Home Thoughts From Dubai

Tip when visiting/moving to Dubai:

The recent appreciation of the US$ has made travelling to Dubai more expensive. However hotel prices and cost of living are starting to adjust and offset these costs.

Reflections from the week:

Well our boy did it. They said it could NOT happen. A BLACK man. A man born in Kenya. A man raised by a MUSLIM family in Indonesia. How could the UNITED STATES of AMERICA vote such a person as their president. Well thankfully America has, on this occasion, showed that it is still capable of making some good ‘calls’. And by a nice landslide. But I think the Republicans gave the presidency to him in that America was not ready for a ‘Barbie and Grandfather’ show. McCain was getting older by the minute, Now we must wait and see how Barack Obama’s thoughts and actions are likely to impact on the rest of the world. The Middle East, Israel, Russia and the new Cold War, Afghanistan, Iran, Healthcare, Oil company profits,Budgetry policies, International Trade, taxation of US companies overseas, domestic taxation policies etc etc. I could not but feel as I saw this fresh faced charismatic new president make his suitably humble and dignified victory speech that he may not make it to his January inauguration. And if he does survive long into his 4 year term, will that youthful face age at the pace as that of Tony Blair’s. Anyhow he is now the 44th (we should play a game some week to see how many you can remember) US president and the country can now rid itself and the rest of the world of the most embarrassing ‘global terrorist’ ever to walk across the threshold of the White House. Goodbye to Goofy Bush and his circus of clowns.

Did you know however that he was recently only voted the 37th worst president (17 worse than his dad) of the US. Who, I hear you scream could possibly be worse. And to think that the Panel believed there were FIVE worse than the ‘guy exiting town’. Well there was Richard Nixon – a bit unfair I think – and then some relative unknowns. Among them a drunk (Franklin Pierce 1853-57), William Harrison (who died after just 32 days in office in 1841) Martin van Buren (1837-41 who brutally enforced the Indian Removal Act) and James Buchanan (1857-61) who by the time he left office had a deeply split Democratic Party, SEVEN States had left the Confederacy and the country was involved in a war that was to result in the loss of tens of thousands of lives. OK, I suppose HE does deserve the wooden spoon. But I suppose it should not surprise me that America should have such guys are their Leaders. But with Obama being elected I have another of my 2008 predictions ‘in the bag’. I just hope my connected prediction does NOT happen.

But this week I did received the following text. ‘St Peter is at the pearly gates checking in the various souls in line for heaven. As he looks at the next in line he says ‘and who are you and what did you do on earth ?’. ‘I am Barack Obama and I was the first black man to be voted president of the United States of America’ replies the hopeful. St Peter says ‘the USA ? A black president ? You are bullshitting me. When did THAT happen ?’. Obama replies ‘about 20 minutes ago’ !! So hopefully not.

It will be a little uncomfortable for the new president to see a growing number of Middle Eastern States ‘cozying’ up to Iran. I mean if there is one man less worthy of being supplied oxygen than the exiting US President, it is the Iranian incumbent. The man who in other parts of the world would be receiving psychiatric help, President Ahmadinejad was photographed signing a new understanding/accord with the UAE. Despite historical tribal, cultural and territorial/border differences some Mother Teresa was able to bring these two ‘enemies’ together.

And now there is a piece of paper that confirms this new friendship. Another ‘new friend’ of the UAE is one of Britain’s best known names. Well ‘corporate’ names. Barclays Bank. The bank, desperate not to have to account to the British Government, and to preserve its rights to pay over-generous executive share options and bonuses, was prepared to play prostitute. Name your price appears to have been price on its ‘for sale’ file. And so the great Sheikhs Khalid (Bob) Diamond and Mohammad (John) Varley threw on their ‘kandura’s’ and delivered another Western Brand into the hands of ‘Mansour of Arabia’. The investment was made cheaper not just by recent weakness in the Barclays share price (the Chinese and Singaporean’s had paid Sterling 7.20 for each Barclays share just 9 months ago – Sheikh Mansour is paying just 1.90 pounds for each share on a fully priced basis) a but by the recent pitiful fall in the value of Sterling. A real rape but some well spent money by the UAE. Well done to the al Nahyan family – whose personal wealth is estimated to be equivalent to 40% of the GDP of the United Kingdom. History will confirm this as one of the ‘best value buys of the 2008 credit crisis’.

Not stooping to the same level of desperation was Gordon Brown – the UK Prime Minister (for the moment). It would have been difficult to find an appropriately sized Kandura but his ‘begging bowl’ was everything you would expect from a man who thinks a ‘treadmill’ is something that should be ‘council-taxed’. He bumbled his way through the Region hoping to win financial support for the West. His ‘social awkwardness’ is really embarrassing. An embarrassment equivalent to seeing your mother doing a striptease at your 40th birthday party. He really needs to be taken off the world’s political stage. I wonder if we could get ‘those people’ who are planning an ‘early exit’ for Barack, could be encouraged to give a price ‘for two’ !! In all the tv footage covering the visit you will notice all the wonderful courtesies and smiles of ‘the hosts’. Many who have had trade/business dealings with the Region will tell you that the larger the smile or greeting, the less chance you have of getting what you came for.

Does anybody know a Danny Cipriani. No, he does not owe me money. Just he is a guy who apparently knows his way around a rugby ball and has become the latest ‘celebrity’ to fall in love with Dubai. His girlfriend is Kelly Brook – I am not sure that I would ‘advertise’ that, is she not the one who has some ‘significant mileage’ under her skirt ?? – and he was in Dubai without her. Good decision !!!

I hear that Tom Jones , after a lifetime of philandering, has written a song for his long suffering wife with the ‘touching’ words ‘the road always returns to you’. What a class act. With that sense of ‘romance’ and ability to use the right words for the right occasion, he should have taken up song writing earlier !!! Maybe he should have included the line ‘I am almost 70 and need a carer, not a lover. Tom remember the ‘Green green grass of Home’. Should you just not release THAT one !!!

Now let’s get less serious. Well kinda. Surely the owners of the Dubai Mall were not being serious. They were to open (the Mall) to the public last week. But then somebody suggested that having scaffolding, crane’s and workmen lying around the public area, would probably concern any visitors – not to talk about appropriate health and safety considerations. But then in this Region it is more important that ‘face is saved’ than the loss of a life or arm or eyesight, resulting from a ‘bolt or two’ falling from some of the construction equipment that has not been moved from the site. There is not much value put on ‘foreign lives’ in the GCC. But some sense prevailed and the official opening was deferred for THREE days. Just enough time to put some ‘covers’ over the ‘offending equipment’ !! But the worlds largest shopping mall did open on Tuesday. Internal floor space of 5.9 million sq ft, 1,200 shops, 160 restaurants, an aquarium (33,000 fish including 400 sharks) and much more.

Only a week ago London (well Westfield to be precise) opened Europe’s largest Urban Mall. With 265 shops the scale of the Mall is best confirmed by the fact it 9 postcodes and 43 acres – 1.72 million sq ft. Two people who will not be visiting the new London (or Dubai) Malls’ are our two ‘sex on the beach’ couple. Just days after they had been sentenced to 3 months in prison (which is under appeal) the prosecutor has also appealed. Yes this is part of the ‘system’ in Dubai. If the prosecuting lawyer feels the judge was too lenient, HE can APPEAL. He wants them to spend 12 months in prison. What a cruel bastard. And not great news for Dubai. But then again maybe Dubai is no longer interested in its international image/perception.

If this is the case why are Emirates buying so many aircraft and why will Dubai have two airports with an annual handling capacity of 210 million people – nearly three times that of London Heathrow. There could be a lot of spare capacity if Dubai does not get its ‘balance’ right. While I under NO circumstances condone ‘the tramp’ at the centre of the event, I believe that there is a better/gentler way of getting the message spread to people with uncontrolled levels of testosterone/hormones.

Two other people who won’t be having sex – even though the law would allow them - in the future are Simon (S)Cowell and his girlfriend of 6 years, Terri Seymour. With all his famous characteristic chivalry his response to a journalist who asked what his response was to his girlfriend leaving him (for 35 year old Hollywood actor), was ‘Thank God she finally got the point’ and he was ‘enormously relieved, and could breath again’ !!! Be careful Simon. Have you not heard of the legendary creativeness of women when scorned. I hope she has no naked pictures of you. Or worse still video’s. With that type of material she would probably make a nice ‘lifestyle’ selling this material to some ‘Horror Channel’. I mean there are some parts of the body that you cannot ‘groom’ and will give away your age. But on the eligibility front you are OK. There are plenty of women out there who love BASTARDS.

One of these girls is ex UK Prime Minister John Majors daughter in law – Emma Noble (who was married to James Major). Now there is an equal ‘package of complication’. But Terri if you want to visit Dubai, I have just renewed my Burj al Arab membership, and we can work out together. A 50% increase on the previous years ‘fare’. But then as my Indian friends say ‘wot tu du’. The ‘hardship’ stories would spread too rapidly, if it was thought that your bank account could not accommodate the increase.

Many of you wrote to me last week surprised that being a public or civil servant was not in the top 5 ‘least stressful jobs’. Well I need to highlight that this survey was a UK survey. And could not in any way reflect what is the case in other major economic powers. There are enough global political figures on ‘death row’ without me assassinating a section of my loyal readers. So I am afraid that I will under NO circumstances condone or entertain such thoughts or suggestions. Unless of course you mean the Political Leadership – who harass and unfairly treat our public and civil servants.

The new Bond movie, Quantum of Solace, was released, and premiered in Dubai, this week. While the residents in Dubai will be deprived of some of the ‘juicier moments’ in the movie, is Olga Kurylenko not one of the most beautiful Bond girls ever. Sadly because she is a ‘goody’ in the movie and has to kill some Russian’s (all paid actors who go home after being ‘killed’), she is being condemned as a traitor in her native Ukraine. She has even had death threats. Poor Olga. It does put the ‘credit crisis’, ‘Sterling capitulation’, ‘global depression’ and ‘wealth destruction’ into a more tolerable light !!!

Finally the Dubai police are going ‘undercover’ in an attempt to once and for all to cure the epidemic of reckless driving in the Emirate. Reckless and dangerous driving will now attract 12 ‘black points’ (24 and you are out) and your car will be confiscated for 30 days. Good for you Brigadier al Zafein. Finally finally for all of you who have promoted India as an exciting investment region, you might now want to apologise. Our ‘friends’ Larionovo gave us an example of the dangers/risks last week. But a plague of bombings, credit defaults, political corruption and a country held together with weakening cello-tape, makes this one of the MOST stay-away investment regions of the world. To do otherwise is investment-suicide.

Property corner:

Last week I for the FIRST time since April 2007 (have a look in the archives) I gave you an investment proposal where I was unconditionally positive about the investment opportunity in Palm Jebel Ali. I have been exceptionally cautious about what has been happening the Dubai property market over the past 12 months – particularly when prices started to push through AED 3,000 per sq ft (residential). The ‘adjustment’, assisted by global economic turbulence, is now three months into its life. And many people, again as predicted, have realised that ‘escaping ‘ is difficult if not impossible. The Palm Jebel Ali recommendation was made with all this knowledge factored in. We will look back on this phase of the Dubai property adjustment and, for those who do not take the opportunity, regret our intransigence. This opportunity is equivalent to the house next door to you becoming available at 40% of what it was three months ago. OK, possible. But you would probably attempt to buy it. The returns that I expect from Palm Jebel Ali are comfortably in excess of 50% - over a 6/9 month basis. Probably more than that. Please keep a copy of this recommendation, and hold for proof of the prediction. A ONE OFF.

Pig Corner:

This corner is going to get very boring over the next few months. There are just too many PIGS in the Region that I cannot possibly cover them all. This week I want to alert you to the growing number of Funds being issued. In virtually all the cases I have seen ‘the product/property’ being put into the Funds are properties that are ‘under water’. So Developers in a desperate drive for cash to develop out their projects are wrapping the projects in ‘different paper’. Do NOT be duped. What is ’inside’ is exactly the same as what you would NOT have bought direct from the Developer – except that there are a load of extra professional fees that need to be accommodated. Be particularly careful of anything in Dubailand and Dubai Waterfront – where prices have collapsed. This week I was ‘pitched’ 5 such Funds. All appalling attempts to get their companies out of jail.

Fun corner:

A married couple was in a terrible accident where the man’s face was severely burned. The doctor told the husband that they couldn’t graft any skin from his body. Because he was too skinny. So the wife offered to donate some of her own skin. However, the only skin on her body that the doctor felt was suitable would have to come from her buttocks. The husband and wife agreed that they would tell no one about where the skin came from, and they requested that the doctor also honor their secret. After all, this was a very delicate matter. After the surgery was completed, everyone was astounded at the man’s new face. He looked more handsome than he ever had before! All his friends and relatives just went on and on about his youthful beauty! One day, he was alone with his wife, and he was overcome with emotion at her sacrifice. He said, ‘Dear, I just want to thank you for everything you did for me. How can I possibly repay you?’ ‘My darling,’ she replied, ‘I get all the thanks and reward I need every time I see your mother kiss you on the cheek.’

An old one but good one. If you are a guy !!! Husband and wife are shopping in Tesco’s when the man picks up a crate of Stella and sticks them into the trolley ‘What do you think you’re doing?’ asks the wife ‘They’re on offer, only £10 for 24 cans’, he says ‘Put them back. We can’t afford it,’ says the wife and they carry on shopping… A few aisles later the woman picks up a £20 jar of face cream and sticks it into the trolley. ‘What do you think you’re doing?’ asks the man, ‘It’s my face cream. It makes me look beautiful,’ she says. The man replies… ’so does 24 cans of Stella and it’s half the f *** ing price!!’

These are genuine clips from British Council flat tenants complaining to their Councils about problems with their flats. They walk amongst us!

1.  My bush is really overgrown round the front and my back passage has fungus growing in it.
 
2.  He’s got this huge tool that vibrates the whole house and I just can’t take it anymore.
 
3.  It’s the dog’s mess that I find hard to swallow.
 
4.  I want to complain about the farmer across the road; every morning at 6 a.m.  his cock wakes me up and it’s now getting too much for me.

5.  I am a single woman living in a downstairs flat and would you please do something about the noise made by the man on top of me every night.
 
6.  My neighbour’s 18-year-old son is continually banging his balls against my fence.

7.  Please send a man with the right tool to finish the job and satisfy my wife.

8.  My lavatory seat is cracked, where do I stand?

9.  I am writing on behalf of my sink, which is coming away from the wall.
 
10.  Will you please send someone to mend the garden path?  My wife tripped and fell on it yesterday and now she is pregnant.

11.  I request permission to remove my drawers in the kitchen

12.  50% of the walls are damp, 50% have crumbling plaster and 50% are plain filthy.

13.  The toilet is blocked and we cannot bathe the children until it is cleared.

14.  I want some repairs done to my cooker as it has backfired and burnt my knob off.

17.  The man next door has a large erection in the back garden, which is unsightly and dangerous.

18.  Our kitchen floor is damp.  We have two children and would like a third so please send someone round to do something about it.

19.  I wish to complain that my father hurt his ankle very badly when he put his foot in the hole in his back passage.

20.  I wish to report that tiles are missing from the outside toilet roof.  I think it was bad wind the other night that blew them off
 

 

Currency corner:

The currency story of the week is the spanking the Aussie $. When the Aussie Fed reduced interest rates by 75 basis points. In a week when most countries around the world reduced its rates it was probably unfair treatment. Particularly given that Sterling did not get too damaged out of its surprise 150 basis point reduction. Even the Eurozone got a 0.50% reduction. The only issue with the Aussie move was that they moved first. At one stage falling to ‘666’ against the US currency. With IMF predictions of economic gloom around the world you can expect further reductions, but I guess currency movements will become less interest rate driven and more focussed on each countries economic outlook. I expect the Euro to weaken further against the $ - as the relative fortunes of each economy becomes more evident. Under Barack Obama’s stewardship I expect a stronger USA. Albeit it will be slow. Sterling is getting a fair response to its economic problems – again predicted by Home Thoughts. With a 1.5% GDP contraction expected next year, further weakness is likely. But a lot of bad news is already in the price.

Equity corner:

What a difference a week makes. Last week there were some tentative signs that the nauseating downward movements in daily equity prices were slowing. The nose-bleeding was, however tentatively, less ‘of the fatal style’. And so we entered this week with two positive days. And then ? Well the nose bleeds started again. The world really needs two weeks of stable equity prices before it can start to build again. There has been an estimated $ 20 trillion (that’s 12 zero’s) of wealth destroyed around the world. Is it any wonder we have the current global banking and investor inertia. But rebuilding confidence will become increasingly difficult if we cannot get calm in the worlds ATM – the equity market’s. Equity markets are, apart from cash deposits/gilts, the most price transparent and liquid asset class. Hence volatility is somewhat inevitable as people around the world require cash urgently. Ask any Hedge Fund or Investment Manager. The level of ‘encashments’ is largely responsible for these Funds having to liquidate equity positions. In the last 48 hours the Dow Jones has fallen 9%. That is an annualised rate of 1,147% (on the basis of ‘trading days’). This has only happened three times before. You guess it. 1929, 1931 and 1987. But I still believe we are at the end of the worst.

There is a lot of bad news in current equity prices. So stick with some of the strong balance sheet and high/safe dividend companies. They will ultimately deliver you handsome profits. Last week I told you to take profits. This week I think the BP share price is worth a ‘re-look’. Nice dividend and despite the oil price is still safe. I also like BT at current price (1.13 Pounds Sterling). It got hammered this week. Poor results. But it was more a cost than revenue problem. Costs can be more easily corrected. So worth a buy on a 2 month basis.