Well about 10 days in and I have to say that there is a hardy sucking vacuum-like sound here in Dubai. Basically it seems the Dubai World announcement has taken the wind out of everything and has sent the powers-that-be scrambling. Apparently (according to the 'free' local press - add sarcasm if you wish) it is all taken out of context, there is no need to panic, the debts will be paid (Insh'Allah) and all they were trying to do is 're-structure' so that they would have a bit of wiggle room to finish some projects. Now never mind that the current finished projects are half full, Dubai still looks like the worlds biggest (but very still) construction site and property values are plummeting, I'm sure completing even more accommodation projects in the Luxury category is a very good idea and one the banks should get into.

A colleague of mine called me to say that he has recently joined a firm in Abu Dhabi and is staying a 'serviced apartment' in Dubai. I went to see it... I was gobsmacked. Forget that it took me an hour to find it (when it was 5 minutes away as the crow flies) as I had to navigate through unmarked construction... it was on the 21st floor and had a stunning view of construction. The original price per day was 1,600 drh (about 500 USD) and oddly was now available for a limited time at about 100 USD per day. So obviously the city is screaming out for more of the same, but on a Palm please and thank you.

Anyhow, the lesson here is this... banks backed this. Banks backed all this. Banks you know and place your money with. They not only backed this but apparently did their dd and believed in it to the tune of billions in credit. And... apparently they thought Dubai World was fully backed by the Sovereign government of Dubai... ah hah... not so! You see they didn't say they were, but they also didn't say they weren't. Anyhow, the banks were too busy dropping truck loads of cash on this to be bothered with the small print. Abu Dhabi is a bit smarter- they are going to 'pick and choose' what they help out with. Not for free of course.

So, the modern city of gold has been built on dreams, ambition, blue sky thinking and imaginary risk management with a dash of corruption. At least the local papers think there is no need to panic, the 20% reduction in the stock market is an aberration and all debts will be honored. The infrastructure is so good and the underlying finances so awesome that Dubai will rise and rise again. The empty shopping malls will attest to the piousness of the locals who are all praying in the local mosques that they have a lot of real gold under the city (not tungsten) or that a high speed train will be built to get them to their new Abu Dhabi jobs.

I'm building a new 'handy translations' list while on this trip- so feel free to add to it at will:

1) Re-structuring: Delaying the inevitable so we can keep playing with your money

2) Risk Management: Turning a blind eye to anything that is contrary to your 'inner gut' feeling that all is OK with the world

3) Credit: Imaginary money printed by the fairies and passed around like a hot potato for the fun and enjoyment of all

4) Fair and Free markets: Fair to anyone with 1/2 a billion or more in cash and a lack of a moral core.

5) ECU Share Price: A daily number determined in a dark room early in the morning and then managed throughout the day- damned be sentiment, logic, fairness or supply/demand

6) ETF's: Imaginary (add something here) printed by the fairies and passed around until someone demands the underlying good- which they never do, which is good as it doesn't exist.

7) Swiss Voters: Farmers with little logic who have successfully torpedoed my 'Swiss based business with Swiss quality' here in the heart of Islam with their silly meaningless vote. Who knew that Muslims read?

Soul over and out.... btw no trip to the gold souk yet due to holiday schedules