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Monday, November 30, 2009

Dubai's Dead Cat Bounce

It seems that the fear and panic, that the media would have us believe was going to envelop the world this week (when the Dubai markets opened again) hasn't happened yet.

Markets across Europe and Asia have in fact rebounded today.

The intervention by the Central Bank of the United Arab Emirates, to provide an emergency liquidity facility for local lenders, seems to have calmed everyone's jittery nerves for the time being.

As to whether this is will prove to be only a dead cat bounce, remains to be seen.

Seemingly the authorities in Dubai have been tring to remove newspapers, that discuss the crisis, from newsagents. A heavy handed and idiotic attempt to shore up public sentiment, it will backfire.

Either the economy is in good shape, or it isn't.

You can't eat sand, nor should you waste money buidling houses on it.

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