From the LA Times: Beijing's Olympic building boom becomes a bust.
Reporting from Beijing -- "Empty," says Jack Rodman, an expert in distressed real estate, as he points from the window of his 40th-floor office toward a silver-skinned prism rising out of the Beijing skyline.
"Beautiful building, but not a single tenant.
Beijing went through a building boom before the 2008 Summer Olympics that filled a staid communist capital with angular architectural feats that grace the covers of glossy design magazines.
Now, six months after the Games ended, the city continues to dazzle by night, with neon and floodlights dancing across the skyline. By day, though, it is obvious that many are "see-through" buildings, to use the term coined during the Texas real estate bust of the 1980s.
By Rodman's calculations, 500 million square feet of commercial real estate has been developed in Beijing since 2006, more than all the office space in Manhattan. And that doesn't include huge projects developed by the government. He says 100 million square feet of office space is vacant -- a 14-year supply if it filled up at the same rate as in the best years, 2004 through '06, when about 7 million square feet a year was leased.
More capacity built just in 2006 than all the office space in Manhattan. Anybody see the problem?
Naturally, it goes without saying that there banking sector is kaput too.
Decouple that, bitches!
Saturday, February 28, 2009
Friday, February 27, 2009
Baltic Blowout
CBS Marketwatch: New Latvian prime minister faces economic crisis
President Valdis Zatlers named Valdis Dombrovskis as prime minister and asked him to form a new government, according to media reports on Thursday. Dombrovskis, a 37-year-old former finance minister, is from the centre-right party, New Era.
Following his nomination, Dombrovskis said that Latvia was "on the verge of bankruptcy" and would need to cut the budget by at least $1.27 billion or risk financial collapse, the BBC reported.
President Valdis Zatlers named Valdis Dombrovskis as prime minister and asked him to form a new government, according to media reports on Thursday. Dombrovskis, a 37-year-old former finance minister, is from the centre-right party, New Era.
Following his nomination, Dombrovskis said that Latvia was "on the verge of bankruptcy" and would need to cut the budget by at least $1.27 billion or risk financial collapse, the BBC reported.
Junky Punky Girlz!!!
The Telegraph reports: Moody's predicts default rate will exceed peaks hit in Great Depression.
In what will be seen by many as die-cast confirmation that the world economy is plummeting towards an economic and corporate implosion of unprecedented proportions, Moody's said it anticipated a tidal wave of defaults was approaching.
It said that in the coming months more than 15pc of speculative-grade bonds and loans - all but the most highly-rated - would default on their debts.
This peak is even higher than the peak reached in 1933, when bank after bank throughout America was collapsing, taking hoards of other companies with them. Back then, the default rate peaked at 15.4pc; moreover these companies were former investment grade issuers regarded as more reliable credit prospects than their contemporary counterparts.
Not that the EE would listen to Moody's, who are like the cheerleaders of this absurd credit boom, but it should be sobering to anyone willing to wade into the minefield that are corporate bonds particularly the junky punky ones.
Keep your powder dry. They can't bail out everyone.
In what will be seen by many as die-cast confirmation that the world economy is plummeting towards an economic and corporate implosion of unprecedented proportions, Moody's said it anticipated a tidal wave of defaults was approaching.
It said that in the coming months more than 15pc of speculative-grade bonds and loans - all but the most highly-rated - would default on their debts.
This peak is even higher than the peak reached in 1933, when bank after bank throughout America was collapsing, taking hoards of other companies with them. Back then, the default rate peaked at 15.4pc; moreover these companies were former investment grade issuers regarded as more reliable credit prospects than their contemporary counterparts.
Not that the EE would listen to Moody's, who are like the cheerleaders of this absurd credit boom, but it should be sobering to anyone willing to wade into the minefield that are corporate bonds particularly the junky punky ones.
Keep your powder dry. They can't bail out everyone.
Peeing on the Electric Fence
The AP reports: Ryanair could make passengers pay for toilets.
Is a toilet an optional extra when you're at 30,000 feet? Ryanair boss Michael O'Leary seems to think so — as his no-frills carrier plumbs new depths by thinking of charging customers to use the aircraft loo.
As always, O'Leary suggested a separate toilet free would lower ticket costs and make flying, somehow, easier for all. Nobody, even his own aides, seemed to be sure if he was serious or pursuing his well-documented penchant for making brazen declarations to win free advertising.
"One thing we have looked at in the past, and are looking at again, is the possibility of maybe putting a coin slot on the toilet door, so that people might have to actually spend a pound to `spend a penny' in future," O'Leary said, using a local euphemism for relieving one's self.
Do you need a Harvard MBA to realize that this is a terrible idea? How much additional money will you make compared to pissing people off (pardon the pun!)?
And just compare it to the damage that these irate passengers are likely to wreak, and this is Bastiat all over again. Ignore the unseen consequences in favor of the seen ones.
The first person who pees on the floor is likely to cause more damage both directly and indirectly (bad publicity) than all the revenue that you are likely to make from this move.
Dumb, dumb, dumb.
Is a toilet an optional extra when you're at 30,000 feet? Ryanair boss Michael O'Leary seems to think so — as his no-frills carrier plumbs new depths by thinking of charging customers to use the aircraft loo.
As always, O'Leary suggested a separate toilet free would lower ticket costs and make flying, somehow, easier for all. Nobody, even his own aides, seemed to be sure if he was serious or pursuing his well-documented penchant for making brazen declarations to win free advertising.
"One thing we have looked at in the past, and are looking at again, is the possibility of maybe putting a coin slot on the toilet door, so that people might have to actually spend a pound to `spend a penny' in future," O'Leary said, using a local euphemism for relieving one's self.
Do you need a Harvard MBA to realize that this is a terrible idea? How much additional money will you make compared to pissing people off (pardon the pun!)?
And just compare it to the damage that these irate passengers are likely to wreak, and this is Bastiat all over again. Ignore the unseen consequences in favor of the seen ones.
The first person who pees on the floor is likely to cause more damage both directly and indirectly (bad publicity) than all the revenue that you are likely to make from this move.
Dumb, dumb, dumb.
Those Bitter Jealous Renters
CNN reports: Boomers: 30% underwater.
What a turnaround for the American Dream!
According to a report released Wednesday, the real estate market bust and stock market declines have carved a huge chunk out of the assets of baby boomers.
So much home equity has been lost that 30% of boomers, aged 45 to 54, are underwater in their homes, according to "The Wealth of the Baby Boom Cohorts After the Collapse of the Housing Bubble. " The report, released by D.C.-based think tank the Center for Economic and Policy Research, also found that 18% of boomers aged 55 to 64 would owe money at close if they sold their homes.
The CEPR also found that people who were renting homes in 2004 will have more wealth in 2009 than those who were owners. That's true for all five wealth groups the study analyzed, from the poorest to the wealthiest.
BWAHAHAHHAHAHAHHAHAHAHHAHAHHHHHHHHHHHHHHHHHHH!!!
What a turnaround for the American Dream!
According to a report released Wednesday, the real estate market bust and stock market declines have carved a huge chunk out of the assets of baby boomers.
So much home equity has been lost that 30% of boomers, aged 45 to 54, are underwater in their homes, according to "The Wealth of the Baby Boom Cohorts After the Collapse of the Housing Bubble. " The report, released by D.C.-based think tank the Center for Economic and Policy Research, also found that 18% of boomers aged 55 to 64 would owe money at close if they sold their homes.
The CEPR also found that people who were renting homes in 2004 will have more wealth in 2009 than those who were owners. That's true for all five wealth groups the study analyzed, from the poorest to the wealthiest.
BWAHAHAHHAHAHAHHAHAHAHHAHAHHHHHHHHHHHHHHHHHHH!!!
Thursday, February 26, 2009
The Flower of Romance
The Washington Post reports: Market for Romance Goes From Bullish to Sheepish.
See the tall, gregarious young man in the Eighteenth Street Lounge, moving easily toward a group of receptive women as the floor vibrates with reggae music? He's dressed in a sharp Hugo Boss suit, and he knows that the minimum for a table is $240.
But he's not offering to buy the drinks. And the suit? He bought it a year ago, when he had a six-figure salary.
Dating in the time of the pink slip means feeling the squeeze of the drastically reduced paycheck, the sudden sting of the layoff. From investment bankers to real estate developers to construction workers, no job means no buying rounds of $15 martinis for a pretty woman and her girlfriends. No hosting parties in the bachelor loft. And often, no idea how to present one's new self on the dating market.
"It's been incredibly stressful for me," said Neil Welsh, 27, the guy in the suit, who until last year was marketing director for a booming real estate company. "I was so used to using my financial situation to leverage my dating."
For many affected by the recession, dating is the least of their worries. But the market crash has had a particular impact on young adults who developed their dating skills in fat times, the twentysomethings who spent lavishly to show that they could afford the finer things. Now, with national unemployment rates at 8.8 percent for people 25 to 34, they are looking for more creative ways to attract partners -- and reassessing what all that big spending really meant.
Alexandria native Niko Papademitriou, 27, became an investment banker with a Cleveland firm soon after he graduated from college. The money was steady enough for him to fly regularly to Manhattan to see his girlfriend and take her to upscale restaurants such as Bond Street and Cafe Gray.
"A large aspect of my life -- three out of the first five conversations that we had -- I told her, 'You're not going to see much of me in the next 15 years if we start dating, because I'm going to be making a lot of money.' " He thinks that worked in his favor, "not so much for the money, but for the drive. It's one of those things in men that women find attractive."
Since being laid off in November, he has moved back to Alexandria to live with his mother. He now takes the Chinatown bus -- for as little as $5 each way -- to visit his girlfriend. Round-trip airfare between Cleveland and New York City averages more than $200.
"It's definitely putting stress on our relationship," he said recently, sitting in an Old Town cafe. "It comes back to this whole manhood thing. Like, can you be the provider, not just for yourself but for others?"
It's been tough on his girlfriend, he said. "She knows that she needs to be this understanding, positive influence in my life. At the same time, there is a lot of fear on her part, knowing that my industry and the one that we had kind of mentally projected ourselves and our way of life on could be over, or at least on pause for a while."
Lindsey Schwalb, 22, of Arlington said the financial crunch has made men she knows more amenable to settling down. "People are looking for some form of stability. Instead of someone you have to impress monetarily, they want someone they can concentrate on spending quality time with."
Welsh said he is scaling back on dating costs while he builds a new business, an Internet marketing company.
"Now I'm more inclined to take a girl to a good ethnic restaurant," he said, whereas before, "I was constantly worried about being judged for how much money I was spending."
See the tall, gregarious young man in the Eighteenth Street Lounge, moving easily toward a group of receptive women as the floor vibrates with reggae music? He's dressed in a sharp Hugo Boss suit, and he knows that the minimum for a table is $240.
But he's not offering to buy the drinks. And the suit? He bought it a year ago, when he had a six-figure salary.
Dating in the time of the pink slip means feeling the squeeze of the drastically reduced paycheck, the sudden sting of the layoff. From investment bankers to real estate developers to construction workers, no job means no buying rounds of $15 martinis for a pretty woman and her girlfriends. No hosting parties in the bachelor loft. And often, no idea how to present one's new self on the dating market.
"It's been incredibly stressful for me," said Neil Welsh, 27, the guy in the suit, who until last year was marketing director for a booming real estate company. "I was so used to using my financial situation to leverage my dating."
For many affected by the recession, dating is the least of their worries. But the market crash has had a particular impact on young adults who developed their dating skills in fat times, the twentysomethings who spent lavishly to show that they could afford the finer things. Now, with national unemployment rates at 8.8 percent for people 25 to 34, they are looking for more creative ways to attract partners -- and reassessing what all that big spending really meant.
Alexandria native Niko Papademitriou, 27, became an investment banker with a Cleveland firm soon after he graduated from college. The money was steady enough for him to fly regularly to Manhattan to see his girlfriend and take her to upscale restaurants such as Bond Street and Cafe Gray.
"A large aspect of my life -- three out of the first five conversations that we had -- I told her, 'You're not going to see much of me in the next 15 years if we start dating, because I'm going to be making a lot of money.' " He thinks that worked in his favor, "not so much for the money, but for the drive. It's one of those things in men that women find attractive."
Since being laid off in November, he has moved back to Alexandria to live with his mother. He now takes the Chinatown bus -- for as little as $5 each way -- to visit his girlfriend. Round-trip airfare between Cleveland and New York City averages more than $200.
"It's definitely putting stress on our relationship," he said recently, sitting in an Old Town cafe. "It comes back to this whole manhood thing. Like, can you be the provider, not just for yourself but for others?"
It's been tough on his girlfriend, he said. "She knows that she needs to be this understanding, positive influence in my life. At the same time, there is a lot of fear on her part, knowing that my industry and the one that we had kind of mentally projected ourselves and our way of life on could be over, or at least on pause for a while."
Lindsey Schwalb, 22, of Arlington said the financial crunch has made men she knows more amenable to settling down. "People are looking for some form of stability. Instead of someone you have to impress monetarily, they want someone they can concentrate on spending quality time with."
Welsh said he is scaling back on dating costs while he builds a new business, an Internet marketing company.
"Now I'm more inclined to take a girl to a good ethnic restaurant," he said, whereas before, "I was constantly worried about being judged for how much money I was spending."
Tuesday, February 24, 2009
Adsense Nonsense
Crap that candy out, babe
Crap that candy out
Candy crappin' mama
Crap that candy out.
Wednesday, February 18, 2009
Long Division v/s the Candy Crappin' Unicorn™
Yahoo! reports: Obama unveils $75 billion mortgage relief plan.
President Barack Obama says his $75 billion plan to tackle "a crisis unlike any we've ever known" in home foreclosures is necessary to help save the economy.
Obama unveiled the plan in Arizona, hard-hit by the housing crunch. More expensive than expected, it aims to keep 9 million people from losing their homes.
$75B/9M = $8,333.33.
Assuming a $200K house, that means a principal reduction of 4%. It's even less for higher priced houses.
This is a waste of the piece of paper it was written on. And everyone's carryin' on as if the Candy-Crappin' Unicorn™ actually crapped out some candy.
FAIL!!!
President Barack Obama says his $75 billion plan to tackle "a crisis unlike any we've ever known" in home foreclosures is necessary to help save the economy.
Obama unveiled the plan in Arizona, hard-hit by the housing crunch. More expensive than expected, it aims to keep 9 million people from losing their homes.
$75B/9M = $8,333.33.
Assuming a $200K house, that means a principal reduction of 4%. It's even less for higher priced houses.
This is a waste of the piece of paper it was written on. And everyone's carryin' on as if the Candy-Crappin' Unicorn™ actually crapped out some candy.
FAIL!!!
Tuesday, February 17, 2009
The Toupee Files for Bankruptcy!
Reuters reports: Trump Entertainment files for bankruptcy.
Trump Entertainment Resorts Inc, the casino operator named for Donald Trump, filed for bankruptcy protection on Tuesday as recession and declining gambling revenues battered the company and its rivals.
The Chapter 11 filing marks the third plunge into bankruptcy for the company, which was created out of a restructuring in 2005.
Trump, a very public and flamboyant figure in an industry filled with colorful, headstrong executives, said the company represents less than 1 percent of his net worth, and that "my investment in it is worthless to me now."
BTW, it should be entertaining to note that his father (who built the famous "Trump" fortune) would be positively spinning in his grave.
Oh, and good luck to all the bozos living in all the various Trump Towers. Every single one of those corporations is probably in fuck-a-holic-pre-pubescent-bankruptcy.
Oh, and the EE doesn't own a tee-vee. So how does that phrase go again?
YOU'RE FIRED!!!
Trump Entertainment Resorts Inc, the casino operator named for Donald Trump, filed for bankruptcy protection on Tuesday as recession and declining gambling revenues battered the company and its rivals.
The Chapter 11 filing marks the third plunge into bankruptcy for the company, which was created out of a restructuring in 2005.
Trump, a very public and flamboyant figure in an industry filled with colorful, headstrong executives, said the company represents less than 1 percent of his net worth, and that "my investment in it is worthless to me now."
BTW, it should be entertaining to note that his father (who built the famous "Trump" fortune) would be positively spinning in his grave.
Oh, and good luck to all the bozos living in all the various Trump Towers. Every single one of those corporations is probably in fuck-a-holic-pre-pubescent-bankruptcy.
Oh, and the EE doesn't own a tee-vee. So how does that phrase go again?
YOU'RE FIRED!!!
Sunday, February 15, 2009
Setting Sun? Hai! Fucked Economy? Hai!
Bloomberg reports: Japan’s GDP Shrinks 12.7%, Most Since 1974 Oil Shock.
Japan’s economy shrank at an annual 12.7 percent pace last quarter, the most since the 1974 oil shock, amid an unprecedented collapse in exports and production.
Gross domestic product fell for a third straight quarter in the three months ended Dec. 31, the Cabinet Office said today in Tokyo. The median estimate of 26 economists surveyed by Bloomberg News was for an 11.6 percent contraction.
“The economy is in terrible shape and the scary part is that we’re likely to see a similar drop this quarter,” said Seiji Adachi, a senior economist at Deutsche Securities Inc. in Tokyo. “All we can do is wait for overseas demand to pick up.”
Yep, overseas demand will pick up any day now. Hai!
Keep waiting? Hai!
Wonderful to see global "decoupling" in action? Hai!
Japan’s economy shrank at an annual 12.7 percent pace last quarter, the most since the 1974 oil shock, amid an unprecedented collapse in exports and production.
Gross domestic product fell for a third straight quarter in the three months ended Dec. 31, the Cabinet Office said today in Tokyo. The median estimate of 26 economists surveyed by Bloomberg News was for an 11.6 percent contraction.
“The economy is in terrible shape and the scary part is that we’re likely to see a similar drop this quarter,” said Seiji Adachi, a senior economist at Deutsche Securities Inc. in Tokyo. “All we can do is wait for overseas demand to pick up.”
Yep, overseas demand will pick up any day now. Hai!
Keep waiting? Hai!
Wonderful to see global "decoupling" in action? Hai!
Saturday, February 14, 2009
Destination Bankruptcy
From the New York Times: Rainy Days in Paradise.
Destination clubs came into their own five years ago, as a growing number of affluent travelers sought all the advantages of a fancy second home without the inconvenience of upkeep or the monotony of going back to the same place year after year.
For a one-time deposit of $40,000 to more than $1.5 million — depending on how luxurious the accommodations and how long the stay — and annual dues of $3,000 to $100,000, club members would have access to an array of multimillion-dollar properties in prime resort locations —a stone farmhouse in Tuscany, an oceanfront villa in Costa Rica, a slopeside chalet in Aspen, Colo. Before they arrived, the club’s concierge would have stocked the refrigerator with the family’s favorite foods, arranged airport transfers, booked tee times or made restaurant reservations.
And for a while, the clubs thrived. Many used the hefty deposits and readily available credit to start building their collection of properties. Then, taking advantage of rapidly rising real estate prices, particularly in luxury markets, the clubs used their newly grown equity to take on more debt and acquire more homes. That, in turn, allowed them to lure more members with an increasing portfolio of destinations.
But when the economy fell apart, it largely took the destination clubs’ business model with it. Home values have dropped, new credit has dried up and membership sales have plummeted, leaving many of the clubs with more bills than income. Several have filed for bankruptcy. Some have asked members for special extra payments to help them survive. And others have made significant cuts in business expenses.
In late January, High Country Club, which was founded in 2005 and quickly grew to about 375 members, filed for Chapter 7 bankruptcy, listing hundreds of creditors and debt totaling about $25 million.
Smaller clubs, like the 140-member Portofino and the 150-member Lusso, with residences that averaged more than $3.5 million, also filed for bankruptcy last year. And the exclusive Yellowstone Club World, a collection of properties from Tim Blixseth, the developer of the elite Rocky Mountain ski and golf resort called the Yellowstone Club, never got off the ground.
Kasey D’Amato, a dermatology physician assistant from Los Angeles, who joined High Country Club last July, paid a $40,000 deposit and about $4,600 in annual dues in exchange for 19 nights of travel a year. She and her husband, Stephen, had two vacations planned — Easter weekend in Aspen and a May trip to the Turks and Caicos — when the club went under.
“They just canceled the reservations,” Ms. D’Amato said. Beyond the lost vacations, she added, “No one likes to lose that kind of money.”
So what exactly did these fools get for their money? The illusion of "owning" something and the future "promise" of a vacation?
A really quick calculation shows that these illusions are quite expensive.
Whether you're average Joe or a billionaire, there's only one "correct" way to do these things. Pay as you go. Get your money's worth NOW independent of whether you plan to spend $500 or $500K on a vacation.
Destination clubs came into their own five years ago, as a growing number of affluent travelers sought all the advantages of a fancy second home without the inconvenience of upkeep or the monotony of going back to the same place year after year.
For a one-time deposit of $40,000 to more than $1.5 million — depending on how luxurious the accommodations and how long the stay — and annual dues of $3,000 to $100,000, club members would have access to an array of multimillion-dollar properties in prime resort locations —a stone farmhouse in Tuscany, an oceanfront villa in Costa Rica, a slopeside chalet in Aspen, Colo. Before they arrived, the club’s concierge would have stocked the refrigerator with the family’s favorite foods, arranged airport transfers, booked tee times or made restaurant reservations.
And for a while, the clubs thrived. Many used the hefty deposits and readily available credit to start building their collection of properties. Then, taking advantage of rapidly rising real estate prices, particularly in luxury markets, the clubs used their newly grown equity to take on more debt and acquire more homes. That, in turn, allowed them to lure more members with an increasing portfolio of destinations.
But when the economy fell apart, it largely took the destination clubs’ business model with it. Home values have dropped, new credit has dried up and membership sales have plummeted, leaving many of the clubs with more bills than income. Several have filed for bankruptcy. Some have asked members for special extra payments to help them survive. And others have made significant cuts in business expenses.
In late January, High Country Club, which was founded in 2005 and quickly grew to about 375 members, filed for Chapter 7 bankruptcy, listing hundreds of creditors and debt totaling about $25 million.
Smaller clubs, like the 140-member Portofino and the 150-member Lusso, with residences that averaged more than $3.5 million, also filed for bankruptcy last year. And the exclusive Yellowstone Club World, a collection of properties from Tim Blixseth, the developer of the elite Rocky Mountain ski and golf resort called the Yellowstone Club, never got off the ground.
Kasey D’Amato, a dermatology physician assistant from Los Angeles, who joined High Country Club last July, paid a $40,000 deposit and about $4,600 in annual dues in exchange for 19 nights of travel a year. She and her husband, Stephen, had two vacations planned — Easter weekend in Aspen and a May trip to the Turks and Caicos — when the club went under.
“They just canceled the reservations,” Ms. D’Amato said. Beyond the lost vacations, she added, “No one likes to lose that kind of money.”
So what exactly did these fools get for their money? The illusion of "owning" something and the future "promise" of a vacation?
A really quick calculation shows that these illusions are quite expensive.
Whether you're average Joe or a billionaire, there's only one "correct" way to do these things. Pay as you go. Get your money's worth NOW independent of whether you plan to spend $500 or $500K on a vacation.
Friday, February 13, 2009
That Glitterin' Desert White Elephant
The New York Times reports: Laid-Off Foreigners Flee as Dubai Spirals Down.
Sofia, a 34-year-old Frenchwoman, moved here a year ago to take a job in advertising, so confident about Dubai’s fast-growing economy that she bought an apartment for almost $300,000 with a 15-year mortgage.
Now, like many of the foreign workers who make up 90 percent of the population here, she has been laid off and faces the prospect of being forced to leave this Persian Gulf city — or worse.
“I’m really scared of what could happen, because I bought property here,” said Sofia, who asked that her last name be withheld because she is still hunting for a new job. “If I can’t pay it off, I was told I could end up in debtors’ prison.”
With Dubai’s economy in free fall, newspapers have reported that more than 3,000 cars sit abandoned in the parking lot at the Dubai Airport, left by fleeing, debt-ridden foreigners (who could in fact be imprisoned if they failed to pay their bills). Some are said to have maxed-out credit cards inside and notes of apology taped to the windshield.
Some things are clear: real estate prices, which rose dramatically during Dubai’s six-year boom, have dropped 30 percent or more over the past two or three months in some parts of the city. Last week, Moody’s Investor’s Service announced that it might downgrade its ratings on six of Dubai’s most prominent state-owned companies, citing a deterioration in the economic outlook. So many used luxury cars are for sale , they are sometimes sold for 40 percent less than the asking price two months ago, car dealers say. Dubai’s roads, usually thick with traffic at this time of year, are now mostly clear.
For many foreigners, Dubai had seemed at first to be a refuge, relatively insulated from the panic that began hitting the rest of the world last autumn. The Persian Gulf is cushioned by vast oil and gas wealth, and some who lost jobs in New York and London began applying here.
But Dubai, unlike Abu Dhabi or nearby Qatar and Saudi Arabia, does not have its own oil, and had built its reputation on real estate, finance and tourism. Now, many expatriates here talk about Dubai as though it were a con game all along. Lurid rumors spread quickly: the Palm Jumeira, an artificial island that is one of this city’s trademark developments, is said to be sinking, and when you turn the faucets in the hotels built atop it, only cockroaches come out.
It should be reasonably obvious that you can't build an economy on RE and finance because that's a bit like saying you are going to build your economy on a Ponzi scheme. We all know how that works out.
You actually need to produce something the world wants. Tourism might be it but tourism is too dependent on disposable income (and loose credit = Ponzi) to run an economy off of.
Dubai is this cycle's Rockefeller Center and Pebble Beach all rolled into one. Since they have absolutely nothing to offer to the world, they are going to get annihilated economically.
Just like the seven-star Al Burj, Dubai is a seven-star fuck-up!
Sofia, a 34-year-old Frenchwoman, moved here a year ago to take a job in advertising, so confident about Dubai’s fast-growing economy that she bought an apartment for almost $300,000 with a 15-year mortgage.
Now, like many of the foreign workers who make up 90 percent of the population here, she has been laid off and faces the prospect of being forced to leave this Persian Gulf city — or worse.
“I’m really scared of what could happen, because I bought property here,” said Sofia, who asked that her last name be withheld because she is still hunting for a new job. “If I can’t pay it off, I was told I could end up in debtors’ prison.”
With Dubai’s economy in free fall, newspapers have reported that more than 3,000 cars sit abandoned in the parking lot at the Dubai Airport, left by fleeing, debt-ridden foreigners (who could in fact be imprisoned if they failed to pay their bills). Some are said to have maxed-out credit cards inside and notes of apology taped to the windshield.
Some things are clear: real estate prices, which rose dramatically during Dubai’s six-year boom, have dropped 30 percent or more over the past two or three months in some parts of the city. Last week, Moody’s Investor’s Service announced that it might downgrade its ratings on six of Dubai’s most prominent state-owned companies, citing a deterioration in the economic outlook. So many used luxury cars are for sale , they are sometimes sold for 40 percent less than the asking price two months ago, car dealers say. Dubai’s roads, usually thick with traffic at this time of year, are now mostly clear.
For many foreigners, Dubai had seemed at first to be a refuge, relatively insulated from the panic that began hitting the rest of the world last autumn. The Persian Gulf is cushioned by vast oil and gas wealth, and some who lost jobs in New York and London began applying here.
But Dubai, unlike Abu Dhabi or nearby Qatar and Saudi Arabia, does not have its own oil, and had built its reputation on real estate, finance and tourism. Now, many expatriates here talk about Dubai as though it were a con game all along. Lurid rumors spread quickly: the Palm Jumeira, an artificial island that is one of this city’s trademark developments, is said to be sinking, and when you turn the faucets in the hotels built atop it, only cockroaches come out.
It should be reasonably obvious that you can't build an economy on RE and finance because that's a bit like saying you are going to build your economy on a Ponzi scheme. We all know how that works out.
You actually need to produce something the world wants. Tourism might be it but tourism is too dependent on disposable income (and loose credit = Ponzi) to run an economy off of.
Dubai is this cycle's Rockefeller Center and Pebble Beach all rolled into one. Since they have absolutely nothing to offer to the world, they are going to get annihilated economically.
Just like the seven-star Al Burj, Dubai is a seven-star fuck-up!
That Japanese Obedience Clause
The Times Online reports: Panasonic orders staff to buy £1,000 in products.
Its electronic gadgetry is gathering dust on the shelves of high street stores, nobody is buying new fridges and the mountain of unsold plasma televisions is growing by the day.
However, in desperation, Panasonic has hit on the perfect counter-attack against the consumer slump: it has ordered every member of staff to go out and buy £1,000 of Panasonic products.
Large swathes of corporate Japan are expected to follow suit, either by directly commanding or indirectly “pressuring” employees to divert part of their salaries towards the goods that their employers produce.
Toyota has already tacitly applauded a “voluntary” scheme in which 2,200 of its top brass decided to buy new Toyota cars, and the president of Fujitsu recently e-mailed 100,000 staff and gently pointed out how nice it would be if “employee ownership rates” of Fujitsu PCs and mobile phones were a little higher.
A Panasonic spokesman said that because the “Buy Panasonic” request was made to management-level employees, the company did not expect refusal rates to be high.
The emergency directive, some Panasonic employees say, is a particularly cruel blow: the same 10,000 managers now being commanded to fork out for unwanted electronics were told two weeks ago that their salaries and bonuses would also be slashed.
Forcing your employees to snort your cocaine = FAIL.
Its electronic gadgetry is gathering dust on the shelves of high street stores, nobody is buying new fridges and the mountain of unsold plasma televisions is growing by the day.
However, in desperation, Panasonic has hit on the perfect counter-attack against the consumer slump: it has ordered every member of staff to go out and buy £1,000 of Panasonic products.
Large swathes of corporate Japan are expected to follow suit, either by directly commanding or indirectly “pressuring” employees to divert part of their salaries towards the goods that their employers produce.
Toyota has already tacitly applauded a “voluntary” scheme in which 2,200 of its top brass decided to buy new Toyota cars, and the president of Fujitsu recently e-mailed 100,000 staff and gently pointed out how nice it would be if “employee ownership rates” of Fujitsu PCs and mobile phones were a little higher.
A Panasonic spokesman said that because the “Buy Panasonic” request was made to management-level employees, the company did not expect refusal rates to be high.
The emergency directive, some Panasonic employees say, is a particularly cruel blow: the same 10,000 managers now being commanded to fork out for unwanted electronics were told two weeks ago that their salaries and bonuses would also be slashed.
Forcing your employees to snort your cocaine = FAIL.
Thursday, February 12, 2009
More Failure for the Candy-Crappin' Unicorn™
The New York Times reports: Metamorphosis at Caterpillar Over Jobs.
Another casualty of the stimulus package became apparent while we were waiting for the final language of the reconciled bill to appear online. It appears that Caterpillar won’t be hiring back any of those 22,000 laid-off workers because of the President’s $789 (Ed: sic) stimulus package, despite the fact that President Obama alluded to words by the company’s executive just earlier today touting the measure.
With the very familiar logo of Caterpillar looming around him at one of the company’s hard-hit plants in Peoria, Ill., President Obama publicly repeated the promise that Caterpillar’s chief executive officer, Jim Owens, might be able to rehire some of the people who were laid off — if the stimulus were passed.
But oops. After the president left, Mr. Owens not only did a turnabout on rehiring; he also suggested there may be even more layoffs. Although he said he continued to support the stimulus package, it wouldn’t result in a reversal of layoffs for anyone: “I think realistically no. The truth is we’re going to have more layoffs before we start hiring again.”
The Candy-Crappin' Unicorn™ has failed again!
Another casualty of the stimulus package became apparent while we were waiting for the final language of the reconciled bill to appear online. It appears that Caterpillar won’t be hiring back any of those 22,000 laid-off workers because of the President’s $789 (Ed: sic) stimulus package, despite the fact that President Obama alluded to words by the company’s executive just earlier today touting the measure.
With the very familiar logo of Caterpillar looming around him at one of the company’s hard-hit plants in Peoria, Ill., President Obama publicly repeated the promise that Caterpillar’s chief executive officer, Jim Owens, might be able to rehire some of the people who were laid off — if the stimulus were passed.
But oops. After the president left, Mr. Owens not only did a turnabout on rehiring; he also suggested there may be even more layoffs. Although he said he continued to support the stimulus package, it wouldn’t result in a reversal of layoffs for anyone: “I think realistically no. The truth is we’re going to have more layoffs before we start hiring again.”
The Candy-Crappin' Unicorn™ has failed again!
Bend Over Californicators, it's HICA time!
Bloomberg reports: California Lawmakers Reach ‘Framework’ on Budget Deal.
California Governor Arnold Schwarzenegger and legislative leaders are nearing an agreement to close a record budget deficit with tax and fee increases on items including gasoline and retail sales.
Under consideration are proposals to raise the state’s sales tax rate to 8.25 percent from 7.25 percent; increase the vehicle license fee to 1.15 percent from 0.65 percent of the value of the automobile; a 12-cent per-gallon excise tax on gasoline and a 0.25 percent surcharge on income taxes, according to a lawmaker briefed by party leaders who asked not to be identified because the presentation was confidential.
Raising taxes during a depression. That should work out well!
California Governor Arnold Schwarzenegger and legislative leaders are nearing an agreement to close a record budget deficit with tax and fee increases on items including gasoline and retail sales.
Under consideration are proposals to raise the state’s sales tax rate to 8.25 percent from 7.25 percent; increase the vehicle license fee to 1.15 percent from 0.65 percent of the value of the automobile; a 12-cent per-gallon excise tax on gasoline and a 0.25 percent surcharge on income taxes, according to a lawmaker briefed by party leaders who asked not to be identified because the presentation was confidential.
Raising taxes during a depression. That should work out well!
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