O Hai Dubai! Fail Never Takes A Holiday

November 26th, 2009 by alyx · 2 Comments · fail, sovereign wealth


While we in America prepare to stuff our faces, the rest of the world is giving Dubai the stinkeye (and the dollar is continuing to die in a fire, so yeah, even though our markets are closed we’re losing plenty of wealth today, too):

Dubai World, the government investment company burdened by $59 billion of liabilities, roiled markets around the world yesterday by seeking to delay repayment on much of its debt. The dollar’s slump prompted Finance Minister Hirohisa Fujii to say Japan’s government is watching currencies “very closely,” while traders said the Swiss central bank sold the franc after it climbed to the highest value against the euro since June.

“Dubai isn’t doing risk appetite any favors at all and the markets remain in a vulnerable state of mind,” said Russell Jones, head of fixed-income and currency research in London at RBC Capital Markets. “We’re still in an environment where we’re vulnerable to financial shocks of any sort and this is one of those.”

Of course, CDS are now spendier against every major emerging market’s sovereign debt, as well. I did find one bright spot for the loller dollar:

Vietnam’s dong, the world’s worst-performing currency, declined to a record low against the dollar after the central bank devalued the currency to curb inflation. South Africa’s rand weakened 2 percent versus the U.S. currency as gold declined. The Turkish lira slumped 2.1 percent against the greenback, and Hungary’s forint lost 1.3 percent per euro.

So how many weird looks do you think I’d get for a USD: IT’S BETTER THAN BUYING DONGS t-shirt?

Happy Thanksgiving!

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