Chapter 5 Chapter 04 The Alternative Bubble War: The Truth About the Dubai Crisis
We really don't understand the Dubai crisis.
What's the real reason behind Dubai's model bust?
Chinese businessmen lost to Dubai, who will be the next Dubai?
Most of our Asian countries/regions have been attacked by the bubble war of Western countries led by the United States.But it's not just us who are affected by this kind of uselessness, but also Dubai.In fact, Europe and the United States have a different way of thinking about attacking Dubai than they do when attacking other Asian countries/regions.Now that we have finished talking about other countries/regions, let’s talk about Dubai to see how we fellow sufferers in the Middle East share the same disease. We can also learn a lot about another type of bubble war through the Dubai case.
At the end of 2009, the eyes of the world are on Dubai, United Arab Emirates.The debt crisis in Dubai looks very serious, and the international market panicked for a while.In fact, the international market has overreacted to this matter.Before, we always thought that the world economy was developing steadily. Suddenly, there was a financial crisis, and now there is a Dubai crisis. Everyone was terrified and extremely nervous.In fact, the real concern is not the Dubai crisis, but what the next crisis will be.
The whole world is slowly waking up from the nightmare of the financial crisis, but a piece of news from the Persian Gulf once again made the world tremble.Dubai World, which was once extremely rich and claimed to be a company "the sun never sets", has recently defaulted on a large-scale debt and will postpone the repayment of nearly US$60 billion in debt. As soon as the "Dubai Crisis" was exposed, it was like a thunderbolt resounding over the international financial market, causing global stock markets to plummet within 24 hours.According to media analysis, once Dubai World is unable to repay its debts, it will become the world's largest sovereign fund default event since Argentina's default in 2001.And this debt crisis is likely to have an impact on the fragile global recovery and set off a new round of financial turmoil.
The media has an over-interpretation, combining this matter with Argentina's sovereign default in 2001, including Russia's national debt default in 1999.Often the reason for over-interpretation is a basic ignorance.I recently read a lot of media reports, basically nonsense, I didn’t understand it, and then compared the east and the west, looked for some news hotspots, and even said, ouch, it’s over, the financial crisis is about to break out again, what else? The so-called second wave of the financial tsunami. The amount of debt restructuring in Dubai has gradually shrunk. Before we heard that the debt amount was 59 billion US dollars, but later it was only 26 billion US dollars, so there is no need for reorganization. The real problem is 3.5 billion US dollars, which is the extension That $3.5 billion repaid in 6 months. What is $3.5 billion?If you think about it, if only 3.5 billion U.S. dollars has to be repaid for 6 months, this is a very small amount of debt. Why is there such a commotion over these 3.5 billion U.S. dollars?This in itself is unreasonable. You look at the global stock market, it's freaking out. "Black Thursday" and "Black Friday" fell sharply for two days.The U.S. stock market was closed for Thanksgiving, and after returning from the holiday, it also found that it also fell.Even the Chinese stock market fell, falling below 3100 points.One reason people are panicking is fear of contagion effects, especially for sovereign funds.Dubai is like this, if you don’t pay back the money, will other sovereign funds do the same in the future?Everyone is worried that this matter will spread to emerging economies.Once the capital chain is broken, it will be troublesome. Some people compare Dubai World with Lehman Brothers, which collapsed due to the financial tsunami.But in fact, if you study the data carefully, you will find that the resources and funds held by Lehman Brothers are much larger than those of Dubai World.The subprime mortgage back then was a very long debt chain, but the debt chain in Dubai was actually very short. It was a payment crisis. It cannot be compared with Lehman Brothers, and it is not a heavyweight.The subprime debt is a "melamine" problem. The entire subprime debt has not been paid, and then the entire US financial system is full of "melamine" poison. This is terrible.As for Dubai, you just pay it back, it’s nothing special.As long as it is paid back, the crisis will be resolved.If readers are interested in the financial tsunami, please refer to my book and . Let me explain Dubai first.A lot of people haven't figured it out yet.Dubai is one of the seven emirates of the United Arab Emirates.In 1971, these seven emirates (including Abu Dhabi, Dubai, Sharjah, Ajman, Fujairah, Umm Al Quwain, and Ras Al Khaimah joined in 1972) suddenly said that our brothers Well, let's organize a country, what is the United Arab Emirates.Dubai is the second largest, followed by Abu Dhabi.So everyone should know that Dubai is just a province of the United Arab Emirates, and the largest province is called Abu Dhabi.Well, because it is the largest, it will be the first in command, and the second in command will be Dubai, and the other five emirates are very small.As for the seven buddies, Dubai is uniquely endowed with a little bit of oil in the past and a good entrepot port, so it used to be very beautiful.However, recently it was suddenly discovered that the boss is still the boss, and oil was discovered in Abu Dhabi, and it is a super large oil field, so the edge of the second brother was covered. Look back at the company Dubai World, the center of the storm that can't afford the money.Taking the data in 2008 as an example, the total revenue was only 3 billion US dollars, and the net profit was only 200 million US dollars, which was not enough to repay the interest.But this enterprise is a state-owned enterprise.Therefore, many people think that if the assets of state-owned enterprises have problems, the government will support them.But this time it's okay, Dubai said I didn't support it.Dubai does not support it, but Abu Dhabi (Abu Dhabi is the capital of the United Arab Emirates, representing the country) will support it.Because Dubai is just a province, how can the province make decisions for the country?So the country has to support it, and Abu Dhabi will pay for it. We said before that Dubai World is an "enterprise on which the sun never sets", with assets spread across more than 100 countries and cities around the world. It is crazy to buy ports everywhere, just like Japan back then.Especially in investment finance, it has acquired the financial assets of many companies, as well as the equity of many banks, and it has bought them all.MGM, it also has shares, more than 50% of the shares.So in fact, the purpose of Dubai is not to do industry, it is to do financial services. In the 1950s, oil fields were discovered in Dubai, because the resources in Dubai were actually not as many as imagined, and it was said that they would be fully mined in 2010, and then they consciously transformed into other industries.But we see that any financial center in history—Amsterdam, Frankfurt, London—is supported by the real economy, and they all gradually extend from the manufacturing industry to the financial system.But Dubai does not have the support of the real economy, so something really happened this time. What's interesting is that after "9.11", there was a big threshold for traveling to the United States at that time, so what should I do?Dubai just happens to be in the middle, and it has become a leisure area for many Middle Easterners to travel.So it took this opportunity to vigorously develop real estate construction and tourist attraction construction.Dubai is the first in the entire Arab world to allow foreigners to invest in real estate, and its investment environment is very relaxed.Foreigners' investment is not limited to real estate, but can invest in any industry, free of tax, and 100% can be remitted back to their home country, which is very, very loose. The sheikh of Dubai is called Sheikh Mohammed Al Maktoum, and he wrote a book called "My Vision" to promote his Dubai model.He said that Dubai pursues innovation and wants to become the world's economic center, and suggested that other Arab countries should learn from the Dubai model.You see, this saying is so familiar, we often say it ourselves.Now the media has given a definition to the Dubai model, which is called large-scale borrowing, large-scale construction, and economic development.This is the standard sense of the Dubai model.Do you think it borrowed all this money for?The so-called most luxurious seven-star hotel in the world, the Burj Al Arab, used 26 tons of gold.Muhammad, who created the desert myth, has a famous saying. He said that the antelope must run faster than the lion, otherwise it will be eaten, and the lion must run faster than the antelope, otherwise it will starve to death.So he said, whether it is an antelope or a lion, it must run faster than others.So you can see that Dubai has been running very fast, building a lot of construction projects, demanding the fastest development speed, building the world's tallest building, and the largest indoor artificial ski resort, which is extremely luxurious, and it is a place where rich people in the Middle East spend extravagantly. In fact, I want to go to Dubai to play, but I can't afford it.You can see that when the Atlantis Hotel opened in 2009, many stars were invited. At that time, the fireworks were worth 10 million US dollars, which was several times higher than that of the Beijing Olympics. It was really luxurious.I have a question, the Arab countries are quite pragmatic, why is there so many "achievement projects" in Dubai?Same as our China. It is interesting to tell you that there is an essential reason for all this.When did it all start? year 2006.So what year is 2006?That's what the UAE's second in command took over that year.Who is he?He is the Sheikh of Dubai - Muhammad.He is the second in command, and that in command is the chief of Abu Dhabi named Khalifa.The number one man succeeded to the throne in 2004, and in 2005 he raised the salary of civil servants by 100%. After that, everyone was very happy, very happy, and supported him.Then in 2006, the second-in-command came to power, so what?There are three fires for new officials to take office, and if they perform well, they will start construction projects, build highways, and build buildings, which are what we usually call performance projects. This kind of ghost thing that wastes people and money is not only done by us, but also by Dubai. It's really interesting.All the major constructions in Dubai were basically carried out after this buddy came to power, and probably promoted construction projects with a scale of 300 billion U.S. dollars. But the two brothers didn't get along very well.In the end, if you think about it, if the boss hadn't reported the second child, the Dubai incident might not have come out.Why? $3.5 billion is not a problem, you just need to borrow it.As long as you borrow another 3.5 billion US dollars, you can last another half a year.The problem is that once it is exposed to you, no one will lend you money. This is the biggest problem.Well, you wouldn't have a problem in the first place, so I'll expose it to you. Don't you have a problem?It is very likely that they have some conflicts in order to chase the same girlfriend. Of course, I don't know the details, but the boss played with the second child, it is true.After this incident was exposed, Abu Dhabi once stated that it would not take all of Dubai’s debts in one package, saying that it would analyze and analyze them one by one, and then selectively provide assistance, just to see how your little brother is doing. Then we saw that banks in Europe and the United States borrowed heavily from Dubai.Haven't European and American banks always been shrewd?As cunning as a fox.Why should they invest in Dubai World?As I said earlier, the annual revenue of this Dubai World is only US$3 billion, and the net profit is only US$200 million. If you borrow US$59 billion from it, as long as the interest increases by 0.3 percentage points, it will not be able to pay it back, right?Then how dare you borrow it?Since it dares to borrow, it must ensure that it can get it back after something goes wrong, otherwise it will not borrow it.But Dubai has nothing, why should it take it back?Here is the problem, it is just a province, its big brother is Abu Dhabi, it has to bear the burden.So how did it end up?It is best that you borrow a little more, because 59 billion US dollars is not enough, it is best to borrow 200 billion US dollars and forget it.In the end they sign a contract, I will lend you the money, no problem, if you can't pay it back, you use the oil field as a mortgage, isn't that great?Isn't that cheap access to oil fields?It must be done like this.So the ulterior motive is not in Dubai, but in Abu Dhabi. So this is actually a conspiracy.European and American banks wantonly lend to Dubai with two goals, one is Abu Dhabi's super oil field, and the other is Islamic bonds. About 9 billion of the 59 billion US dollars are Islamic bonds, and 6 billion of the 26 billion US dollars of debt restructuring are Islamic bonds.What does this mean?It means that European and American banks can snipe Islamic bonds through Dubai, thus spreading to the entire Islamic financial system. So it kills two birds with one stone.Something is wrong with you, right?The creditworthiness of bonds has been damaged.Also, mortgage your oil fields if you can't pay them back.If oil fields are mortgaged, well, Wall Street lowers the price of oil, and then lowers it back to $30 a barrel. Isn’t it common for the United States to do this kind of thing?So the oil fields were acquired cheaply.This is definitely a good thing for them.This is the conspiracy of Western imperialism.It is as if the story of 150 years ago is being repeated in Dubai, and Dubai is unaware of the Western conspiracy. Dubai does not have a credit rating, and it has a junk rating.The real rating is Abu Dhabi, AA2, which is two A.Dubai has never been rated. According to our data, the risk of Dubai is two to three times higher than that of its sibling provinces, and its credit is even worse than that of Iceland before it went bankrupt.So it is very strange why the major banks in Europe, including HSBC, Barclays, and BNP Paribas that we are familiar with, have lent it a lot of funds?What they are looking at is the face of the boss, and what they are looking at is the oil in Abu Dhabi, so use that as collateral.That's why they dare to play with it like this.In the end, you find these seven-star hotels, various islands, etc. In fact, it is clear that European and American banks let Muhammad of Dubai go to play.In fact, it's all mine. If you don't behave well, I'll take it all back for you.If you really go bankrupt, you will still have your elder brother's oil field as a mortgage.So you see that the smartest banks are European and American banks, and finally you find that the real players are not Dubai, but European and American banks.People just use your name in Dubai to put things there for you to play with.And you can't afford it at all, your net profit of 3 billion US dollars is only 200 million US dollars, how can you pay me back?It doesn't matter, if you can't afford it, let your brother Abu Dhabi pay it back, he is the real boss of Dubai. Banks in Europe and the United States understand that you are brothers. If something really happens, you still have to lend a helping hand. It is impossible for Dubai to go bankrupt in the end.It is impossible for a province to go bankrupt without the country going bankrupt.And let me tell you again, if the world rating agencies rate your country as an A, all your industries and all provinces must be below A, and the national rating is the highest.So the national sovereign rating has to bear everything, it's as simple as that.In fact, we have also seen that Abu Dhabi has also come up with the first capital injection of 15 billion US dollars. If you think about it, as long as it is profitable, we will definitely not get it, and what we get should be the worst.So this time you find that the ones who suffer the most are our Wenzhou comrades again.Every time I talk about Wenzhou, Wenzhou comrades are not happy, saying that Professor Lang always wants to criticize Wenzhou.But this is not that I want to criticize you. Chen Zhiyuan, the chairman of your Wenzhou Chamber of Commerce in Dubai, said in an interview with the media that they lost a lot this time, losing about 2 billion US dollars. Among the Chinese businessmen in Dubai, one tenth are businessmen from Wenzhou, and they have bought a large number of houses.The mortgage trading model of Dubai buildings is different from that in China. It has no guarantee or mortgage.They can sell as long as they have drawings.The first payment is 15%, and the second payment can be sold everywhere, which is called drumming and passing flowers.At the end of the pass, the drum stops, and the last one to get the flowers will lose money.Now the drum just stopped.Who do you think is the last naked swimmer?It was the Wenzhou people who got the flower, so they lost 2 billion US dollars.The property prices in Dubai are similar to ours in Guangzhou, about 20,000 yuan per square meter.What is that?Our Wenzhou businessman compares the level of Shanghai with Dubai. There are many real estate in Shanghai, such as Xintiandi, which cost more than 100,000 yuan.He felt that such a good entrepot, such a good magic castle in the desert, could go up from at least 20,000 yuan, but he didn't expect that 20,000 yuan would be unbearable. Before he could react, the bubble burst.So now Wenzhou businessmen have made a conclusion, called being able to endure loneliness and withstand temptation. I found that the unpaid 3.5 billion U.S. dollars seems to be related to us Chinese.Which investment is it?It was a subsidiary company of Dubai World, called Nasir, which lost money.This is a company that specializes in defrauding Wenzhou businessmen.It's not easy to deceive the Arabs with the game of drumming and passing flowers, because you are my brother and everyone knows what game you play.What about cheating Europeans?Europeans are also as smart as monkeys.It's even more impossible to lie to the Americans. Americans don't come to the Arab world at all.In the end, we can only lie to the "old Chinese", and in the eyes of the "old Chinese", Dubai may be the most luxurious place in the world and the easiest place to create concepts. And the problem is that the crisis in Dubai is not only in the debt restructuring now, but also in the future.More than 400 real estate projects in Dubai are stagnant.The largest artificial island project in Dubai, the Palm Island, has a boss from Shanghai, the boss of Zhongzhou International Holdings Group, Hu Bin, who bought the Shanghai island, and what about Lupu Bridge and Xupu Bridge.He planned to build a total of 70 villas on the island, and sold 12 without a single brick.Therefore, the world's largest artificial island, including the world's tallest Burj Khalifa, which is more than 800 meters high and 300 meters higher than Taipei 101, may become the world's largest unfinished project. The significance of the Dubai crisis does not lie in its possible second wave of financial tsunami, but in its warning significance.It will give China a mirror to reflect on itself.Because I just said that China also likes to pursue high speed, and also likes this kind of development model.Isn't Dubai going to have the biggest one and the biggest one in the world?Don't we often talk about it?We want to do the biggest thing.What we like "most" the most is the same as them.Therefore, our entire country construction today seems to be the most advanced and fastest in the world. "Most cultural" is actually worth reflecting on. In March 2009, "Time Magazine" once suggested that the bubble will burst if you have this model in Dubai, but Dubai doesn't care.What kind of idea would there be in the emirate of Dubai?That is, since January 2009, no news is good news.What it takes is whitewashing.As long as the media dare to report news that is unfavorable to the economy of the emirate, the maximum fine can be 272,500 US dollars.It adopts this method to give birth to the "most culture" and keep expanding the bubble. Now Dubai is a specimen.Who will be the next Dubai?Greece, Russia, and India are all likely to become the next Dubai.Greece has recently been exposed to a debt crisis.The ratio of debt to GDP has a warning line in the world, 60%.Dubai reached 103%, while Greece was 99% in 2009. The crisis in Dubai has already reminded one point, that is, emerging markets are not necessarily safe, and China is actually a part of emerging markets.Many media actually responded, including a recent article in "People's Daily", saying that it is not in line with the national conditions to regard real estate as a pillar industry. The Gulf Cooperation Council (CCC) countries of today are indeed a bit like gold rush towns: rapid growth, economic transformation, unprecedented wealth accumulation, expats flocking. The GCC market was neglected in the past, but now it has become a sweet pastry for global companies to compete.The media has also started to hype the area, for example, with major investments by global corporations such as the Four Seasons Hotel or British sports car maker Aston Martin.Also, the region is so attractive to the west that oilfield service provider Halliburtori has even announced plans to move its corporate headquarters to Dubai.No one can deny the brilliance of GCC.But the question is, will these lights be just a flash in the pan?And can GCC's status as an economic center be maintained for a long time?Now, the major capitals in the Gulf are rapidly expanding and scrambling to build luxury office buildings to attract the attention of the outside world. Will there be an economic bubble one day and then become a ghost town? GCC economies are not all about oil.But the power to create wealth in this region also comes from oil and natural gas.Although the Gulf plans to rapidly diversify its economy, the non-oil industry accounts for less than 60% of the overall export value of the UAE and Bahrain alone.In fact, in these two countries, oil revenue accounts for 3/4 of government revenue.The brutal truth is that a collapse in oil prices would deal a major blow to the GCC's ability to generate wealth, thereby reducing the ability of the public and private sectors to invest and spend in the local economy. How GCC's economy will develop in the future depends on whether oil prices will collapse in the next few years. The future of GCC is to bet on whether the price of oil can be maintained. Due to the current high value of GCC assets, in the short term, certain industries are definitely at risk of a market correction.Real estate is one of them: After a prolonged boom scenario, the real estate market is very likely to be overvalued and there is a risk of needing a correction.Before 2007, there were already signs of such a market correction in Dubai.Infrastructure and Utilities, also among the GCC industries that are likely to be privatized, are now much more overvalued than their peers in other emerging markets. Bubbles may burst in major industries, which is the same as the reason why the GCC stock market needs to be corrected in 2006 to make stock evaluations more reasonable. This article is excerpted from "Dubai & CO.: A Global Layout to Grab Business Opportunities in the Gulf Countries" by Aamir A. Rehman (USA)
The media has an over-interpretation, combining this matter with Argentina's sovereign default in 2001, including Russia's national debt default in 1999.Often the reason for over-interpretation is a basic ignorance.I recently read a lot of media reports, basically nonsense, I didn’t understand it, and then compared the east and the west, looked for some news hotspots, and even said, ouch, it’s over, the financial crisis is about to break out again, what else? The so-called second wave of the financial tsunami. The amount of debt restructuring in Dubai has gradually shrunk. Before we heard that the debt amount was 59 billion US dollars, but later it was only 26 billion US dollars, so there is no need for reorganization. The real problem is 3.5 billion US dollars, which is the extension That $3.5 billion repaid in 6 months. What is $3.5 billion?If you think about it, if only 3.5 billion U.S. dollars has to be repaid for 6 months, this is a very small amount of debt. Why is there such a commotion over these 3.5 billion U.S. dollars?This in itself is unreasonable. You look at the global stock market, it's freaking out. "Black Thursday" and "Black Friday" fell sharply for two days.The U.S. stock market was closed for Thanksgiving, and after returning from the holiday, it also found that it also fell.Even the Chinese stock market fell, falling below 3100 points.One reason people are panicking is fear of contagion effects, especially for sovereign funds.Dubai is like this, if you don’t pay back the money, will other sovereign funds do the same in the future?Everyone is worried that this matter will spread to emerging economies.Once the capital chain is broken, it will be troublesome. Some people compare Dubai World with Lehman Brothers, which collapsed due to the financial tsunami.But in fact, if you study the data carefully, you will find that the resources and funds held by Lehman Brothers are much larger than those of Dubai World.The subprime mortgage back then was a very long debt chain, but the debt chain in Dubai was actually very short. It was a payment crisis. It cannot be compared with Lehman Brothers, and it is not a heavyweight.The subprime debt is a "melamine" problem. The entire subprime debt has not been paid, and then the entire US financial system is full of "melamine" poison. This is terrible.As for Dubai, you just pay it back, it’s nothing special.As long as it is paid back, the crisis will be resolved.If readers are interested in the financial tsunami, please refer to my book and . Let me explain Dubai first.A lot of people haven't figured it out yet.Dubai is one of the seven emirates of the United Arab Emirates.In 1971, these seven emirates (including Abu Dhabi, Dubai, Sharjah, Ajman, Fujairah, Umm Al Quwain, and Ras Al Khaimah joined in 1972) suddenly said that our brothers Well, let's organize a country, what is the United Arab Emirates.Dubai is the second largest, followed by Abu Dhabi.So everyone should know that Dubai is just a province of the United Arab Emirates, and the largest province is called Abu Dhabi.Well, because it is the largest, it will be the first in command, and the second in command will be Dubai, and the other five emirates are very small.As for the seven buddies, Dubai is uniquely endowed with a little bit of oil in the past and a good entrepot port, so it used to be very beautiful.However, recently it was suddenly discovered that the boss is still the boss, and oil was discovered in Abu Dhabi, and it is a super large oil field, so the edge of the second brother was covered. Look back at the company Dubai World, the center of the storm that can't afford the money.Taking the data in 2008 as an example, the total revenue was only 3 billion US dollars, and the net profit was only 200 million US dollars, which was not enough to repay the interest.But this enterprise is a state-owned enterprise.Therefore, many people think that if the assets of state-owned enterprises have problems, the government will support them.But this time it's okay, Dubai said I didn't support it.Dubai does not support it, but Abu Dhabi (Abu Dhabi is the capital of the United Arab Emirates, representing the country) will support it.Because Dubai is just a province, how can the province make decisions for the country?So the country has to support it, and Abu Dhabi will pay for it. We said before that Dubai World is an "enterprise on which the sun never sets", with assets spread across more than 100 countries and cities around the world. It is crazy to buy ports everywhere, just like Japan back then.Especially in investment finance, it has acquired the financial assets of many companies, as well as the equity of many banks, and it has bought them all.MGM, it also has shares, more than 50% of the shares.So in fact, the purpose of Dubai is not to do industry, it is to do financial services. In the 1950s, oil fields were discovered in Dubai, because the resources in Dubai were actually not as many as imagined, and it was said that they would be fully mined in 2010, and then they consciously transformed into other industries.But we see that any financial center in history—Amsterdam, Frankfurt, London—is supported by the real economy, and they all gradually extend from the manufacturing industry to the financial system.But Dubai does not have the support of the real economy, so something really happened this time. What's interesting is that after "9.11", there was a big threshold for traveling to the United States at that time, so what should I do?Dubai just happens to be in the middle, and it has become a leisure area for many Middle Easterners to travel.So it took this opportunity to vigorously develop real estate construction and tourist attraction construction.Dubai is the first in the entire Arab world to allow foreigners to invest in real estate, and its investment environment is very relaxed.Foreigners' investment is not limited to real estate, but can invest in any industry, free of tax, and 100% can be remitted back to their home country, which is very, very loose. The sheikh of Dubai is called Sheikh Mohammed Al Maktoum, and he wrote a book called "My Vision" to promote his Dubai model.He said that Dubai pursues innovation and wants to become the world's economic center, and suggested that other Arab countries should learn from the Dubai model.You see, this saying is so familiar, we often say it ourselves.Now the media has given a definition to the Dubai model, which is called large-scale borrowing, large-scale construction, and economic development.This is the standard sense of the Dubai model.Do you think it borrowed all this money for?The so-called most luxurious seven-star hotel in the world, the Burj Al Arab, used 26 tons of gold.Muhammad, who created the desert myth, has a famous saying. He said that the antelope must run faster than the lion, otherwise it will be eaten, and the lion must run faster than the antelope, otherwise it will starve to death.So he said, whether it is an antelope or a lion, it must run faster than others.So you can see that Dubai has been running very fast, building a lot of construction projects, demanding the fastest development speed, building the world's tallest building, and the largest indoor artificial ski resort, which is extremely luxurious, and it is a place where rich people in the Middle East spend extravagantly. In fact, I want to go to Dubai to play, but I can't afford it.You can see that when the Atlantis Hotel opened in 2009, many stars were invited. At that time, the fireworks were worth 10 million US dollars, which was several times higher than that of the Beijing Olympics. It was really luxurious.I have a question, the Arab countries are quite pragmatic, why is there so many "achievement projects" in Dubai?Same as our China. It is interesting to tell you that there is an essential reason for all this.When did it all start? year 2006.So what year is 2006?That's what the UAE's second in command took over that year.Who is he?He is the Sheikh of Dubai - Muhammad.He is the second in command, and that in command is the chief of Abu Dhabi named Khalifa.The number one man succeeded to the throne in 2004, and in 2005 he raised the salary of civil servants by 100%. After that, everyone was very happy, very happy, and supported him.Then in 2006, the second-in-command came to power, so what?There are three fires for new officials to take office, and if they perform well, they will start construction projects, build highways, and build buildings, which are what we usually call performance projects. This kind of ghost thing that wastes people and money is not only done by us, but also by Dubai. It's really interesting.All the major constructions in Dubai were basically carried out after this buddy came to power, and probably promoted construction projects with a scale of 300 billion U.S. dollars. But the two brothers didn't get along very well.In the end, if you think about it, if the boss hadn't reported the second child, the Dubai incident might not have come out.Why? $3.5 billion is not a problem, you just need to borrow it.As long as you borrow another 3.5 billion US dollars, you can last another half a year.The problem is that once it is exposed to you, no one will lend you money. This is the biggest problem.Well, you wouldn't have a problem in the first place, so I'll expose it to you. Don't you have a problem?It is very likely that they have some conflicts in order to chase the same girlfriend. Of course, I don't know the details, but the boss played with the second child, it is true.After this incident was exposed, Abu Dhabi once stated that it would not take all of Dubai’s debts in one package, saying that it would analyze and analyze them one by one, and then selectively provide assistance, just to see how your little brother is doing. Then we saw that banks in Europe and the United States borrowed heavily from Dubai.Haven't European and American banks always been shrewd?As cunning as a fox.Why should they invest in Dubai World?As I said earlier, the annual revenue of this Dubai World is only US$3 billion, and the net profit is only US$200 million. If you borrow US$59 billion from it, as long as the interest increases by 0.3 percentage points, it will not be able to pay it back, right?Then how dare you borrow it?Since it dares to borrow, it must ensure that it can get it back after something goes wrong, otherwise it will not borrow it.But Dubai has nothing, why should it take it back?Here is the problem, it is just a province, its big brother is Abu Dhabi, it has to bear the burden.So how did it end up?It is best that you borrow a little more, because 59 billion US dollars is not enough, it is best to borrow 200 billion US dollars and forget it.In the end they sign a contract, I will lend you the money, no problem, if you can't pay it back, you use the oil field as a mortgage, isn't that great?Isn't that cheap access to oil fields?It must be done like this.So the ulterior motive is not in Dubai, but in Abu Dhabi. So this is actually a conspiracy.European and American banks wantonly lend to Dubai with two goals, one is Abu Dhabi's super oil field, and the other is Islamic bonds. About 9 billion of the 59 billion US dollars are Islamic bonds, and 6 billion of the 26 billion US dollars of debt restructuring are Islamic bonds.What does this mean?It means that European and American banks can snipe Islamic bonds through Dubai, thus spreading to the entire Islamic financial system. So it kills two birds with one stone.Something is wrong with you, right?The creditworthiness of bonds has been damaged.Also, mortgage your oil fields if you can't pay them back.If oil fields are mortgaged, well, Wall Street lowers the price of oil, and then lowers it back to $30 a barrel. Isn’t it common for the United States to do this kind of thing?So the oil fields were acquired cheaply.This is definitely a good thing for them.This is the conspiracy of Western imperialism.It is as if the story of 150 years ago is being repeated in Dubai, and Dubai is unaware of the Western conspiracy. Dubai does not have a credit rating, and it has a junk rating.The real rating is Abu Dhabi, AA2, which is two A.Dubai has never been rated. According to our data, the risk of Dubai is two to three times higher than that of its sibling provinces, and its credit is even worse than that of Iceland before it went bankrupt.So it is very strange why the major banks in Europe, including HSBC, Barclays, and BNP Paribas that we are familiar with, have lent it a lot of funds?What they are looking at is the face of the boss, and what they are looking at is the oil in Abu Dhabi, so use that as collateral.That's why they dare to play with it like this.In the end, you find these seven-star hotels, various islands, etc. In fact, it is clear that European and American banks let Muhammad of Dubai go to play.In fact, it's all mine. If you don't behave well, I'll take it all back for you.If you really go bankrupt, you will still have your elder brother's oil field as a mortgage.So you see that the smartest banks are European and American banks, and finally you find that the real players are not Dubai, but European and American banks.People just use your name in Dubai to put things there for you to play with.And you can't afford it at all, your net profit of 3 billion US dollars is only 200 million US dollars, how can you pay me back?It doesn't matter, if you can't afford it, let your brother Abu Dhabi pay it back, he is the real boss of Dubai. Banks in Europe and the United States understand that you are brothers. If something really happens, you still have to lend a helping hand. It is impossible for Dubai to go bankrupt in the end.It is impossible for a province to go bankrupt without the country going bankrupt.And let me tell you again, if the world rating agencies rate your country as an A, all your industries and all provinces must be below A, and the national rating is the highest.So the national sovereign rating has to bear everything, it's as simple as that.In fact, we have also seen that Abu Dhabi has also come up with the first capital injection of 15 billion US dollars. If you think about it, as long as it is profitable, we will definitely not get it, and what we get should be the worst.So this time you find that the ones who suffer the most are our Wenzhou comrades again.Every time I talk about Wenzhou, Wenzhou comrades are not happy, saying that Professor Lang always wants to criticize Wenzhou.But this is not that I want to criticize you. Chen Zhiyuan, the chairman of your Wenzhou Chamber of Commerce in Dubai, said in an interview with the media that they lost a lot this time, losing about 2 billion US dollars. Among the Chinese businessmen in Dubai, one tenth are businessmen from Wenzhou, and they have bought a large number of houses.The mortgage trading model of Dubai buildings is different from that in China. It has no guarantee or mortgage.They can sell as long as they have drawings.The first payment is 15%, and the second payment can be sold everywhere, which is called drumming and passing flowers.At the end of the pass, the drum stops, and the last one to get the flowers will lose money.Now the drum just stopped.Who do you think is the last naked swimmer?It was the Wenzhou people who got the flower, so they lost 2 billion US dollars.The property prices in Dubai are similar to ours in Guangzhou, about 20,000 yuan per square meter.What is that?Our Wenzhou businessman compares the level of Shanghai with Dubai. There are many real estate in Shanghai, such as Xintiandi, which cost more than 100,000 yuan.He felt that such a good entrepot, such a good magic castle in the desert, could go up from at least 20,000 yuan, but he didn't expect that 20,000 yuan would be unbearable. Before he could react, the bubble burst.So now Wenzhou businessmen have made a conclusion, called being able to endure loneliness and withstand temptation. I found that the unpaid 3.5 billion U.S. dollars seems to be related to us Chinese.Which investment is it?It was a subsidiary company of Dubai World, called Nasir, which lost money.This is a company that specializes in defrauding Wenzhou businessmen.It's not easy to deceive the Arabs with the game of drumming and passing flowers, because you are my brother and everyone knows what game you play.What about cheating Europeans?Europeans are also as smart as monkeys.It's even more impossible to lie to the Americans. Americans don't come to the Arab world at all.In the end, we can only lie to the "old Chinese", and in the eyes of the "old Chinese", Dubai may be the most luxurious place in the world and the easiest place to create concepts. And the problem is that the crisis in Dubai is not only in the debt restructuring now, but also in the future.More than 400 real estate projects in Dubai are stagnant.The largest artificial island project in Dubai, the Palm Island, has a boss from Shanghai, the boss of Zhongzhou International Holdings Group, Hu Bin, who bought the Shanghai island, and what about Lupu Bridge and Xupu Bridge.He planned to build a total of 70 villas on the island, and sold 12 without a single brick.Therefore, the world's largest artificial island, including the world's tallest Burj Khalifa, which is more than 800 meters high and 300 meters higher than Taipei 101, may become the world's largest unfinished project. The significance of the Dubai crisis does not lie in its possible second wave of financial tsunami, but in its warning significance.It will give China a mirror to reflect on itself.Because I just said that China also likes to pursue high speed, and also likes this kind of development model.Isn't Dubai going to have the biggest one and the biggest one in the world?Don't we often talk about it?We want to do the biggest thing.What we like "most" the most is the same as them.Therefore, our entire country construction today seems to be the most advanced and fastest in the world. "Most cultural" is actually worth reflecting on. In March 2009, "Time Magazine" once suggested that the bubble will burst if you have this model in Dubai, but Dubai doesn't care.What kind of idea would there be in the emirate of Dubai?That is, since January 2009, no news is good news.What it takes is whitewashing.As long as the media dare to report news that is unfavorable to the economy of the emirate, the maximum fine can be 272,500 US dollars.It adopts this method to give birth to the "most culture" and keep expanding the bubble. Now Dubai is a specimen.Who will be the next Dubai?Greece, Russia, and India are all likely to become the next Dubai.Greece has recently been exposed to a debt crisis.The ratio of debt to GDP has a warning line in the world, 60%.Dubai reached 103%, while Greece was 99% in 2009. The crisis in Dubai has already reminded one point, that is, emerging markets are not necessarily safe, and China is actually a part of emerging markets.Many media actually responded, including a recent article in "People's Daily", saying that it is not in line with the national conditions to regard real estate as a pillar industry. The Gulf Cooperation Council (CCC) countries of today are indeed a bit like gold rush towns: rapid growth, economic transformation, unprecedented wealth accumulation, expats flocking. The GCC market was neglected in the past, but now it has become a sweet pastry for global companies to compete.The media has also started to hype the area, for example, with major investments by global corporations such as the Four Seasons Hotel or British sports car maker Aston Martin.Also, the region is so attractive to the west that oilfield service provider Halliburtori has even announced plans to move its corporate headquarters to Dubai.No one can deny the brilliance of GCC.But the question is, will these lights be just a flash in the pan?And can GCC's status as an economic center be maintained for a long time?Now, the major capitals in the Gulf are rapidly expanding and scrambling to build luxury office buildings to attract the attention of the outside world. Will there be an economic bubble one day and then become a ghost town? GCC economies are not all about oil.But the power to create wealth in this region also comes from oil and natural gas.Although the Gulf plans to rapidly diversify its economy, the non-oil industry accounts for less than 60% of the overall export value of the UAE and Bahrain alone.In fact, in these two countries, oil revenue accounts for 3/4 of government revenue.The brutal truth is that a collapse in oil prices would deal a major blow to the GCC's ability to generate wealth, thereby reducing the ability of the public and private sectors to invest and spend in the local economy. How GCC's economy will develop in the future depends on whether oil prices will collapse in the next few years. The future of GCC is to bet on whether the price of oil can be maintained. Due to the current high value of GCC assets, in the short term, certain industries are definitely at risk of a market correction.Real estate is one of them: After a prolonged boom scenario, the real estate market is very likely to be overvalued and there is a risk of needing a correction.Before 2007, there were already signs of such a market correction in Dubai.Infrastructure and Utilities, also among the GCC industries that are likely to be privatized, are now much more overvalued than their peers in other emerging markets. Bubbles may burst in major industries, which is the same as the reason why the GCC stock market needs to be corrected in 2006 to make stock evaluations more reasonable. This article is excerpted from "Dubai & CO.: A Global Layout to Grab Business Opportunities in the Gulf Countries" by Aamir A. Rehman (USA)