Comments on: Another Domino Falls

By: Bryan

Bryan — Sat, 28 Nov 2009 18:34:57 +0000

In reply to Badtux.

I remember reading somewhere that legally the emir owns all of the land in Dubai, and it is leased from him, not bought, so the creditors would own structures, but not the land they are on. It really is a feudal system. Foreclosure could result in being told to remove the structure from the emirate, which would be a bit of a problem. They have bought into multistory trailers without any wheels.

That is the situation for those living on the barrier island South of me on the Gulf, i.e. the land is leased from the county, not owned, so it is not just the emirates that do this sort of thing.

Actually the Dubai government is a sham, because all power rests with the emir and agreements are only in force as long as he feels like it. If you aren’t a member of the emir’s tribe you have no real standing in the emirate. People are stupid to be involved in this kind of situation, and deserve to be conned.

By: Badtux

Badtux — Sat, 28 Nov 2009 13:26:28 +0000

One interesting thing I seem to be picking out of the news is that Dubai structured these deals so shell companies like Dubai World took out the mortgages, not the government itself, so the only option the lenders have is to foreclose on the properties in Dubai courts (snort!). At which point the lenders hold the keys to large empty buildings and vacant lots with half-completed skeletons, *if* Dubai even bothers actually giving them the keys. It makes you wonder WTF these lenders were thinking, because the paper they’re holding explicitly states that the mortgages are *not* backed by the income of the government of Dubai, indeed states no source of income at all for how the loans are going to be repaid. It’s like the whole liar loan fiasco here in the USA, except writ large with international banks!

— Badtux the Amazed Penguin
(but who should not be so amazed by financial institution stupidity by now, I suppose)