Over the past decade Dubai has touted its resorts, skyscrapers and beaches to build a brand of luxury and extravagance. Its momentum fueled by Western investors, last fall’s financial crisis exposed just how much the Arab emirate had borrowed — between $80 and $90 billion. More
Day: Thursday, December 3, 2009
Today’s Question: How will Dubai’s debt default affect the world economy?
Posted by – December 3, 2009
Fundamental Reason for Current World Economic Turmoil
Posted by – December 3, 2009
What is the fundamental reason for current world economic turmoil? It is a quadrillion dollar question. Contrary to popular perception, the answer is not US housing crisis or exotic derivatives such as CMO’s and CDO’s or high oil prices or cheap dollar. The fundamental reason is lack of trust. People don’t trust the banks with their hard earned money. Banks don’t trust people to lend money. Investors don’t trust the CEO’s and CFO’s of public companies to invest in them . Business leaders don’t trust the political establishment and political leaders don’t trust private enterprises.Finally people don’t trust their elected officials and public institutions. It is a evil cycle: Classic chicken Egg problem. More