Fresh off Thanksgiving, still stuffed with Butterball and Wild Turkey and familial angst, a ragged collection of hardcore traders shuffled into the shortened Friday session squeezing rubber balls and oozing tryptophan from their eyeballs. This mutant collection of veiny, red-faced Orcs, those who yell "Buy" and "Sell" in their sleep, were looking for a reason to belch reverberating echoes across the hallowed halls of the NYSE and they found one in the desert of Dubai.
Dubai World, a quasi state-owned investment entity, had asked its creditors for a moratorium on debt payments for six months - all $59 billion of its liabilities. When this news came across the wires, the flecks of spittle were flying as sell orders screeched like an osprey descending on a minnow in a tide pool. What started as beach break escalated into the north shore of Oahu as low volume combined with massive paranoia to drive the Dow onto the rocks. It would take a day or two for the Xanax, single malt, and Viagra to wear off, but when it did, a rational realization took hold of the situation by taking Dubai World (DW) in a proper perspective.
DW builds islands for the ultra-rich, erects hotels for the ultra-rich, invests in casinos for the ultra-rich, and operates ports for the goods being shipped by the ultra-rich. They financed all of this activity because Dubai doesn't have a lot of oil left; estimates are that it will run out in 20 years. So, in the midst of a global economic crisis, a company that caters to the ultra-rich and is built on a mountain of debt is having trouble? As the port operators in New Jersey would say, "fuggedaboutit."
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