Thread: Stocks slump, I missed it.?

This really pisses me off because I just dumped a SHITLOAD of HK stocks that hit an alltime high planning to pick them up again on the slump, but in fact, despite this BS there wasn't.
Actually there always is, as long as it's before dividends payment time.

Asian shares slumped on Friday and government bond prices jumped as fears that Dubai could default on its debt gripped investors.


By Louise Armitstead
Published: 6:24AM GMT 27 Nov 2009

A metro train passes by Jumairah Lake Towers in Dubai. Investors are worried that the state could default on its debt Photo: AP Photo/Kamran Jebreili)


Markets across the world have been rattled since Dubai World, the government investment company behind some of the emirate's most ambitious projects, said on Wednesday it was seeking to delay repayment on a tranche of its debt.
Japan's Nikkei 225 was down more than 3pc in Tokyo, and the main stock indices were also weaker in Australia, Hong Kong and Vietnam. By contrast, prices for US government bonds climbed.


Traders feared that the request for a six-month standstill was a sign that the Dubai Government was struggling with its other debts – and that the full impact of the financial crisis globally may not yet be over.
The company has $60bn (£35.9bn) of liabilities from its various companies including Nakheel, the property firm behind the Palm Jumeirah, the world's biggest artificial island, and the Nakheel Tower, the world's tallest building at 1km high.
It also owns DP World, the ports operator that bought P&O Ferries. Nakheel is due to make a $3.52bn Islamic bond repayment, plus charges, on December 14. The company also unveiled a restructuring programme, to be headed by Aidan Birkett, Deloitte's managing partner for corporate finance.
The Dubai situation signifies that although the major central banks around the world have stabilised the financial system, they can’t make all the excesses simply disappear," Arnab Das of Roubini Global Economics told Bloomberg. " We still have to work out those balance sheet stresses. The recovery is proceeding, but significant challenges still lie ahead.”
Dubai has been among the most dramatic victims of the credit crunch, with property prices halving from their highs in September 2008, leaving a huge overhang of debt. Dubai borrowed $80bn in a four-year construction spree designed to turn its economy into a Middle Eastern powerhouse of finance and tourism.
The FTSE 100 on Friday suffered its worst one-day fall since March closing down 3.2pc. Companies with big Middle Eastern shareholders led the rout, on the back of concerns that the high-rolling emirate would be forced to sell stakes to raise capital. Barclays Bank tumbled 7.9pc and the London Stock Exchange fell 7.4pc.
There were similar scenes across European stock markets with the French CAC-40 down 3.4pc and the German DAX index down 3.3pc. In America, markets were closed for the Thanksgiving holiday, but electronic trading of the benchmark S&P 500 equity futures contract showed a potential drop on Wall Street of 2.2pc.
British bank stocks, that are among the most exposed in the world to the Middle East, were hard-hit. Royal Bank of Scotland slumped 7.75pc, Lloyds Banking Group lost 5.75pc and HSBC fell 4.4pc – all three are among nine banks who were bookrunners on an outstanding $5.5bn syndicated loan to Dubai World in June 2008.
HSBC's interim accounts showed that the bank had a $15.9bn exposure to the whole of the United Arab Emirates.
The concerns for UK banks also hit sterling, which fell to its weakest point in a month against the euro and a basket of currencies, while gilt futures leapt to a six-week high, propelled by renewed fears about credit quality.
Property shares fell sharply amid concerns of a fire sale of Dubai's UK assets, which include the Grand Buildings in London. Dubai has also been a major buyer of UK property.
Land Securities and British Land both shed over 3pc. Similarly construction companies were down including Balfour Beatty and WS Atkins, who are involved in key projects in the Middle East, including the Dubai Metro.
The confidence in emerging markets was hit. Analysts at Merrill Lynch said: "The risk of corporate default in Dubai clearly shows that contagion risks have not disappeared and that perhaps the market has turned a little complacent about risk.

Anhd this 'news' has been doing the rounds for a year.

No pal - there's no BS to any of it. Only an idiot would still be in the market. Anyone with an iota of common sense would understand that corporate media like CNBC, WSJ, FT and others try to control the agenda and direction of demand-sentiment - they are in a phrase - the snake oil salesmen (sorry - and women) of the 21st century. But keep believing it if you like. What happend to common sense? If I told you I could take you in my tuk-tuk to see 'sexy lady' would you pay me?

The future is black my friend. the future is bleak. And the 30-somethings who went to University of Chicago to learn the shit preached by their guru Milton Friedman are smelling shit for the first time. Ooohh 'how revolting' what's that? (great photo in that news report too.)

• NOVEMBER 28, 2009

Dubai Jitters Infect Debt of Sovereign Spendthrifts



By NEIL SHAH and CHIP CUMMINS

LONDON -- Dubai's debt debacle is stoking a new fear for investors across the globe: potential government default by heavily indebted nations.
The Dubai government roiled markets this week with its move to delay debt payments owed by its flagship holding company, Dubai World. The company is stressed by tens of billions in debt that funded spending on glitzy real-estate projects from the Middle East to Las Vegas.
View Full Image



Reuters A fly-over stands unfinished next to a construction sites in Dubai's Marina area, November 28, 2009.


On Fay, investors feared Dubai's move would plunge global financial markets into the kind of chaos seen earlier this year. But while Asia suffered heavy losses, markets regained their poise as the European and U.S. trading day progressed. By late Friday, European stocks finished 1.2% higher, while in the U.S., the Dow Jones Industrial Average closed down 154.48 points, or 1.5%, at 10309.92.



Deeper stress lines were felt in the sovereign-bond market, where the cost of insuring against defaults in places like Hungary, Turkey, Bulgaria, Brazil, Mexico and Russia rose, fueled by concerns that emerging-market nations may have trouble honoring their debts even as the economy heals. The worry is that sovereign debt may now represent another aftershock of the global financial crisis.
"First, people were worried about mortgage debtors. Then, highly leveraged banks. Now the ball has rolled all the way to Dubai," says Mattias Westman, chief executive of Prosperity Capital Management, which has about $3.5 billion under management, almost all of it in Russia. "It's just a lack of confidence in debtors."
The price of a $3.5 billion sukuk, or Islamic bond, issued by a subsidiary of Dubai World, plunged to 57 cents on the dollar Friday from 110 cents on Wednesday, according to two investors.
Dubai's troubles resonate far beyond the desert fantasyland that its borrowing created, fueling concerns that financially stretched nations like Greece and Hungary may struggle to pay off debts.
Investors and analysts say they're worried about the health of Greece's heavily indebted economy and banks, which could suffer as the European Central Bank moves to pull away some of its financial-support measures. These measures have included ultra-cheap bank funding.
The gap between the yield on a Greek government bond and relatively-safe German debt -- a key gauge of market fear -- jumped to a peak of 2.2% Friday, before falling slightly. When the pan-European Stoxx 600 index fell 3.3% on Thursday, Greece's market fell twice that amount, over 6%.
European Pressphoto Agency Work went on at a construction site Friday in Dubai, as pressure rose for the U.A.E. government to step in with more support for the city-state.



Sovereign-Debt Shake-Up

Click to enlarge graphic.



Dubai's debt restructuring drove up the cost of insuring against default in other countries as well


Another window into the growing concern about government creditworthiness is the credit-derivatives market. Investors are now paying much higher prices to insure themselves against bond defaults in countries like Turkey and Bulgaria.
When Dubai announced its debt standstill on Wednesday, the cost of insuring against a Dubai debt default more than doubled. The cost of debt-default insurance also rose for a range of countries, including Hungary, Brazil, Mexico and Russia.
While the cost of debt insurance for stressed countries hasn't hit levels seen at the height of the financial crisis, "the recent rises are altogether more sinister in our view, as they reflect genuine concerns about default within the euro-zone," said Steven Barrow, a currency analyst at Standard Bank in London, in a note Friday.
Dubai itself demonstrates how quickly countries can veer off the road to recovery and into trouble.
Dubai's surprise move to delay the debt payments of its corporate crown jewel, Dubai World, came just as many economic indicators, and anecdotal evidence, were pointing in a positive direction. Among the optimistic signs for the region: Oil prices have rebounded strongly this year after falling sharply during the global financial crisis. On Friday, oil sank 2.5% to $76.05 a barrel on the New York Mercantile Exchange as investors fretted over the impact of the Dubai debacle on the economic recovery, but that's still up significantly from its lows earlier this year.
At the same time, though, years of lavish, debt-fueled empire building is now coming home to roost. For years, the city-state was the epicenter of a dizzying boom in the Persian Gulf. Its ambitions also extended abroad: to golf courses in Scotland and South Africa; the Barneys department store chain in New York; and real estate in Las Vegas, where in 2007 it joined up with casino company MGM Mirage to develop an $8.5 billion condo, hotel and retail colossus called CityCenter -- just as the Vegas real-estate market reached its peak.
The oil-fired investment and spending binge culminated in 2008 when crude hit more than $140 a barrel. But by the time of Dubai's biggest bash later that year -- a $20-million hotel opening on a man-made palm-shaped island developed by Dubai World's property subsidiary -- the global financial crisis was already washing ashore.
Since then, it has been a steady slide toward Wednesday's debt standstill. Squeezed by frozen credit, international property speculators bowed out of Dubai's market. Prices started a year-long, steep descent. Government-controlled and private developers postponed or cancelled projects, shed workers and stopped paying bills.
According to the Association for Consultancy and Engineering, a trade group of British builders, Dubai entities owe as much as £200 million to British contractors alone.
Analysts expect Dubai's core property market to take years to claw back to 2008 levels.
Even after hundreds of projects were cancelled or postponed this year, new construction is expected to double Dubai's supply of office space by 2011, according to property consultancy Colliers International. In a sample study, the consultancy found office-occupancy rates in recently finished buildings at just 41%. At the end of the third quarter, prices of office space were down by 58% from a year ago.
Still, international bankers and executives had started pointing to anecdotal evidence of recovery before the standstill announcement. "You see 'for rent' signs on every building," says Ziad Makhzoumi, chief financial officer of Arabtec Holding PJSC, one of the Mideast's biggest construction companies. "But you don't see them on every floor."
—Andrew Critchlow and Oliver Klaus contributed to this article Write to Neil Shah at neil.shah[at]dowjones.com and Chip Cummins at chip.cummins[at]wsj.

Dubai Jitters Infect Debt of Sovereign Spendthrifts - WSJ.com