Yesterday, I commented on how we were getting a demo on how some of the money being spent on oil was coming home and speculating on the real estate market. As insightful as that was, it looks like the downturn in the Dubai real estate market is going to dwarf the rollbacks in US cities. It was all new construction and it was all speculative.
I’d heard about it – that giant hotel with Agassi and Federer playing tennis on the helipad, the peninsula shaped to look like a palm tree – it never made much sense to me, but what do I know?
According to Boing Boing, “Dubai airport (is) clogged with cars abandoned by fleeing construction workers.”
It appears there are more indications that the tail end of the expansion of the global real estate bubble may have been fueled by the late surge in oil prices that started accelerating in late 2007.
The NY Times had a grim report last week, “Laid-Off Foreigners Flee as Dubai Spirals Down.”
Boing Boing is also saying that “People are pouring out of Dubai.”
The resultant re-injection of freshly leveraged capital may have perpetuated the illusion of ever increasing M3 capital liquidity. Like a twisted social construct of cold fusion, only our feedback loop dropped when China stopped getting ready for the Olympics.
I’m still pretty sure this theory can be disproved.
QuantumTom 