Perspectives on the global economic meltdown

vsudhir
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Re: Perspectives on the global economic meltdown

Postby vsudhir » 07 Apr 2009 07:45

Deutsche Analyst: High Yield Defaults to Reach 53% Over Next Five Years

About 53 percent of U.S. companies that issued high-risk, high-yield bonds will default over the next five years, according to Jim Reid at Deutsche Bank AG.

The figure compares with a 31 percent five-year rate in the early 1990s and 2000s, and as much as 45 percent “in a very, very different market in the Great Depression,” Reid, the London-based head of fundamental credit strategy, wrote in a note to clients today. The estimate is based on the premium investors demand to hold the notes and assumes recoveries from the defaults will be zero, Reid wrote.


This is big. Yves notes:

Note that the 53% cumulative default rate for junk bonds over the next five years foreseen by Deutsche Bank analyst Jim Reid is nearly twice the level forecast by Moodys of 29%, It is also well in excess of the rate during the S&L crisis, which produced a nasty but comparatively short recession.

Philip
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Joined: 01 Jan 1970 05:30
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Re: Perspectives on the global economic meltdown

Postby Philip » 07 Apr 2009 11:18

"Arabian Night..mare"...DUBAI.

The inside story of the world's biggest con-job,that dwarfs anything that Bernie Madoff and all the other international scamsters swindled together.Mastermind of this Arabian Nightmare,Sheikh Mohammed.

http://www.independent.co.uk/news/world ... 64368.html

The dark side of Dubai

Dubai was meant to be a Middle-Eastern Shangri-La, a glittering monument to Arab enterprise and western capitalism. But as hard times arrive in the city state that rose from the desert sands, an uglier story is emerging. Johann Hari reports


Tuesday, 7 April 2009
Getty

The Palm, a man-made archipelago off the coast of Dubai

© Click here for more Dubai images
The wide, smiling face of Sheikh Mohammed – the absolute ruler of Dubai – beams down on his creation. His image is displayed on every other building, sandwiched between the more familiar corporate rictuses of Ronald McDonald and Colonel Sanders. This man has sold Dubai to the world as the city of One Thousand and One Arabian Lights, a Shangri-La in the Middle East insulated from the dust-storms blasting across the region. He dominates the Manhattan-manqué skyline, beaming out from row after row of glass pyramids and hotels smelted into the shape of piles of golden coins. And there he stands on the tallest building in the world – a skinny spike, jabbing farther into the sky than any other human construction in history.

But something has flickered in Sheikh Mohammed's smile. The ubiquitous cranes have paused on the skyline, as if stuck in time. There are countless buildings half-finished, seemingly abandoned. In the swankiest new constructions – like the vast Atlantis hotel, a giant pink castle built in 1,000 days for $1.5bn on its own artificial island – where rainwater is leaking from the ceilings and the tiles are falling off the roof. This Neverland was built on the Never-Never – and now the cracks are beginning to show. Suddenly it looks less like Manhattan in the sun than Iceland in the desert.

Once the manic burst of building has stopped and the whirlwind has slowed, the secrets of Dubai are slowly seeping out. This is a city built from nothing in just a few wild decades on credit and ecocide, suppression and slavery. Dubai is a living metal metaphor for the neo-liberal globalised world that may be crashing – at last – into history.

I. An Adult Disneyland

Karen Andrews can't speak. Every time she starts to tell her story, she puts her head down and crumples. She is slim and angular and has the faded radiance of the once-rich, even though her clothes are as creased as her forehead. I find her in the car park of one of Dubai's finest international hotels, where she is living, in her Range Rover. She has been sleeping here for months, thanks to the kindness of the Bangladeshi car park attendants who don't have the heart to move her on. This is not where she thought her Dubai dream would end.

Her story comes out in stutters, over four hours. At times, her old voice – witty and warm – breaks through. Karen came here from Canada when her husband was offered a job in the senior division of a famous multinational. "When he said Dubai, I said – if you want me to wear black and quit booze, baby, you've got the wrong girl. But he asked me to give it a chance. And I loved him."

All her worries melted when she touched down in Dubai in 2005. "It was an adult Disneyland, where Sheikh Mohammed is the mouse," she says. "Life was fantastic. You had these amazing big apartments, you had a whole army of your own staff, you pay no taxes at all. It seemed like everyone was a CEO. We were partying the whole time."

Her husband, Daniel, bought two properties. "We were drunk on Dubai," she says. But for the first time in his life, he was beginning to mismanage their finances. "We're not talking huge sums, but he was getting confused. It was so unlike Daniel, I was surprised. We got into a little bit of debt." After a year, she found out why: Daniel was diagnosed with a brain tumour.

One doctor told him he had a year to live; another said it was benign and he'd be okay. But the debts were growing. "Before I came here, I didn't know anything about Dubai law. I assumed if all these big companies come here, it must be pretty like Canada's or any other liberal democracy's," she says. Nobody told her there is no concept of bankruptcy. If you get into debt and you can't pay, you go to prison.

"When we realised that, I sat Daniel down and told him: listen, we need to get out of here. He knew he was guaranteed a pay-off when he resigned, so we said – right, let's take the pay-off, clear the debt, and go." So Daniel resigned – but he was given a lower pay-off than his contract suggested. The debt remained. As soon as you quit your job in Dubai, your employer has to inform your bank. If you have any outstanding debts that aren't covered by your savings, then all your accounts are frozen, and you are forbidden to leave the country.

"Suddenly our cards stopped working. We had nothing. We were thrown out of our apartment." Karen can't speak about what happened next for a long time; she is shaking.

Daniel was arrested and taken away on the day of their eviction. It was six days before she could talk to him. "He told me he was put in a cell with another debtor, a Sri Lankan guy who was only 27, who said he couldn't face the shame to his family. Daniel woke up and the boy had swallowed razor-blades. He banged for help, but nobody came, and the boy died in front of him."

Karen managed to beg from her friends for a few weeks, "but it was so humiliating. I've never lived like this. I worked in the fashion industry. I had my own shops. I've never..." She peters out.

Daniel was sentenced to six months' imprisonment at a trial he couldn't understand. It was in Arabic, and there was no translation. "Now I'm here illegally, too," Karen says I've got no money, nothing. I have to last nine months until he's out, somehow." Looking away, almost paralysed with embarrassment, she asks if I could buy her a meal.

She is not alone. All over the city, there are maxed-out expats sleeping secretly in the sand-dunes or the airport or in their cars.

"The thing you have to understand about Dubai is – nothing is what it seems," Karen says at last. "Nothing. This isn't a city, it's a con-job. They lure you in telling you it's one thing – a modern kind of place – but beneath the surface it's a medieval dictatorship."

II. Tumbleweed

Thirty years ago, almost all of contemporary Dubai was desert, inhabited only by cactuses and tumbleweed and scorpions. But downtown there are traces of the town that once was, buried amidst the metal and glass. In the dusty fort of the Dubai Museum, a sanitised version of this story is told.

In the mid-18th century, a small village was built here, in the lower Persian Gulf, where people would dive for pearls off the coast. It soon began to accumulate a cosmopolitan population washing up from Persia, the Indian subcontinent, and other Arab countries, all hoping to make their fortune. They named it after a local locust, the daba, who consumed everything before it. The town was soon seized by the gunships of the British Empire, who held it by the throat as late as 1971. As they scuttled away, Dubai decided to ally with the six surrounding states and make up the United Arab Emirates (UAE).

The British quit, exhausted, just as oil was being discovered, and the sheikhs who suddenly found themselves in charge faced a remarkable dilemma. They were largely illiterate nomads who spent their lives driving camels through the desert – yet now they had a vast pot of gold. What should they do with it?

Dubai only had a dribble of oil compared to neighbouring Abu Dhabi – so Sheikh Maktoum decided to use the revenues to build something that would last. Israel used to boast it made the desert bloom; Sheikh Maktoum resolved to make the desert boom. He would build a city to be a centre of tourism and financial services, sucking up cash and talent from across the globe. He invited the world to come tax-free – and they came in their millions, swamping the local population, who now make up just 5 per cent of Dubai. A city seemed to fall from the sky in just three decades, whole and complete and swelling. They fast-forwarded from the 18th century to the 21st in a single generation.

If you take the Big Bus Tour of Dubai – the passport to a pre-processed experience of every major city on earth – you are fed the propaganda-vision of how this happened. "Dubai's motto is 'Open doors, open minds'," the tour guide tells you in clipped tones, before depositing you at the souks to buy camel tea-cosies. "Here you are free. To purchase fabrics," he adds. As you pass each new monumental building, he tells you: "The World Trade Centre was built by His Highness..."

But this is a lie. The sheikh did not build this city. It was built by slaves. They are building it now.

III. Hidden in plain view

There are three different Dubais, all swirling around each other. There are the expats, like Karen; there are the Emiratis, headed by Sheikh Mohammed; and then there is the foreign underclass who built the city, and are trapped here. They are hidden in plain view. You see them everywhere, in dirt-caked blue uniforms, being shouted at by their superiors, like a chain gang – but you are trained not to look. It is like a mantra: the Sheikh built the city. The Sheikh built the city. Workers? What workers?

Every evening, the hundreds of thousands of young men who build Dubai are bussed from their sites to a vast concrete wasteland an hour out of town, where they are quarantined away. Until a few years ago they were shuttled back and forth on cattle trucks, but the expats complained this was unsightly, so now they are shunted on small metal buses that function like greenhouses in the desert heat. They sweat like sponges being slowly wrung out.

Sonapur is a rubble-strewn patchwork of miles and miles of identical concrete buildings. Some 300,000 men live piled up here, in a place whose name in Hindi means "City of Gold". In the first camp I stop at – riven with the smell of sewage and sweat – the men huddle around, eager to tell someone, anyone, what is happening to them.

Sahinal Monir, a slim 24-year-old from the deltas of Bangladesh. "To get you here, they tell you Dubai is heaven. Then you get here and realise it is hell," he says. Four years ago, an employment agent arrived in Sahinal's village in Southern Bangladesh. He told the men of the village that there was a place where they could earn 40,000 takka a month (£400) just for working nine-to-five on construction projects. It was a place where they would be given great accommodation, great food, and treated well. All they had to do was pay an up-front fee of 220,000 takka (£2,300) for the work visa – a fee they'd pay off in the first six months, easy. So Sahinal sold his family land, and took out a loan from the local lender, to head to this paradise.

As soon as he arrived at Dubai airport, his passport was taken from him by his construction company. He has not seen it since. He was told brusquely that from now on he would be working 14-hour days in the desert heat – where western tourists are advised not to stay outside for even five minutes in summer, when it hits 55 degrees – for 500 dirhams a month (£90), less than a quarter of the wage he was promised. If you don't like it, the company told him, go home. "But how can I go home? You have my passport, and I have no money for the ticket," he said. "Well, then you'd better get to work," they replied.

Sahinal was in a panic. His family back home – his son, daughter, wife and parents – were waiting for money, excited that their boy had finally made it. But he was going to have to work for more than two years just to pay for the cost of getting here – and all to earn less than he did in Bangladesh.

He shows me his room. It is a tiny, poky, concrete cell with triple-decker bunk-beds, where he lives with 11 other men. All his belongings are piled onto his bunk: three shirts, a spare pair of trousers, and a cellphone. The room stinks, because the lavatories in the corner of the camp – holes in the ground – are backed up with excrement and clouds of black flies. There is no air conditioning or fans, so the heat is "unbearable. You cannot sleep. All you do is sweat and scratch all night." At the height of summer, people sleep on the floor, on the roof, anywhere where they can pray for a moment of breeze.

The water delivered to the camp in huge white containers isn't properly desalinated: it tastes of salt. "It makes us sick, but we have nothing else to drink," he says.

The work is "the worst in the world," he says. "You have to carry 50kg bricks and blocks of cement in the worst heat imaginable ... This heat – it is like nothing else. You sweat so much you can't pee, not for days or weeks. It's like all the liquid comes out through your skin and you stink. You become dizzy and sick but you aren't allowed to stop, except for an hour in the afternoon. You know if you drop anything or slip, you could die. If you take time off sick, your wages are docked, and you are trapped here even longer."

He is currently working on the 67th floor of a shiny new tower, where he builds upwards, into the sky, into the heat. He doesn't know its name. In his four years here, he has never seen the Dubai of tourist-fame, except as he constructs it floor-by-floor.

Is he angry? He is quiet for a long time. "Here, nobody shows their anger. You can't. You get put in jail for a long time, then deported." Last year, some workers went on strike after they were not given their wages for four months. The Dubai police surrounded their camps with razor-wire and water-cannons and blasted them out and back to work.

The "ringleaders" were imprisoned. I try a different question: does Sohinal regret coming? All the men look down, awkwardly. "How can we think about that? We are trapped. If we start to think about regrets..." He lets the sentence trail off. Eventually, another worker breaks the silence by adding: "I miss my country, my family and my land. We can grow food in Bangladesh. Here, nothing grows. Just oil and buildings."

Since the recession hit, they say, the electricity has been cut off in dozens of the camps, and the men have not been paid for months. Their companies have disappeared with their passports and their pay. "We have been robbed of everything. Even if somehow we get back to Bangladesh, the loan sharks will demand we repay our loans immediately, and when we can't, we'll be sent to prison."

This is all supposed to be illegal. Employers are meant to pay on time, never take your passport, give you breaks in the heat – but I met nobody who said it happens. Not one. These men are conned into coming and trapped into staying, with the complicity of the Dubai authorities.

Sahinal could well die out here. A British man who used to work on construction projects told me: "There's a huge number of suicides in the camps and on the construction sites, but they're not reported. They're described as 'accidents'." Even then, their families aren't free: they simply inherit the debts. A Human Rights Watch study found there is a "cover-up of the true extent" of deaths from heat exhaustion, overwork and suicide, but the Indian consulate registered 971 deaths of their nationals in 2005 alone. After this figure was leaked, the consulates were told to stop counting.

At night, in the dusk, I sit in the camp with Sohinal and his friends as they scrape together what they have left to buy a cheap bottle of spirits. They down it in one ferocious gulp. "It helps you to feel numb", Sohinal says through a stinging throat. In the distance, the glistening Dubai skyline he built stands, oblivious.

IV. Mauled by the mall

I find myself stumbling in a daze from the camps into the sprawling marble malls that seem to stand on every street in Dubai. It is so hot there is no point building pavements; people gather in these cathedrals of consumerism to bask in the air conditioning. So within a ten minute taxi-ride, I have left Sohinal and I am standing in the middle of Harvey Nichols, being shown a £20,000 taffeta dress by a bored salesgirl. "As you can see, it is cut on the bias..." she says, and I stop writing.

Time doesn't seem to pass in the malls. Days blur with the same electric light, the same shined floors, the same brands I know from home. Here, Dubai is reduced to its component sounds: do-buy. In the most expensive malls I am almost alone, the shops empty and echoing. On the record, everybody tells me business is going fine. Off the record, they look panicky. There is a hat exhibition ahead of the Dubai races, selling elaborate headgear for £1,000 a pop. "Last year, we were packed. Now look," a hat designer tells me. She swoops her arm over a vacant space.

I approach a blonde 17-year-old Dutch girl wandering around in hotpants, oblivious to the swarms of men gaping at her. "I love it here!" she says. "The heat, the malls, the beach!" Does it ever bother you that it's a slave society? She puts her head down, just as Sohinal did. "I try not to see," she says. Even at 17, she has learned not to look, and not to ask; that, she senses, is a transgression too far.

Between the malls, there is nothing but the connecting tissue of asphalt. Every road has at least four lanes; Dubai feels like a motorway punctuated by shopping centres. You only walk anywhere if you are suicidal. The residents of Dubai flit from mall to mall by car or taxis.

How does it feel if this is your country, filled with foreigners? Unlike the expats and the slave class, I can't just approach the native Emiratis to ask questions when I see them wandering around – the men in cool white robes, the women in sweltering black. If you try, the women blank you, and the men look affronted, and tell you brusquely that Dubai is "fine". So I browse through the Emirati blog-scene and found some typical-sounding young Emiratis. We meet – where else? – in the mall.

Ahmed al-Atar is a handsome 23-year-old with a neat, trimmed beard, tailored white robes, and rectangular wire-glasses. He speaks perfect American-English, and quickly shows that he knows London, Los Angeles and Paris better than most westerners. Sitting back in his chair in an identikit Starbucks, he announces: "This is the best place in the world to be young! The government pays for your education up to PhD level. You get given a free house when you get married. You get free healthcare, and if it's not good enough here, they pay for you to go abroad. You don't even have to pay for your phone calls. Almost everyone has a maid, a nanny, and a driver. And we never pay any taxes. Don't you wish you were Emirati?"

I try to raise potential objections to this Panglossian summary, but he leans forward and says: "Look – my grandfather woke up every day and he would have to fight to get to the well first to get water. When the wells ran dry, they had to have water delivered by camel. They were always hungry and thirsty and desperate for jobs. He limped all his life, because he there was no medical treatment available when he broke his leg. Now look at us!"

For Emiratis, this is a Santa Claus state, handing out goodies while it makes its money elsewhere: through renting out land to foreigners, soft taxes on them like business and airport charges, and the remaining dribble of oil. Most Emiratis, like Ahmed, work for the government, so they're cushioned from the credit crunch. "I haven't felt any effect at all, and nor have my friends," he says. "Your employment is secure. You will only be fired if you do something incredibly bad." The laws are currently being tightened, to make it even more impossible to sack an Emirati.

Sure, the flooding-in of expats can sometimes be "an eyesore", Ahmed says. "But we see the expats as the price we had to pay for this development. How else could we do it? Nobody wants to go back to the days of the desert, the days before everyone came. We went from being like an African country to having an average income per head of $120,000 a year. And we're supposed to complain?"

He says the lack of political freedom is fine by him. "You'll find it very hard to find an Emirati who doesn't support Sheikh Mohammed." Because they're scared? "No, because we really all support him. He's a great leader. Just look!" He smiles and says: "I'm sure my life is very much like yours. We hang out, have a coffee, go to the movies. You'll be in a Pizza Hut or Nando's in London, and at the same time I'll be in one in Dubai," he says, ordering another latte.

But do all young Emiratis see it this way? Can it really be so sunny in the political sands? In the sleek Emirates Tower Hotel, I meet Sultan al-Qassemi. He's a 31-year-old Emirati columnist for the Dubai press and private art collector, with a reputation for being a contrarian liberal, advocating gradual reform. He is wearing Western clothes – blue jeans and a Ralph Lauren shirt – and speaks incredibly fast, turning himself into a manic whirr of arguments.

"People here are turning into lazy, overweight babies!" he exclaims. "The nanny state has gone too far. We don't do anything for ourselves! Why don't any of us work for the private sector? Why can't a mother and father look after their own child?" And yet, when I try to bring up the system of slavery that built Dubai, he looks angry. "People should give us credit," he insists. "We are the most tolerant people in the world. Dubai is the only truly international city in the world. Everyone who comes here is treated with respect."

I pause, and think of the vast camps in Sonapur, just a few miles away. Does he even know they exist? He looks irritated. "You know, if there are 30 or 40 cases [of worker abuse] a year, that sounds like a lot but when you think about how many people are here..." Thirty or 40? This abuse is endemic to the system, I say. We're talking about hundreds of thousands.

Sultan is furious. He splutters: "You don't think Mexicans are treated badly in New York City? And how long did it take Britain to treat people well? I could come to London and write about the homeless people on Oxford Street and make your city sound like a terrible place, too! The workers here can leave any time they want! Any Indian can leave, any Asian can leave!"

But they can't, I point out. Their passports are taken away, and their wages are withheld. "Well, I feel bad if that happens, and anybody who does that should be punished. But their embassies should help them." They try. But why do you forbid the workers – with force – from going on strike against lousy employers? "Thank God we don't allow that!" he exclaims. "Strikes are in-convenient! They go on the street – we're not having that. We won't be like France. Imagine a country where they the workers can just stop whenever they want!" So what should the workers do when they are cheated and lied to? "Quit. Leave the country."

I sigh. Sultan is seething now. "People in the West are always complaining about us," he says. Suddenly, he adopts a mock-whiny voice and says, in imitation of these disgusting critics: "Why don't you treat animals better? Why don't you have better shampoo advertising? Why don't you treat labourers better?" It's a revealing order: animals, shampoo, then workers. He becomes more heated, shifting in his seat, jabbing his finger at me. "I gave workers who worked for me safety goggles and special boots, and they didn't want to wear them! It slows them down!"

And then he smiles, coming up with what he sees as his killer argument. "When I see Western journalists criticise us – don't you realise you're shooting yourself in the foot? The Middle East will be far more dangerous if Dubai fails. Our export isn't oil, it's hope. Poor Egyptians or Libyans or Iranians grow up saying – I want to go to Dubai. We're very important to the region. We are showing how to be a modern Muslim country. We don't have any fundamentalists here. Europeans shouldn't gloat at our demise. You should be very worried.... Do you know what will happen if this model fails? Dubai will go down the Iranian path, the Islamist path."

Sultan sits back. My arguments have clearly disturbed him; he says in a softer, conciliatory tone, almost pleading: "Listen. My mother used to go to the well and get a bucket of water every morning. On her wedding day, she was given an orange as a gift because she had never eaten one. Two of my brothers died when they were babies because the healthcare system hadn't developed yet. Don't judge us." He says it again, his eyes filled with intensity: "Don't judge us."

V. The Dunkin' Donuts Dissidents

But there is another face to the Emirati minority – a small huddle of dissidents, trying to shake the Sheikhs out of abusive laws. Next to a Virgin Megastore and a Dunkin' Donuts, with James Blunt's "You're Beautiful" blaring behind me, I meet the Dubai dictatorship's Public Enemy Number One. By way of introduction, Mohammed al-Mansoori says from within his white robes and sinewy face: "Westerners come her and see the malls and the tall buildings and they think that means we are free. But these businesses, these buildings – who are they for? This is a dictatorship. The royal family think they own the country, and the people are their servants. There is no freedom here."

We snuffle out the only Arabic restaurant in this mall, and he says everything you are banned – under threat of prison – from saying in Dubai. Mohammed tells me he was born in Dubai to a fisherman father who taught him one enduring lesson: Never follow the herd. Think for yourself. In the sudden surge of development, Mohammed trained as a lawyer. By the Noughties, he had climbed to the head of the Jurists' Association, an organisation set up to press for Dubai's laws to be consistent with international human rights legislation.

And then – suddenly – Mohammed thwacked into the limits of Sheikh Mohammed's tolerance. Horrified by the "system of slavery" his country was being built on, he spoke out to Human Rights Watch and the BBC. "So I was hauled in by the secret police and told: shut up, or you will lose you job, and your children will be unemployable," he says. "But how could I be silent?"

He was stripped of his lawyer's licence and his passport – becoming yet another person imprisoned in this country. "I have been blacklisted and so have my children. The newspapers are not allowed to write about me."

Why is the state so keen to defend this system of slavery? He offers a prosaic explanation. "Most companies are owned by the government, so they oppose human rights laws because it will reduce their profit margins. It's in their interests that the workers are slaves."

Last time there was a depression, there was a starbust of democracy in Dubai, seized by force from the sheikhs. In the 1930s, the city's merchants banded together against Sheikh Said bin Maktum al-Maktum – the absolute ruler of his day – and insisted they be given control over the state finances. It lasted only a few years, before the Sheikh – with the enthusiastic support of the British – snuffed them out.

And today? Sheikh Mohammed turned Dubai into Creditopolis, a city built entirely on debt. Dubai owes 107 percent of its entire GDP. It would be bust already, if the neighbouring oil-soaked state of Abu Dhabi hadn't pulled out its chequebook. Mohammed says this will constrict freedom even further. "Now Abu Dhabi calls the tunes – and they are much more conservative and restrictive than even Dubai. Freedom here will diminish every day." Already, new media laws have been drafted forbidding the press to report on anything that could "damage" Dubai or "its economy". Is this why the newspapers are giving away glossy supplements talking about "encouraging economic indicators"?

Everybody here waves Islamism as the threat somewhere over the horizon, sure to swell if their advice is not followed. Today, every imam is appointed by the government, and every sermon is tightly controlled to keep it moderate. But Mohammed says anxiously: "We don't have Islamism here now, but I think that if you control people and give them no way to express anger, it could rise. People who are told to shut up all the time can just explode."

Later that day, against another identikit-corporate backdrop, I meet another dissident – Abdulkhaleq Abdullah, Professor of Political Science at Emirates University. His anger focuses not on political reform, but the erosion of Emirati identity. He is famous among the locals, a rare outspoken conductor for their anger. He says somberly: "There has been a rupture here. This is a totally different city to the one I was born in 50 years ago."

He looks around at the shiny floors and Western tourists and says: "What we see now didn't occur in our wildest dreams. We never thought we could be such a success, a trendsetter, a model for other Arab countries. The people of Dubai are mighty proud of their city, and rightly so. And yet..." He shakes his head. "In our hearts, we fear we have built a modern city but we are losing it to all these expats."

Adbulkhaleq says every Emirati of his generation lives with a "psychological trauma." Their hearts are divided – "between pride on one side, and fear on the other." Just after he says this, a smiling waitress approaches, and asks us what we would like to drink. He orders a Coke.

VI. Dubai Pride

There is one group in Dubai for whom the rhetoric of sudden freedom and liberation rings true – but it is the very group the government wanted to liberate least: gays.

Beneath a famous international hotel, I clamber down into possibly the only gay club on the Saudi Arabian peninsula. I find a United Nations of tank-tops and bulging biceps, dancing to Kylie, dropping ecstasy, and partying like it's Soho. "Dubai is the best place in the Muslim world for gays!" a 25-year old Emirati with spiked hair says, his arms wrapped around his 31-year old "husband". "We are alive. We can meet. That is more than most Arab gays."

It is illegal to be gay in Dubai, and punishable by 10 years in prison. But the locations of the latest unofficial gay clubs circulate online, and men flock there, seemingly unafraid of the police. "They might bust the club, but they will just disperse us," one of them says. "The police have other things to do."

In every large city, gay people find a way to find each other – but Dubai has become the clearing-house for the region's homosexuals, a place where they can live in relative safety. Saleh, a lean private in the Saudi Arabian army, has come here for the Coldplay concert, and tells me Dubai is "great" for gays: "In Saudi, it's hard to be straight when you're young. The women are shut away so everyone has gay sex. But they only want to have sex with boys – 15- to 21-year-olds. I'm 27, so I'm too old now. I need to find real gays, so this is the best place. All Arab gays want to live in Dubai."

With that, Saleh dances off across the dancefloor, towards a Dutch guy with big biceps and a big smile.

VII. The Lifestyle

All the guidebooks call Dubai a "melting pot", but as I trawl across the city, I find that every group here huddles together in its own little ethnic enclave – and becomes a caricature of itself. One night – in the heart of this homesick city, tired of the malls and the camps – I go to Double Decker, a hang-out for British expats. At the entrance there is a red telephone box, and London bus-stop signs. Its wooden interior looks like a cross between a colonial clubhouse in the Raj and an Eighties school disco, with blinking coloured lights and cheese blaring out. As I enter, a girl in a short skirt collapses out of the door onto her back. A guy wearing a pirate hat helps her to her feet, dropping his beer bottle with a paralytic laugh.

I start to talk to two sun-dried women in their sixties who have been getting gently sozzled since midday. "You stay here for The Lifestyle," they say, telling me to take a seat and order some more drinks. All the expats talk about The Lifestyle, but when you ask what it is, they become vague. Ann Wark tries to summarise it: "Here, you go out every night. You'd never do that back home. You see people all the time. It's great. You have lots of free time. You have maids and staff so you don't have to do all that stuff. You party!"

They have been in Dubai for 20 years, and they are happy to explain how the city works. "You've got a hierarchy, haven't you?" Ann says. "It's the Emiratis at the top, then I'd say the British and other Westerners. Then I suppose it's the Filipinos, because they've got a bit more brains than the Indians. Then at the bottom you've got the Indians and all them lot."

They admit, however, they have "never" spoken to an Emirati. Never? "No. They keep themselves to themselves." Yet Dubai has disappointed them. Jules Taylor tells me: "If you have an accident here it's a nightmare. There was a British woman we knew who ran over an Indian guy, and she was locked up for four days! If you have a tiny bit of alcohol on your breath they're all over you. These Indians throw themselves in front of cars, because then their family has to be given blood money – you know, compensation. But the police just blame us. That poor woman."

A 24-year-old British woman called Hannah Gamble takes a break from the dancefloor to talk to me. "I love the sun and the beach! It's great out here!" she says. Is there anything bad? "Oh yes!" she says. Ah: one of them has noticed, I think with relief. "The banks! When you want to make a transfer you have to fax them. You can't do it online." Anything else? She thinks hard. "The traffic's not very good."

When I ask the British expats how they feel to not be in a democracy, their reaction is always the same. First, they look bemused. Then they look affronted. "It's the Arab way!" an Essex boy shouts at me in response, as he tries to put a pair of comedy antlers on his head while pouring some beer into the mouth of his friend, who is lying on his back on the floor, gurning.

Later, in a hotel bar, I start chatting to a dyspeptic expat American who works in the cosmetics industry and is desperate to get away from these people. She says: "All the people who couldn't succeed in their own countries end up here, and suddenly they're rich and promoted way above their abilities and bragging about how great they are. I've never met so many incompetent people in such senior positions anywhere in the world." She adds: "It's absolutely racist. I had Filipino girls working for me doing the same job as a European girl, and she's paid a quarter of the wages. The people who do the real work are paid next to nothing, while these incompetent managers pay themselves £40,000 a month."

With the exception of her, one theme unites every expat I speak to: their joy at having staff to do the work that would clog their lives up Back Home. Everyone, it seems, has a maid. The maids used to be predominantly Filipino, but with the recession, Filipinos have been judged to be too expensive, so a nice Ethiopian servant girl is the latest fashionable accessory.

It is an open secret that once you hire a maid, you have absolute power over her. You take her passport – everyone does; you decide when to pay her, and when – if ever – she can take a break; and you decide who she talks to. She speaks no Arabic. She cannot escape.

In a Burger King, a Filipino girl tells me it is "terrifying" for her to wander the malls in Dubai because Filipino maids or nannies always sneak away from the family they are with and beg her for help. "They say – 'Please, I am being held prisoner, they don't let me call home, they make me work every waking hour seven days a week.' At first I would say – my God, I will tell the consulate, where are you staying? But they never know their address, and the consulate isn't interested. I avoid them now. I keep thinking about a woman who told me she hadn't eaten any fruit in four years. They think I have power because I can walk around on my own, but I'm powerless."

The only hostel for women in Dubai – a filthy private villa on the brink of being repossessed – is filled with escaped maids. Mela Matari, a 25-year-old Ethiopian woman with a drooping smile, tells me what happened to her – and thousands like her. She was promised a paradise in the sands by an agency, so she left her four year-old daughter at home and headed here to earn money for a better future. "But they paid me half what they promised. I was put with an Australian family – four children – and Madam made me work from 6am to 1am every day, with no day off. I was exhausted and pleaded for a break, but they just shouted: 'You came here to work, not sleep!' Then one day I just couldn't go on, and Madam beat me. She beat me with her fists and kicked me. My ear still hurts. They wouldn't give me my wages: they said they'd pay me at the end of the two years. What could I do? I didn't know anybody here. I was terrified."

One day, after yet another beating, Mela ran out onto the streets, and asked – in broken English – how to find the Ethiopian consulate. After walking for two days, she found it, but they told her she had to get her passport back from Madam. "Well, how could I?" she asks. She has been in this hostel for six months. She has spoken to her daughter twice. "I lost my country, I lost my daughter, I lost everything," she says.

As she says this, I remember a stray sentence I heard back at Double Decker. I asked a British woman called Hermione Frayling what the best thing about Dubai was. "Oh, the servant class!" she trilled. "You do nothing. They'll do anything!"

VIII. The End of The World

The World is empty. It has been abandoned, its continents unfinished. Through binoculars, I think I can glimpse Britain; this sceptred isle barren in the salt-breeze.

Here, off the coast of Dubai, developers have been rebuilding the world. They have constructed artificial islands in the shape of all planet Earth's land masses, and they plan to sell each continent off to be built on. There were rumours that the Beckhams would bid for Britain. But the people who work at the nearby coast say they haven't seen anybody there for months now. "The World is over," a South African suggests.

All over Dubai, crazy projects that were Under Construction are now Under Collapse. They were building an air-conditioned beach here, with cooling pipes running below the sand, so the super-rich didn't singe their toes on their way from towel to sea.

The projects completed just before the global economy crashed look empty and tattered. The Atlantis Hotel was launched last winter in a $20m fin-de-siecle party attended by Robert De Niro, Lindsay Lohan and Lily Allen. Sitting on its own fake island – shaped, of course, like a palm tree – it looks like an immense upturned tooth in a faintly decaying mouth. It is pink and turreted – the architecture of the pharaohs, as reimagined by Zsa-Zsa Gabor. Its Grand Lobby is a monumental dome covered in glitterballs, held up by eight monumental concrete palm trees. Standing in the middle, there is a giant shining glass structure that looks like the intestines of every guest who has ever stayed at the Atlantis. It is unexpectedly raining; water is leaking from the roof, and tiles are falling off.

A South African PR girl shows me around its most coveted rooms, explaining that this is "the greatest luxury offered in the world". We stroll past shops selling £24m diamond rings around a hotel themed on the lost and sunken continent of, yes, Atlantis. There are huge water tanks filled with sharks, which poke around mock-abandoned castles and dumped submarines. There are more than 1,500 rooms here, each with a sea view. The Neptune suite has three floors, and – I gasp as I see it – it looks out directly on to the vast shark tank. You lie on the bed, and the sharks stare in at you. In Dubai, you can sleep with the fishes, and survive.

But even the luxury – reminiscent of a Bond villain's lair – is also being abandoned. I check myself in for a few nights to the classiest hotel in town, the Park Hyatt. It is the fashionistas' favourite hotel, where Elle Macpherson and Tommy Hilfiger stay, a gorgeous, understated palace. It feels empty. Whenever I eat, I am one of the only people in the restaurant. A staff member tells me in a whisper: "It used to be full here. Now there's hardly anyone." Rattling around, I feel like Jack Nicholson in The Shining, the last man in an abandoned, haunted home.

The most famous hotel in Dubai – the proud icon of the city – is the Burj al Arab hotel, sitting on the shore, shaped like a giant glass sailing boat. In the lobby, I start chatting to a couple from London who work in the City. They have been coming to Dubai for 10 years now, and they say they love it. "You never know what you'll find here," he says. "On our last trip, at the beginning of the holiday, our window looked out on the sea. By the end, they'd built an entire island there."

My patience frayed by all this excess, I find myself snapping: doesn't the omnipresent slave class bother you? I hope they misunderstood me, because the woman replied: "That's what we come for! It's great, you can't do anything for yourself!" Her husband chimes in: "When you go to the toilet, they open the door, they turn on the tap – the only thing they don't do is take it out for you when you have a piss!" And they both fall about laughing.

IX. Taking on the Desert

Dubai is not just a city living beyond its financial means; it is living beyond its ecological means. You stand on a manicured Dubai lawn and watch the sprinklers spray water all around you. You see tourists flocking to swim with dolphins. You wander into a mountain-sized freezer where they have built a ski slope with real snow. And a voice at the back of your head squeaks: this is the desert. This is the most water-stressed place on the planet. How can this be happening? How is it possible?

The very earth is trying to repel Dubai, to dry it up and blow it away. The new Tiger Woods Gold Course needs four million gallons of water to be pumped on to its grounds every day, or it would simply shrivel and disappear on the winds. The city is regularly washed over with dust-storms that fog up the skies and turn the skyline into a blur. When the dust parts, heat burns through. It cooks anything that is not kept constantly, artificially wet.

Dr Mohammed Raouf, the environmental director of the Gulf Research Centre, sounds sombre as he sits in his Dubai office and warns: "This is a desert area, and we are trying to defy its environment. It is very unwise. If you take on the desert, you will lose."

Sheikh Maktoum built his showcase city in a place with no useable water. None. There is no surface water, very little acquifer, and among the lowest rainfall in the world. So Dubai drinks the sea. The Emirates' water is stripped of salt in vast desalination plants around the Gulf – making it the most expensive water on earth. It costs more than petrol to produce, and belches vast amounts of carbon dioxide into the atmosphere as it goes. It's the main reason why a resident of Dubai has the biggest average carbon footprint of any human being – more than double that of an American.

If a recession turns into depression, Dr Raouf believes Dubai could run out of water. "At the moment, we have financial reserves that cover bringing so much water to the middle of the desert. But if we had lower revenues – if, say, the world shifts to a source of energy other than oil..." he shakes his head. "We will have a very big problem. Water is the main source of life. It would be a catastrophe. Dubai only has enough water to last us a week. There's almost no storage. We don't know what will happen if our supplies falter. It would be hard to survive."

Global warming, he adds, makes the problem even worse. "We are building all these artificial islands, but if the sea level rises, they will be gone, and we will lose a lot. Developers keep saying it's all fine, they've taken it into consideration, but I'm not so sure."

Is the Dubai government concerned about any of this? "There isn't much interest in these problems," he says sadly. But just to stand still, the average resident of Dubai needs three times more water than the average human. In the looming century of water stresses and a transition away from fossil fuels, Dubai is uniquely vulnerable.

I wanted to understand how the government of Dubai will react, so I decided to look at how it has dealt with an environmental problem that already exists – the pollution of its beaches. One woman – an American, working at one of the big hotels – had written in a lot of online forums arguing that it was bad and getting worse, so I called her to arrange a meeting. "I can't talk to you," she said sternly. Not even if it's off the record? "I can't talk to you." But I don't have to disclose your name... "You're not listening. This phone is bugged. I can't talk to you," she snapped, and hung up.

The next day I turned up at her office. "If you reveal my identity, I'll be sent on the first plane out of this city," she said, before beginning to nervously pace the shore with me. "It started like this. We began to get complaints from people using the beach. The water looked and smelled odd, and they were starting to get sick after going into it. So I wrote to the ministers of health and tourism and expected to hear back immediately – but there was nothing. Silence. I hand-delivered the letters. Still nothing."

The water quality got worse and worse. The guests started to spot raw sewage, condoms, and used sanitary towels floating in the sea. So the hotel ordered its own water analyses from a professional company. "They told us it was full of fecal matter and bacteria 'too numerous to count'. I had to start telling guests not to go in the water, and since they'd come on a beach holiday, as you can imagine, they were pretty pissed off." She began to make angry posts on the expat discussion forums – and people began to figure out what was happening. Dubai had expanded so fast its sewage treatment facilities couldn't keep up. The sewage disposal trucks had to queue for three or four days at the treatment plants – so instead, they were simply drilling open the manholes and dumping the untreated sewage down them, so it flowed straight to the sea.

Suddenly, it was an open secret – and the municipal authorities finally acknowledged the problem. They said they would fine the truckers. But the water quality didn't improve: it became black and stank. "It's got chemicals in it. I don't know what they are. But this stuff is toxic."

She continued to complain – and started to receive anonymous phone calls. "Stop embarassing Dubai, or your visa will be cancelled and you're out," they said. She says: "The expats are terrified to talk about anything. One critical comment in the newspapers and they deport you. So what am I supposed to do? Now the water is worse than ever. People are getting really sick. Eye infections, ear infections, stomach infections, rashes. Look at it!" There is faeces floating on the beach, in the shadow of one of Dubai's most famous hotels.

"What I learnt about Dubai is that the authorities don't give a toss about the environment," she says, standing in the stench. "They're pumping toxins into the sea, their main tourist attraction, for God's sake. If there are environmental problems in the future, I can tell you now how they will deal with them – deny it's happening, cover it up, and carry on until it's a total disaster." As she speaks, a dust-storm blows around us, as the desert tries, slowly, insistently, to take back its land.

X. Fake Plastic Trees

On my final night in the Dubai Disneyland, I stop off on my way to the airport, at a Pizza Hut that sits at the side of one of the city's endless, wide, gaping roads. It is identical to the one near my apartment in London in every respect, even the vomit-coloured decor. My mind is whirring and distracted. Perhaps Dubai disturbed me so much, I am thinking, because here, the entire global supply chain is condensed. Many of my goods are made by semi-enslaved populations desperate for a chance 2,000 miles away; is the only difference that here, they are merely two miles away, and you sometimes get to glimpse their faces? Dubai is Market Fundamentalist Globalisation in One City.

I ask the Filipino girl behind the counter if she likes it here. "It's OK," she says cautiously. Really? I say. I can't stand it. She sighs with relief and says: "This is the most terrible place! I hate it! I was here for months before I realised – everything in Dubai is fake. Everything you see. The trees are fake, the workers' contracts are fake, the islands are fake, the smiles are fake – even the water is fake!" But she is trapped, she says. She got into debt to come here, and she is stuck for three years: an old story now. "I think Dubai is like an oasis. It is an illusion, not real. You think you have seen water in the distance, but you get close and you only get a mouthful of sand."

As she says this, another customer enters. She forces her face into the broad, empty Dubai smile and says: "And how may I help you tonight, sir?"

Some names in this article have been changed.

sanjaykumar
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Re: Perspectives on the global economic meltdown

Postby sanjaykumar » 07 Apr 2009 12:38

This is some of the best newspaper reporting I have read. That a Brit wrote it should be noted by all.

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Re: Perspectives on the global economic meltdown

Postby Singha » 07 Apr 2009 14:21

Saleh, a lean private in the Saudi Arabian army, has come here for the Coldplay concert, and tells me Dubai is "great" for gays: "In Saudi, it's hard to be straight when you're young. The women are shut away so everyone has gay sex. But they only want to have sex with boys – 15- to 21-year-olds. I'm 27, so I'm too old now. I need to find real gays, so this is the best place. All Arab gays want to live in Dubai."

..........
Later, in a hotel bar, I start chatting to a dyspeptic expat American who works in the cosmetics industry and is desperate to get away from these people. She says: "All the people who couldn't succeed in their own countries end up here, and suddenly they're rich and promoted way above their abilities and bragging about how great they are. I've never met so many incompetent people in such senior positions anywhere in the world."

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Re: Perspectives on the global economic meltdown

Postby Dilbu » 07 Apr 2009 16:03

That is a very well researched article on Dubai. Very soon Dubai will be remembered as an example of excessively greedy capitalism never to be repeated again.

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Re: Perspectives on the global economic meltdown

Postby Arya Sumantra » 07 Apr 2009 16:14

sanjaykumar wrote:This is some of the best newspaper reporting I have read. That a Brit wrote it should be noted by all.


It just happened that the non-anglo saxon victim of a brit's pen happened to be a genuine crook this time around.

Philip wrote:Ann says. "It's the Emiratis at the top, then I'd say the British and other Westerners. Then I suppose it's the Filipinos, because they've got a bit more brains than the Indians. Then at the bottom you've got the Indians and all them lot."

The hierarchy is not based on brains Madam Ann. It's locals > goras > fairer asians > SDREs based on a complex mix of ethnicity, status of country of origin(1st/2nd/3rd world), skin tone, collar of work (white or blue collar)done by majority of that community etc

Meanwhile the jewels:
Philip wrote:Standing in the middle, there is a giant shining glass structure that looks like the intestines of every guest who has ever stayed at the Atlantis.

and
Philip wrote:On my final night in the Dubai Disneyland, I stop off on my way to the airport, at a Pizza Hut that sits at the side of one of the city's endless, wide, gaping roads. It is identical to the one near my apartment in London in every respect, even the vomit-coloured decor.

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Re: Perspectives on the global economic meltdown

Postby AjayKK » 07 Apr 2009 16:21

Psyche of the Brits is excellently captured in that article.

This week, in the papers we have two related articles.

Dreams run out in Kerala

At the candyfloss pink house he built with his Gulf earnings, Abdul Kader (52) sits on a sofa still wrapped in plastic.

His basement is crowded with things he has brought back: A washing machine, a music system, a TV — luxuries he bought while working as a supermarket attendant in Abu Dhabi.

Now unshaven and teary eyed, Kader speaks of how frightening the future seems with a wife and three children to support.

http://www.hindustantimes.com/StoryPage ... +in+Kerala



THE GAPING GULF

When the last crane dulled into a drone before finally creaking to a halt at a construction site in Dubai last December, Kudukkilpoyil Shoukkathu felt the stillness grow into a monstrous reality: he would have to leave Dubai and take the next flight to Kerala. Shoukkathu had lost his job with a leading construction firm in Dubai,

http://www.indianexpress.com/news/the-g ... f/443162/0

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Re: Perspectives on the global economic meltdown

Postby Dilbu » 07 Apr 2009 16:30

The hierarchy is not based on brains Madam Ann. It's locals > goras > fairer asians > SDREs based on a complex mix of ethnicity, status of country of origin(1st/2nd/3rd world), skin tone, collar of work (white or blue collar)done by majority of that community etc

It is not just because of that. Here in Dubai you will hardly see Filipino manual labourers. Majority of Filipinos are employed as sales people or customer care staff in the numerous malls, offices and hotels where these gora madams visit. Because Filipinos have better english skills than the average SDRE. The vast majority of Indians are blue collared workers when compared to filipinos but you will hardly find any Filipinos in senior positions anywhere in Dubai. Indians run this place, whether it is in private or public organisations.
Then I suppose it's the Filipinos, because they've got a bit more brains than the Indians.

This is pure bull $hit.

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Re: Perspectives on the global economic meltdown

Postby IndraD » 07 Apr 2009 16:37

Philip

I want to contac you , can you please send me check mail on
mr.morphine@rediffmail.com

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Re: Perspectives on the global economic meltdown

Postby Arunkumar » 07 Apr 2009 16:55

Good article Philip.

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Re: Perspectives on the global economic meltdown

Postby vsudhir » 07 Apr 2009 16:56

How interesting. Yesterday's BBC on PBS featured a Dubai special - an undercover hidden-camera expose as it were on how terrible living conditions were for the vast majority of Dubai's conned construction workers (and they were terrible).

BBC for once 'Indian subcontinent' when referring to the origin of these unfortunates, not their favorite 'south asia'.

Dubai, like water, is finding its own level, seems like. A few more yrs of downturn and perhaps the ICC can be persuaded to move to its real home - Mumbai.....

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Re: Perspectives on the global economic meltdown

Postby Dileep » 07 Apr 2009 18:03

This gulf returnee issue is going to affect Kerala much more than you can fathom.

1. The (already crashed) real estate scene is going to CRUMBLE to dust, because people will be forced to sell their properties.

2. The local businesses and services are seeing remarkable fall in business already. That is going to only worsen.

3. The biggest problem will be Extremism is going to shoot up. Already the muslim areas are recruiting grounds. Desperate youth are easy targets. Very easy to blame it on the kaafir yindoos, and incite violence.

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Re: Perspectives on the global economic meltdown

Postby Singha » 07 Apr 2009 18:07

question is why this sudden spate of exposes on dubai? sure its a interesting topic to cover a kleptopolis going underwater but the deeper intent imo is to make sure all the capital held there / earmarked for there now exits the half-finished projects and finds their way back to europe, russia and north america.

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Re: Perspectives on the global economic meltdown

Postby vina » 07 Apr 2009 18:25

Singhaji. Dubai was a Disneyesque creation, which somehow kept telling the outside world that it is not an "oil' economy, but a "services" economy (Emirates Airlines, Financial Services, Dubai Port) an Arab Singapore if you will..

Difference is Singaporeans are Chinese, Indians and Malays and Civilized. Dubai is Arabs. And much as they would like to protest otherwise, it is an Oil economy, dependent on the surrounding Arab states for demand for all kinds of "services" (including the kind the Soddie Soldier you mentioned wants :wink: ) . Now the yellow matter is hit the fan and it is meltdown time. Yeah, Abu Dhabi will take control and pump it with oil money. But then the go go years are over. Dubai will remain littered with the carcasses of the half built buildings and much of the buildings will go to seed. Al Nakab, Emaar etc, are finished. Emirates Airlines have given a 6 month "holiday" (non paid of course) to their cabin crew and staff. It aint going to get any better anytime soon. The Dubai circus is over.

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Re: Perspectives on the global economic meltdown

Postby rajkumar » 07 Apr 2009 20:10

vina wrote:The Dubai circus is over.


Infact any circus based on 'debt' whether it was personal or coporate is over!!!

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Re: Perspectives on the global economic meltdown

Postby vsudhir » 07 Apr 2009 20:29

You know abt picture==1000 words and all that...

First Global Output Decline Since 1930's

Image

Meanwhile,
[corporate]Default Rate Surges to Highest Since Depression

and

Europe’s Recession Deepens as Investment Declines

Not pretty IMO. Might even see declines for the next half decade in real GDP in major G7 economies, possibly. There's no bottom in sight and only the optimists are voicing bottom-sightings with realists cautiously silent all the while.

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Re: Perspectives on the global economic meltdown

Postby Neela » 07 Apr 2009 20:41

vsudhir wrote:How interesting. Yesterday's BBC on PBS featured a Dubai special - an undercover hidden-camera expose as it were on how terrible living conditions were for the vast majority of Dubai's conned construction workers (and they were terrible).

BBC for once 'Indian subcontinent' when referring to the origin of these unfortunates, not their favorite 'south asia'.

Dubai, like water, is finding its own level, seems like. A few more yrs of downturn and perhaps the ICC can be persuaded to move to its real home - Mumbai.....



Sudhirji, I thought the ICC was in Dubai because earnings there are tax-free!

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Re: Perspectives on the global economic meltdown

Postby Stan_Savljevic » 07 Apr 2009 21:01

Neela wrote:Sudhirji, I thought the ICC was in Dubai because earnings there are tax-free!

The major reason for shifting appears to be the ICC’s inability to pay the corporate taxes imposed on the cricket body by the British government. Not caring for the fact that having the offices of international sports and games on its land is a matter of pride for a country, the British government has been highly rigid in its taxation policy. On account of its miserly attitude against sports bodies, during the last decade or so, rugby moved to Ireland, athletics to Monaco, table tennis to Switzerland, badminton to Malaysia and now cricket packing up its kit bags for Dubai. Surprisingly, the Minister for Sports feels no pinch about it.

It may be noted that the ICC has a staff of 45 persons and a budget of only $10 millions, peanuts from today’s commercial standards, especially when the body has to provide development funds to countries where the game is yet in its infancy. While the English cricket establishment felt the importance of the ICC to remain in England and the government instrumentalities also favoured the grant of exemption from corporate taxes, to the ICC, but the treasury did not budge from its stand.

Further, Gulf News noted that a large percentage of staff salaries disappears in taxes in London.

http://www.dailytimes.com.pk/default.as ... 2005_pg2_9

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Re: Perspectives on the global economic meltdown

Postby John Snow » 08 Apr 2009 01:11

Dubai like dollar will not see demise very soon.

Dubai is the play ground for all mafia, human trafficking, monbey laundring, all spooks and arms dealers to have deals while having the taste best whiskey and whores. The sheik has Dawood like chota sheikhs all around.

The west needs it the east needs it that where east meets west and money move slowly from there toi Isle of man banks, bhama banks and swiss banks.

Most importantly like the south in the union, its well built on slave labour, and such labour is abundant in supply...

so go slow on death warrant of Dubai, bahi log.

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Re: Perspectives on the global economic meltdown

Postby Stan_Savljevic » 08 Apr 2009 01:54

South Korean Students, Hit Hard by Currency Declines, Opt to Stay Home
http://chronicle.com/daily/2009/04/1535 ... _medium=en

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Re: Perspectives on the global economic meltdown

Postby Chinmayanand » 08 Apr 2009 02:04

Great article on Dubai !!! The writer has laid bare Dubai, as it is.

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Re: Perspectives on the global economic meltdown

Postby Singha » 08 Apr 2009 10:47

BW:-

Economist Nouriel Roubini lashes out at CNBC host

By ROB GILLIES

TORONTO

CNBC's Jim Cramer has another feud on his hands.

Just weeks after "The Daily Show" host Jon Stewart took Cramer to task for trying to turn finance reporting into a "game," famous bear economist Nouriel Roubini criticized the host of CNBC's "Mad Money" on Tuesday for predicting bull markets.

"Cramer is a buffoon," said Roubini, a New York University economics professor often called Dr. Doom.

"He was one of those who called six times in a row for this bear market rally to be a bull market rally and he got it wrong. And after all this mess and Jon Stewart he should just shut up because he has no shame," Roubini said.

Cramer recently wrote in a blog that Roubini is "intoxicated" with his own "prescience and vision" and said Roubini should realize that things are better since the stock market hit bottom in March. U.S. stocks have increased 26 percent since.

Roubini said in 2006 that the worst recession in four decades was on its way. He has attracted attention for his gloomy -- and accurate -- predictions of the U.S. financial market meltdown.

Roubini said the latest surge is another bear market rally and that Cramer should keep quiet.

"He's totally lost any credibility and he's a buffoon. He's not a credible analyst and he got it wrong six times in a row. Every time it was a bear market rally he said it was the beginning of a bull and he got it wrong," Roubini said in an interview with The Associated Press before he appeared at a Toronto event entitled "A Night with the Bears."

"Other people would just shut up and he keeps saying that same stuff. It's just nonsense."

Cramer has conceded he made some wrong calls, like most people watching the market. But he went on "Today" last October telling people that if they needed money in the next five years, take it out of the stock market. Anyone who heeded that advice saved money, he said.

Roubini said he supports Treasury Secretary Timothy Geithner's plan to remove toxic assets from the banks. Cramer recently wrote that Roubini and Nobel laureate New York Times columnist Paul Krugman are both on "the nationalization jihad."

"He keeps insulting me personally and saying a bunch of lies," Roubini said.

Roubini made the comments before appearing with bank anyalst Meredith Whitney and Canadian bears Ian Gordon and Eric Sprott. They all correctly predicted the financial meltdown.

Whitney, among the most bearish bank analysts, said that some of the 19 banks undergoing U.S. government stress tests may not pass.

"I think the big banks will get through and some of the smaller banks may not," Whitney said in interview with The AP.

Sprott, a Canadian hedge fund owner, said systemic risk remains and investors should buy gold. Before the event, the organizers showed a video of bears to the predominantly business crowd.

One man in a suit joked that it was like watching a horror movie.

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Re: Perspectives on the global economic meltdown

Postby Neela » 08 Apr 2009 13:14

vsudhir, please check the email address you provided.


Cheers

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Re: Perspectives on the global economic meltdown

Postby IndraD » 08 Apr 2009 16:37

what baffles me is that why mostly people from Kerala are in UAE. If you move around most of the malls have Keralites attendants and junior managers . Why there are not people from Delhi or Calcutta working in equal number in gulf. I don't think WB is any better in GDP/general income etc than Keral. But they prefer to stay in WB. I feel pathetic when I hear about Keralites being treated badly there by gulf people but former are to blame only, unless you respect yourself the other person won't.

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Re: Perspectives on the global economic meltdown

Postby shyamd » 08 Apr 2009 20:30

Dubai doesn't have much oil deposits or Gas (the dubai royals don't really have that much money). That stuff is in the neighbouring emirates. It just took tonnes of loans to fund all the projects. The image of Dubai being an oil based economy is just PR. It is only neighbouring emirates that are the real oil/gas based economies. The elite of Dubai never invested in real estate (they knew that these AQ people that they were funding will turn on them any time), so they haven't lost much. Dubai made the big name only because of its port, emirates airlines and other stuff such as prostitution, base for financial operations, mafia, arms dealers (and all assorted wheeler dealers), healthcare, etc. The whole dubai image in the world media is actually managed by this lebanese lady (can't remember then name).

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Re: Perspectives on the global economic meltdown

Postby Singha » 08 Apr 2009 20:46

I think its the inductive effect that also makes lot of punjab/haryana/delhi people emigrate to english speaking countries in very large number.

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Re: Perspectives on the global economic meltdown

Postby IndraD » 08 Apr 2009 21:01

Singha wrote:I think its the inductive effect that also makes lot of punjab/haryana/delhi people emigrate to english speaking countries in very large number.


At least when you are going to an english speaking country, you get some level playing after some time. There is free judiciary, press and you can protest against your employer and you will not be killed. Yes there is racism every where. But what do you get in gulf other than money. Why waste years and years at such place which wouldn't give you citizenship even after 25 years of stay and which follows dictatorship.

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Re: Perspectives on the global economic meltdown

Postby vsudhir » 08 Apr 2009 23:53

Mish is on a roll today. Deflation is here to stay a while and it ain't looking good.....

Bernanke's Deflation Preventing Scorecard

In case no one is keeping track, Bernanke has now fired every bullet from his 2002 “helicopter drop” speech


1. Reduce nominal interest rate to zero. Check. That didn’t work...
2. Increase the number of dollars in circulation, or credibly threaten to do so. Check. That didn’t work...
3. Expand the scale of asset purchases or, possibly, expand the menu of assets it buys. Check & check. That didn’t work...
4. Make low-interest-rate loans to banks. Check. That didn’t work...
5. Cooperate with fiscal authorities to inject more money. Check. That didn’t work...
6. Lower rates further out along the Treasury term structure. Check. That didn’t work...
7. Commit to holding the overnight rate at zero for some specified period. Check. That didn’t work...
8. Begin announcing explicit ceilings for yields on longer-maturity Treasury debt (bonds maturing within the next two years); enforce interest-rate ceilings by committing to make unlimited purchases of securities at prices consistent with the targeted yields. Check, and check. That didn’t work...
9. If that proves insufficient, cap yields of Treasury securities at still longer maturities, say three to six years. Check (they’re buying out to 7 years right now.) That didn’t work...
10. Use its existing authority to operate in the markets for agency debt. Check (in fact, they “own” the agency debt market!) That didn’t work...
11. Influence yields on privately issued securities. (Note: the Fed used to be restricted in doing that, but not anymore.) Check. That didn’t work...
12. Offer fixed-term loans to banks at low or zero interest, with a wide range of private assets deemed eligible as collateral (…Well, I’m still waiting for them to accept bellybutton lint & Beanie Babies, but I’m sure my patience will be rewarded. Besides their “mark-to-maturity” offers will be more than enticing!) Anyway… Check. That didn’t work...
13. Buy foreign government debt (and although Ben didn’t specifically mention it, let’s not forget those dollar swaps with foreign nations.) Check. That didn’t work...


scary onlee.

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Re: Perspectives on the global economic meltdown

Postby ramana » 09 Apr 2009 04:51

Old e-mail dated june 16 2007

It's Official: The Crash of the U.S. Economy has begun
http://globalresearch.ca/index.php?context=va&aid=5964

Quote:
It's official. Mark your calendars. The crash of the U.S. economy has
begun. It was announced the morning of Wednesday, June 13, 2007, by
economic writers Steven Pearlstein and Robert Samuelson in the pages
of the Washington Post, one of the foremost house organs of the U.S.
monetary elite.

Pearlstein's column was titled, "The Takeover Boom, About to Go Bust"
and concerned the extraordinary amount of debt vs. operating profits
of companies currently subject to leveraged buyouts.

In language remarkably alarmist for the usually ultra-bland pages of
the Post, Pearlstein wrote, "It is impossible to predict when the
magic moment will be reached and everyone finally realizes that the
prices being paid for these companies, and the debt taken on to
support the acquisitions, are unsustainable. When that happens, it
won't be pretty. Across the board, stock prices and company valuations
will fall. Banks will announce painful write-offs, some hedge funds
will close their doors, and private-equity funds will report
disappointing returns. Some companies will be forced into bankruptcy
or restructuring."

Further, "Falling stock prices will cause companies to reduce their
hiring and capital spending while governments will be forced to raise
taxes or reduce services, as revenue from capital gains taxes
declines. And the combination of reduced wealth and higher interest
rates will finally cause consumers to pull back on their debt-financed
consumption. It happened after the junk-bond and savings-and-loan
collapses of the late 1980s. It happened after the tech and telecom
bust of the late '90s. And it will happen this time."

Samuelson's column, "The End of Cheap Credit," left the door slightly
ajar in case the collapse is not quite so severe. He wrote of rising
interest rates, "As the price of money increases, borrowing and the
economy might weaken. The deep slump in housing could worsen. We could
also discover that the long period of cheap credit has left a nasty
residue."

Other writers with less prestigious platforms than the Post have been
talking about an approaching financial bust for a couple of years.
Among them has been economist Michael Hudson, author of an article on
the housing bubble titled, "The New Road to Serfdom" in the May 2006
issue of Harper's. Hudson has been speaking in interviews of a "break
in the chain" of debt payments leading to a "long, slow economic
crash," with "asset deflation," "mass defaults on mortgages," and a
"huge asset grab" by the rich who are able to protect their cash
through money laundering and hedging with foreign currency bonds.

Among those poised to profit from the crash is the Carlyle Group, the
equity fund that includes the Bush family and other high-profile
investors with insider government connections. A January 2007
memorandum to company managers from founding partner William E.
Conway, Jr., recently appeared which stated that, when the current
"liquidity environment"—i.e., cheap credit—ends, "the buying
opportunity will be a once in a lifetime chance."

The fact that the crash is now being announced by the Post shows that
it is a done deal. The Bilderbergers, or whomever it is that the Post
reports to, have decided. It lets everyone know loud and clear that
it's time to batten down the hatches, run for cover, lay in two years
of canned food, shield your assets, whatever.

Those left holding the bag will be the ordinary people whose assets
are loaded with debt, such as tens of millions of mortgagees, millions
of young people with student loans that can never be written off due
to the "reformed" 2005 bankruptcy law, or vast numbers of workers with
401(k)s or other pension plans that are locked into the stock market.


Should have listened to it :(

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Re: Perspectives on the global economic meltdown

Postby vsudhir » 09 Apr 2009 08:58

Protest against use of Indian steel in Obama's home state

Protectionism? What is that anyway?

An excellent, scintillating piece from Bill Buiter. Recommended read, IMHO.

The green shoots are weeds growing through the rubble in the ruins of the global economy

Clarity, simplicity, perspective!

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Re: Perspectives on the global economic meltdown

Postby Dhaval_D » 09 Apr 2009 09:13

Reading about Dubai’s problems gives me the most profound feeling of satisfaction. The Emirati animals deserve to suffer a lot more than what they’re getting.

Dubai's ruler accused of slavery
Dubai: Land of Luxury, Land of Slavery

Here's some good stuff:
Dubai Real Estate Crash
Dubai's Little Secret
Dubai Bubble Burst

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Re: Perspectives on the global economic meltdown

Postby John Snow » 09 Apr 2009 21:02

Sudhir garu and Vina garu


Pointing to a non-negligible risk of sovereign default in the US and the UK does not, I fear, qualify me as a madman. The last time things got serious, during the Great Depression of the 1930s, both the US and the UK defaulted de facto, and possibly even de jure, on their sovereign debt.

In the case of the US, the sovereign default took the form of the abrogation of the gold clause when the US went off the gold standard (except for foreign exchange) in 1933. In 1933, Congress passed a joint resolution canceling all gold clauses in public and private contracts (including existing contracts). The Gold Reserve Act of 1934 abrogated the gold clause in government and private contracts and changed the value of the dollar in gold from $20.67 to $35 per ounce. These actions were upheld (by a 5 to 4 majority) by the Supreme Court in 1935.

In the case of the UK, the de facto sovereign default took the form of the conversion in 1932 of Britain’s 5% War Loan Bonds (callable 1929-1947) into new 3½ % bonds (callable from 1952) on terms that were unambiguously unfavourable to the bond holders. Out of a total of £2,086,000,000 outstanding, £1,500,000,000, or something over 70%, was converted voluntarily by the end of 1932, thanks both to the government’s ability to appeal to patriotism and joint burden sharing in the face of economic adversity and to ferocious arm-twisting and ‘moral suasion’.

I believe both defaults were eminently justified. There is no case for letting the interests of the holders of sovereign debt override the interests of the rest of the community, regardless of the financial, economic, social and political costs involved. But to say that these were justifiable sovereign defaults does not mean that they were not sovereign defaults. Similar circumstances could arise again.


Who should be worried naturally Image Hu.

Also note the supreme irony, the least risk (sovereign debt of T bills) become the most risky!

Hence the saying

"Till you build strong trust you cant cheat" Spinster Uvacha :mrgreen:

Rest
"In God We trust"

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Re: Perspectives on the global economic meltdown

Postby vsudhir » 10 Apr 2009 05:06

Today's D&G rollcall...

Consumer Spending to Drop Again

U.S. consumer spending will falter after a first-quarter spurt and recover only gradually toward the end of the year, a monthly Bloomberg News survey showed.

Purchases will drop at a 0.5 percent pace from April to June and grow at an average 0.9 percent rate the next six months, according to the median of 51 projections in a survey taken from March 30 to April 8. The estimated 0.5 percent first-quarter gain would break the longest slide since 1991.

Soaring unemployment and tattered household finances are forcing Americans to pay off debt and save more, preventing the economy from gaining traction. What’s shaping up to be the worst global recession in the postwar era means companies are also cutting back and foreigners are buying fewer U.S.-made goods.

“We are going to have an economic recovery, but it won’t feel like one most of us are used to,” said John Silvia, chief economist at Wachovia Corp. in Charlotte, North Carolina.


Sotheby’s Hong Kong Auction Total Drops by Half as Buyers Stall

"Anyone who proposes that art is a store of value in this environment is either a fool or talking their book."


Empty Tables Threaten Some Restaurant Chains.

During a decade of easy credit and loose spending, American businesses built too many cars, houses, stores and factories. It turns out the country built too many restaurants, too.

Now consumers are cutting back, and dining out is among the casualties. Finer restaurant chains have been hit hard, and so have the casual sit-down places that flooded suburban shopping centers and tourist districts across the country, aimed straight at middle American tastes.

A few chains have boarded up already. Many others are going into survival mode, trying to renegotiate their loans, cutting staff, offering bargains to customers and closing less profitable restaurants. Analysts predict thousands more restaurants could close in the next year or two.

Since 1990, the number of restaurants and bars has grown to 537,000 from 361,000, a 49 percent increase, according to the National Restaurant Association. Population in the United States grew 23 percent in that period.

Amid the seeming prosperity of a credit-fueled era, people got in the habit of eating more and more of their meals out. The association’s statistics show that 48 cents of every food dollar is now spent at restaurants, compared with 40.5 cents per dollar in 1985.

Bob Goldin, executive vice president at Technomic, a Chicago consultancy for the restaurant industry, predicted that more than 20,000 restaurants would close over the next three years.

“I think 20,000 is a minimum,” he said. “We probably need more than that. There are a lot of marginal players out there.”


Vacated Midtown Manhattan Offices May Not Be Leased

Midtown Manhattan, the most expensive U.S. office market, had 10 million square feet of sublease space available at the end of March, 70 percent of which might not be leased, CB Richard Ellis Group Inc. said.

Space being relinquished by financial-services firms and other companies weathering the recession is coming up for sublease with short-term expiration dates that make the properties unattractive to new tenants, said John Powers, New York tri-state chairman for real estate broker CB Richard Ellis. About 7 million square feet of sublets are “effectively unleasable,” he said.

“It’s a big problem for the tenant, because the tenant’s got an obligation they don’t want,” Powers said today at a press briefing. “From the landlord’s view, no landlord likes to have a lot of sublease space in their building, and there’s no question it’s an overhang on pricing.”


The big apple's fall is creating many newtons out in Manhattan - newly wizened prodigies.

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Re: Perspectives on the global economic meltdown

Postby vsudhir » 10 Apr 2009 05:08

John snow garu,

In Buiter's article, moi found the description of state control extremely interesting onlee. And yes, moving away at will from the gold standard was always == sovereign default in my book.

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Re: Perspectives on the global economic meltdown

Postby John Snow » 10 Apr 2009 07:15

I am nobody but If I were who :mrgreen: to prevent people revolution

Devalue yuan by 20%
Dump PRC made goods world wide
Pay for Oil in $$$
But do barter business for all things
Concentrate on diversifying trade with Africa and Latin America.
Export AK 47 to Columbia and Mexico
and much more

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Re: Perspectives on the global economic meltdown

Postby vsudhir » 10 Apr 2009 07:34

Giving Corporate Credit Its Due

In a forthcoming paper in the Journal of Monetary Economics [economists Simon Gilchrist and Vladimir Yankov at Boston University, and Egon Zakrajsek at the Federal Reserve] show that spreads on low- to medium-risk corporate bonds, particularly those with 15 or more years until maturity, predicted changes in the economy phenomenally well, forecasting the ups and downs in both hiring and production a year before they occurred. Since writing the paper, they extended their analysis back to 1973 and found bonds' predictive ability still held.

With the massive widening in corporate-bond spreads last fall, the economists' model predicts industrial production will fall another 17% by the end of the year, and the economy will lose another 7.8 million jobs on top of the 5.1 million it has shed since the recession began.


This wont be pretty and thats pretty much guaranteed.

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Re: Perspectives on the global economic meltdown

Postby ss_roy » 10 Apr 2009 07:47

I read about the dubai thing.. nothing surprising, but I found one thing lacking in almost all comments I read on many sites.

If Indians really hate being treated like that, why not do something about it? I mean.. the whole emirati population could be in eliminated in less than a few hours.. or a few days.. depending on the methods used. But governments of countries like India keep on sucking up to those frauds.. what can I say.

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Re: Perspectives on the global economic meltdown

Postby Viv Sreenivasan » 10 Apr 2009 08:58

Um....how do you want to get rid of them?? Nuke Dubai? Are you on something strong SS_Roy?

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Re: Perspectives on the global economic meltdown

Postby ss_roy » 10 Apr 2009 10:45

Why not? That is one possibility.

You would not think twice before taking an antibiotic for an infection? If you do not see your opponent as human, it does not matter.

how do you want to get rid of them?? Nuke Dubai?

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Re: Perspectives on the global economic meltdown

Postby vsudhir » 10 Apr 2009 17:48

‘Lehman Shock’ Fuels New Wave of Homeless in Osaka

Japan hit by homelessness wave? Japan??

Miki’s loss of housing shows how Japan’s 2.95 million unemployed people threaten to fuel a rise in homelessness. Prime Minister Taro Aso may unveil a 15.4 trillion yen stimulus package tomorrow, according to a document obtained by Bloomberg News. Finance Minister Kaoru Yosano said April 6 the package will include a new social safety net for non-regular workers.

Yosano didn’t specify what help would be given to the lower-paid temporary or part-time workers. They accounted for 34.5 percent of Japan’s 55.3 million employed in September 2008 compared with 24 percent in 1999, official data show.

Japan’s jobless rate will soar to a record of 5.7 percent by the end of March 2010 after reaching a three-year high of 4.4 percent in February, according to a Bloomberg survey of 11 economists. That’s the highest since 1953 when records began. Companies from Toyota Motor Corp. to Sony Corp. are firing thousands of workers and reducing output as Japan’s exports plunged a record 49.4 percent in February.

“We’re seeing a crisis situation here,” said Martin Schulz, a senior economist at Fujitsu Research Institute in Tokyo. “The spike in unemployment is much faster, and younger people have much less of a buffer.”

Many are temporary workers like Miki who find themselves in a downward spiral with little savings and an inadequate welfare system to fall back on, said Michihiko Okino, secretary-general of a nonprofit group that manages a homeless shelter in Osaka.


Terrible.


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