Last month Dubai rocked financial markets by seeking to restructure is $26 billion of debt. Today Abu Dhabi stepped in to save the day with a $10 billion dollar loan.
For Market Watch:
TOKYO (MarketWatch) -- Dubai said Monday that it has received $10 billion in financing from fellow emirate Abu Dhabi, which it will use to pay part of the debt held by conglomerate Dubai World and its property unit Nakheel.
Of the total, $4.1 billion will be used to repay Nakheel's Islamic bond maturing Monday, while the rest will be used to finance Dubai World's obligations through the end of April 2010. MOREI have been following this story offline, because I was curious what happens when a nation could not meet its financial obligations. As we all watch Obama and Congress rack up obscene debt, raise debt levels and pump trillions into the market from the Feds, one has to wonder what will happen when the USA cannot meet its financial obligations.
At $12 trillion and rising, I fear there is no Abu Dhabi that can rescue us. China is already sending signals of uneasiness about our reckless spending. Who else is there who can come in and save the day for America’s foolishness? I am hard pressed to see an answer.
Via: Market Watch