Category Archives: Money

Dear Uncle Abu Dhabi, can I borrow a *bit* more cash? Pls thx, Dubai.

Abu Dhabi has already injected 10 billion US dollars several months ago, and bought significant entities such as Emirates Airlines amongst others.

My guess is Dubai has been trying to get more assistance from Abu Dhabi unsuccessfully, and has made this move in a final attempt to get AD to cough up.

But will it cough up enough to manage the debt of between 80 and 150 billion US dollars (depending on who you ask that is Dubai’s total debt)?

Here are a few articles from CNN today on the breaking news.  Will be *interesting* to see what happens to the Dubai Stock Market when it reopens on Sunday.

Has debt freeze exposed Dubai mirage?

November 26, 2009 — Updated 1537 GMT (2337 HKT)

Dubai: Local moves, global implications

November 26, 2009 — Posted: 1352 GMT

Dubai shocks investors amid debt fears

By Simeon Kerr and Jennifer Hughes,
November 26, 2009 — Updated 1352 GMT (2152 HKT)

Investor confidence in Dubai, exemplified by its stunning architecture, has been shaken.



  • The size of Dubai World’s $22bn debt problem has been apparent for a year
  • Bond markets reacted sharply to the news, investors demanded higher premiums
  • BNP analyst: “Investors view this as shockingly bad news”
  • Moody’s cut ratings on some government-related entities to junk status

(Financial Times) — Dubai has shocked investors by asking for a debt standstill at Dubai World, the government’s flagship holding company that has developed some of the world’s most extravagant real estate projects.

The move raised the spectre of default in the Middle East’s trading hub just as early signs of economic recovery have emerged. During the boom, Dubai rode the wave of easy credit generating phenomenal economic growth but was badly hit by the global credit crisis.

Dubai’s surprise move angered some investors who had been reassured by local officials for months that the city would meet all obligations on its $80bn (£48bn) of gross debt in spite of recession and a real estate crash.

“Investors view this as shockingly bad news,” said Rob Whichello of BNP Paribas. Two hours after announcing it had raised $5bn from two Abu Dhabi banks, the department of finance asked for a standstill until May 30 on all financing to the heavily indebted Dubai World and its troubled property unit Nakheel, which is due to pay back $4bn on an Islamic bond on December 14.

This will destroy confidence in Dubai,
the whole process has been so opaque and unfair to investors.

–Eckart Woertz

Dubai also launched a restructuring of the government holding company, which oversees ports operator DP World, the UK-based P&O Ferries and troubled investment company Istithmar. Nakheel, the developer behind the city’s Palm Islands that boast celebrity owners such as David Beckham, has had to shed thousands of staff and left contractors out of pocket as local property prices halved and credit dried up.

A symbol of Dubai’s pre-crunch excess, the government company has had to cancel plans for the world’s tallest tower and a constellation of reclaimed islands, as collapsing cash flow left the developer on the brink.

The government’s announcement came after the local stock market had shut and on the eve of the Eid holidays, during which most offices will be shut until December 6.

“This will destroy confidence in Dubai, the whole process has been so opaque and unfair to investors,” said Eckart Woertz, economist with Dubai’s Gulf Research Centre.

A spokeswoman for the department of finance said the government intended to ask all bondholders to extend until May. But the government said no decision had yet been made on how to deal with investors insisting on repayment in December.

The gaping size of Dubai World’s $22bn debt problem has been apparent for a year. But the government’s level of support has been clouded by politics and a lack of clarity on how much it could raise from international markets and the oil-rich capital of the United Arab Emirates, Abu Dhabi.

Bond markets reacted sharply to the news with investors demanding higher premiums to hold debt from the region. In London trade it cost about $460,000 annually over five years to insure $10m worth of Dubai government debt against default, compared with $360,000 on Tuesday. Prices rose for its neighbours with Abu Dhabi protection $100,000 more than on Tuesday.

Standard & Poor’s and Moody’s Investors Service immediately downgraded the ratings of all six government-related issuers in Dubai following news of the repayment delay and left them on review for possible further downgrade.

Moody’s cut ratings on some government-related entities to junk status, while S&P cut ratings on some entities to one level above junk.

S&P said the restructuring “may be considered a default under our default criteria, and represents the failure of the Dubai government (not rated) to provide timely financial support to a core government-related entity.”



A couple of days ago I was standing in the queue waiting to pay for my fourth pair of skinny jeans in 2 weeks (gone skinny mad!). Next to me was a guy with a WAD of greenbacks – hundreds.

He took the 100 USD notes and placed them on a piece of paper on the counter and then rubs them against the paper.  He lifts up the notes and on the paper is a green stain.

The green of the notes had rubbed off onto the paper.  Counterfeit currency!

At a guess I reckon there was maybe 40 or 50 notes in the wad.

Co-incidentally as we were leaving we ended up exiting the car park right behind the guy.  He was in a Corvette.

Bouncing Cheques

As my cheque bounced, so did my heart

Rym Ghazal

Last Updated: September 16. 2009 7:47PM UAE / September 16. 2009 3:47PM GMT

From The National

Earlier this week, I got “that” phone call. It is now one of the most dreaded messages anyone can receive: “Ma’am, your cheque has bounced.”

I actually heard my heart give a loud thud. With all the horror stories about people being dragged to jail for a single bounced cheque, I really can’t explain my feelings after my landlord’s office called me.

“What? It couldn’t be, I have sufficient funds in my account,” I heard myself explaining in one breath, already on the defensive.

Not listening to me, the accountant told me to show up at the office “immediately” with next month’s rent “in cash” or the landlord would escalate the matter with the “proper authorities”.

There was no room for negotiation, for excuses or anything else. The accusatory tone was unmistakable and, with it, I could feel the humiliation and stress building.

There are plenty of stories about the cutthroat actions of lenders since the economic crisis.

“If you have the money, good, if not, goodbye,” is pretty much the way of the world these days. Perhaps it has always been like that but people used to give you more breathing space because their own finances were better off.

I headed straight to my bank to find out what had happened with my postdated cheque after a quick online perusal of my account revealed that, indeed, the cheque went through, the money was debited and then redeposited after the cheque was returned.

Unless it has happened to you personally, I don’t think anyone realises how quickly the service at a bank changes and their attitude becomes more passively hostile at the mention of a “bounced cheque”. It was a true eye-opener for me.

After a long wait, I went to the designated counter with a heavy feeling in my chest. I explained to the customer service officer my problem, and how the cheque bounced even though I had sufficient funds.

“You sure you had enough money?” he asked me. I said yes, and told him to open the account and look for himself.

After a few minutes of browsing my account, his stern features actually broke into a smile.

“Oh, it was bounced based on incompatible signatures. OK then, no problem,” he said beaming.

And just like that, I was out of the red and a “valued customer” at the bank after almost losing the privilege. What a change of manner and service that piece of information caused.

It seems if you are in a jam and short of some funds, you will be treated like a criminal. I know I felt like one until the banking officer smiled. Actually it turned out that my signature was fine, but because bank tellers make the judgment, sometimes “mistakes are made” I was told.

But what a costly mistake this was, in terms of nerves and reputation – for everybody involved. “Everyone now hates the banks,” the now-friendly customer service representative confided to me.

I was not impressed with the change of attitude, and told him so. He simply laughed it off and said: “A bounced cheque is a very black spot on your financial record these days.” I guess I should consider myself lucky that the experience will not stain my so-called record, even though I did nothing wrong.

I did receive a much friendlier reception at my landlord’s office. “Oh, just a signature problem? No problem, no problem,” said the head accountant at the office. He even said I could bring in cash at “my own convenience” after initially having told me to bring in the full amount immediately.

Honestly, the whole experience left me shaken. It is not enough that you feel horrible and ashamed like you did something wrong, but the added social stigma of being looked down upon and treated like a criminal makes an already uncomfortable situation even worse.

I can’t even imagine how hard it must be for people who are supporting a family to lose a job and sink into debt. The creditors are merciless, and no one is your friend in financial “services” when you are down on your luck.
As an act of charity, people are actually paying off others’ debts to keep them out of jail. It is uncommon, of course, but what a great way to help people out.

In the end, everything worked out well, but now I am going to be extra vigilant with my financial transactions, so that there is no risk of anything – a cheque or my peace of mind – “bouncing” again.

Strange Days

So they ask my husband to take a pay cut the day after we buy ourselves a coffee machine.

Timing is everything!

Anybightme, here is a picture of the shiny new toy.  I can highly recommend this if anyone is thinking about getting a home machine.  It took us about a week to get it working well, but now we are making some kick-arse coffee!

It also makes great Chai Latte.

The Giotto Rocket Espresso Machine

The Giotto Rocket Espresso Machine

Cost of Living

I’ve had a couple of inquiries recently from readers about cost of living as well as housing and accommodation in Dubai.  Here are some starting thoughts… questions welcome!

Housing and Accommodation

The cost of accommodation in Dubai can only be described as ferocious.  It is also your most significant budget item by a very long way.  To give you an idea of costs in The Greens Community (which is very nice but by no means the most expensive option around)…

1 bedroom flats (around 65-70 square metres) cost between 110,000-120,000 AED per year. That’s around 33,000 USD which is 635 USD per week. (Or 48,000 AUD per year which is 925 AUD per week)

2 bedroom flats will cost you around 180,000 AED per year. That’s around 50,000 USD which is 960 USD per week. (Or 72,000 AUD per year which is 1,385 AUD per week)

The rent is due for the entire year up front in one payment. Your employer usually lends you the entire rental cost for the year and then deduct it from your pay each month over a period of 12 months. The loan is interest-free. It is my understanding that most – if not all – companies will pay the rent for their employees – and deduct it from their salaries. The exception would be companies that provide company accommodation. Meaning you do not have to find a flat and sign a lease yourself.

Will rental prices come down soon?

Realistically, I don’t think we can expect rental prices to come down much in the next 6-12 months. However, there are plenty of people who disagree with me on this.

UPDATE 16 Jan 2009: There has been some downwards movement on rental prices since I wrote this. Not sure how much. If I hear more I will update with some figures.

Discovery Gardens

Discovery Gardens

Discovery Gardens

The area of Discovery Gardens is a cheaper option.  It is brand new but has few trees (yet) and is surrounded by car parks. It’s where we started looking but seemed rather isolated.

Do I need a car?

Without exception, Yes. However, cars and fuel are MUCH cheaper in Dubai than in the US,  Europe or Australia. For example, Petrol (gasolene) is 16c AED per gallon.

One of the best things about the Greens, apart from the trees and the birds and a goodgym and pool, is that there is a bunch of cafes and a mall with a supermarket that you can easily walk to. Not many places in Dubai have that. Normally you have to take the car to everywhere. That means 2 cars are a necessity.

Finding somewhere to live…

The best place to look for accommodation on the internet is

Happy Birthday to Me!!!

Today is my birthday… and I can honestly say that having Mozzle survive this near-death experience is the best birthday present I have EVER had!

BESTest Birthday Present Evah!!!

BESTest Birthday Present Evah!!!

I want to send a hello to all the wonderful people that sent me a ‘happy birthday’ today…

Miriam – perfecting her bedside manner in Townsville (the rara skirt’s a nice touch!)
– dancing with underwear models in LA (didn’t you do that last year?)
– sipping cocktails on the way to Omaha – champagne and a sleeping pill (affectionately referred to as a  ‘Chemical Upgrade’)
– being nominated for innovaton prizes in Amsterdam
– taking a vow of silence in London
– Vogue-ing in NYC
My Dad
– in Melbourne planning how to invest my lotto winnings.
playing with fireworks in Sydney
– cat-herding in Sydney
– sharing my birthday and keeping accenture Taipei in business
– kerst dranken in Brussels
Fatima – looking impossibly lovely (as usual) in Brussels
Fiona – preparing for adventure in Perth
Claire – double-billing with the Meat Sluts in SFO
and finally…… Richard – my lovely husband who spent an exhausting and successful day with me in Dubai hunting for a birthay present!

You guys are the BEST!

Hard Drive Crash!

Sorry for the lack of updates!  My hard drive finally died last week.  The faithful HP widescreen laptop that I bought in Amsterdam several years ago has been living on borrowed time for at least a year or two now.

It wasn’t the fanciest laptop in the world even when it was new.  My laptops always seem to die when I have just spent a lot of money on something else and am consequently cash-poor.  So I didn’t spend a lot on it.  I was fortunate enough that my friend also needed a new laptop at the time and she did all the work researching laptops for a good balance of price versus functionality.  So when she decided on the HP I got my husband (then fiance) to give it the thumbs up (boys love a gadget purchase) and I bought one too. I think my friend already retired hers to a low-demand user a couple of years back.  But mine has been doing its job faithfuly all that time.

I only ran Outlook and Mozilla on it in the end.  It was too old and weak to cope with the later versions of Internet Explorer.  I used to joke about adding a new option to the pop-ups you get on certain applications asking if you want to upgrade to the latest version (Flash, Adobe, etc.)  I felt a ‘Hell No!’ or a ‘Do I look suicidal to you’ would have been very appropriate. Occasionally my husband would use it for something and absent-mindedly accept a request to upgrade.  Then there would be recriminations from me followed by uninstalls and then promises never to touch my hardware again.

I was rather fond of that PC actually. I really enjoyed using it. I hope it’s happy in the interent cafe in the sky…downloading all the new software its missed out of the past 2 years without fear of disaster. RIP HP.

So you are now being broadcast to from the desktop of a massive Dell Lattitude D820 which is a developers machine that belongs to my husband. He has another laptop for work so he suggested I requisition this until I can decide what I want to replace the HP with (okay, and also when I don’t have shipping costs and housing set up costs breathing down my neck.  Like I said. The always seem to die when I’m poor.) The Dell is a magnificent beast that could probably run a space-station and is nearly as heavy as one.  Having it on your lap while you type feels a bit like being pinned by a fallen beam. Not a long term solution but a very good one for the meantime for which I am very grateful.