islamic bond, or sukuk. Many say it has no choice but to pay off Nakheel's bondholders, who bought the bonds on the understanding that government-owned Nakheel enjoyed the backing of the government.
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