Did the Mossad assassinate a top Hamas military commander in Dubai?
The Dubai government thinks so, the Israeli government isn’t saying.
Did Fatah provide logistical support to the Israelis?
Hamas thinks so.
Did Hamas get infiltrated by the Israelis so as to make the assassination easier?
Fatah thinks so.
“Is all this brouhaha yet another demonstration that nobody on either side is serious about peace?”
Gorilla thinks so.
Why, the name of the world’s tallest office building:
A neck craining nod from Dubai to its big brother in Abu Dhabi!
According to Gorilla, this has not gone unnoticed on Maiden Lane: “Architects have already been commissioned for the Fed Fannie!”
Who knew? Not the banks backing indoor ski slopes in Dubai!
Turns out the non-sovereign debt of Dubai won’t be guaranteed, a blow to those who naturally assumed from their experience in other badly indebted nations (USA, Ireland) that the government would come riding to the rescue!
So, Dubai’s a good lesson for some investors and banks, and yet another unlearned example of what happens when banks get too large to succeed and too large to fail.
Will this effect the dollar carry trade investments in emerging markets? Probably not, since no one in the world of financial services appears to understand the definition of risk.
Gorilla says: “Mohawk or pompadour, the haircuts will keep coming!”
These were the events in Gorilla’s world that mattered this week:
Climate Change: Another week of faintly ridiculous posturing. The President proposes a pollution reduction he hasn’t got the votes for, while the Chinese advance a crafty formula that won’t cut pollution at all. There just isn’t the political will anywhere to do something about a problem that’s not coming around the corner for a couple of decades. Gorilla thinks there will be progress only when progress is necessary, roughly sometime after 2030.
Economy: The economy’s anemic growth continues. While there was good news in the form of reduced unemployment claims, the fact remains that unemployment will remain sky high until the economy grows a lot more than 2%. Gorilla still believes it will take a decade to get unemployment down below 7%.
Iraq: Stalled out on its way to an election in January. The underlying differences among Sunnis, Shiites, and Kurds have not been addressed, but for the US that’s no longer a problem. Gorilla suggests we’ll be out as planned by 2011, and Iraq will start the next round of civil war in 2012.
Iran: Still lots of posturing, but the outlines of a deal are in sight. This will be some combination of inspections in Iran and the Russians helping out with nuclear technology. The Israelis will not be happy, but will not do anything. Why the US is not seizing the opportunity to make a buck on developing Iran’s nuclear industry, a la India, remains a mystery. Gorilla says a deal will be completed in 2010, and Obama will visit Iran in 2013.
Dubai: Real estate bubbles don’t work any better in the Middle East than they do in the US. Perhaps this time the creditors will actually take a haircut. Gorilla puts forth the theory that creditors may use this default to get more guarantees from the government, particularly with massive CRE losses on the horizon and another round of the residential housing bust occurring simultaneously. Spoons therefore should be locked away.
Thanksgiving: Americans have little to be thankful for in terms of political leadership, but Gorilla observes that fecklessness is next to bloggedness in the world he inhabits.
Do buy, or not Dubai, that is the question!
Seems Dubai is about to default on a loan payment, causing markets worldwide to get very nervous.
After all, the dollar carry trade bubble depends on borrowing cheap dollars and buying better yielding securities, commodities, and the debts of countries like Dubai.
And of course the usual suspects are pissing away billions: Citibank is one of Dubai’s big lenders!
Could be just a small hiccup, or a larger belching out by the woefully under-regulated financial services industry.
Wall Street no doubt will tell its US Treasury and Fed subsidiaries to chill out.
Gorilla asks: “Is this the sheikh out I’ve been expecting?”
