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Dubai gets $10 billion injection

  
Analysis, Economy, Education, LINKS
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burj-al-arab-dubai-hotel-sail-arab-emirates

DUBAI — Dubai said Monday that it has received $10 billion in financing from Abu Dhabi, which will pay part of the debt held by conglomerate Dubai World and its property unit Nakheel.

Out of this, $4.1 billion will be used to repay Nakheel’s Islamic bond, or sukuk, that matures Monday. The remainder of the funds will be used to finance Dubai World’s needs up until the end of April 2010.

“We are here today to reassure investors, financial and trade creditors, employees, and our citizens that our government will act at all times in accordance with market principles and internationally accepted business practices,” Sheikh Ahmed bin Saaed al-Maktoum said in a statement.

Dubai rocked world markets in late November when it requested a freeze on debt payments by Dubai World in order to restructure the conglomerate. Nakheel’s bond had been seen by many as a litmus test for Dubai’s ability to repay more than $80 billion of government and corporate debt.

“I think Abu Dhabi saw the adverse market reaction to Nakheel debt restructuring news play out over several days and perhaps decided they had seen enough,” said Saud Masud, senior real estate analyst at UBS AG.

Expectations that Nakheel could reach a positive outcome helped boost shares in Dubai on Sunday. The Dubai Financial Market’s main index closed up 3.3% at 1695.35, extending Thursday’s 7% rally. However, the benchmark is still down about 19% since Dubai World requested the debt freeze.

“This is very positive news, and will be welcomed relief to bondholders in particular. We are expecting a strong positive reaction to U.A.E. and regional markets,” said Ali Khan, managing director at Arqaam Capital. “Details yet to emerge, however headline is very positive.”

In its statement, Dubai said it will focus on addressing the concerns of Dubai World’s creditors and will start discussions with creditors and contractors shortly.

Why 95% fail

  
  Education
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When setting a grand goal, (such as total financial freedom via trading world markets) we are mentally prepared at the outset to encounter some kind of difficulty. When we get to it, it can psychologically look something like this:


A large barrier blocks the way to our goal, yet we KNOW that the realization of our goal lies somewhere on the other side if we can surmount this obstacle. With great efforts then we focus our attention and do the necessary work to get over it.

Yet what we then find is another obstacle; the next block. At this, a small percentage might become discouraged and quit, but others tackle this new obstacle with the same determination that they did on the last one. The problem lies in our inability to consider the enormity of the task at hand. If we could look around the wall to see forwards in time, we may see something like this:


If we had the benefit of such insight we might be able to accurately guess at just how far we had to go and how many more difficulties we have to get over, but we don’t. At each wall, a tiny percentage fall by the wayside, exhausted by these seemingly continual fruitless efforts. The only question is at what point do we jack it in at take up some other pursuit? Interestingly no matter how far we got, once we decide to quit and join the 95% we are no different from someone who gave up at the first obstacle, even if we gave up at the very last wall.

Or do we just doggedly keep going over wall after wall? Its obvious that the only option we have is to either quit or keep going at it and never giving up. Which will you be?

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