Hearing of enthusiastic property development plans for the world's tallest building? Then dust off, perhaps, an old but maybe not so tongue-in-cheek leading indicator...






The 92 metre Masonic Temple, Chicago. Completed in 1892 shortly after the largest quarterly contraction of GNP in US history.









The 119 metre Park Row building, New York. Complete in 1898 and preceded by the 4th largest quarterly decline in real GNP over the period of 1875-1918.










The 187 metre Singer building (completed in 1908) and the 247 metre Metropolitan Life building (1909), New York. Products of the period leading up to the Panic of 1907.










The 283 metre (includes the spire) 40 Wall Street building (completed 1929),










the 282 metre Chrysler building (1930),











and the 381 metre Empire State building (1931). Unpleasant little associations with the Great Depression.












The 417 metre Twin Towers (1972/73) and the 442 metre Sears Tower (1974) just in time for stagflation.











The 452 metre Petronas Tower (1997) stamped the mark of the Asian Crisis.












The 509 metre Taipei Financial Center, Taiwan. Complete in 2004 but born of the 1999 Tech Wreck.









And, finally (for now), all 818 metres of the Burj Dubai Tower which is due for completion in early 2010. Abu Dhabi permitting.







NB: (Inspired by Andrew Lawrence's The Skyscraper Index: Faulty Towers! Property Report, Dresdner Kleinwort Benson Research (January 15, 1999a) and Mark Thornton's Skyscrapers and Business Cycles [The Quarterly Journal of Austrian Economics. Vol. 8, No.1, Spring 2005. pp. 51-74.])

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Light week-end relief for anyone taking seriously requests for China-Land-of-Over-Capacity to revalue upwards:


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Amazon is not reporting an increase in sales of Percy’s sonnets but it is looking like Shelley can add “market sage” to a cv already boasting the achievements of “renowned romantic poet” and “over enthusiastic practitioner of free love”.

In some places (one example of several) Dubai's predicament is being described as a “black swan”. This cannot be right on any reasonable reading. For example, over a year ago - September 19, 2008 - Jim Chanos appeared on Bloomberg and declared “if I could short Dubai I’d short it” (8’59”). The SEC have not tried to pin the current woes on him partly due to jurisdiction limitations but also because the menace of a default "standstill request" has simply been out there for a long time.

No, what we have here is another episode in the Waiting for the Wheels to Fall Off game. Unsurprisingly, investors appear to have been encouraged in this by dissembling Emirates authorities with a separate agenda.

This piece outlines that point and some of the reaction retrospection permits. But, when intelligent people with Other People’s Money allow their hopes to obscure reality, quotes from that article such as “The credibility of these guys has been found wanting” tend to cut both ways. It is the price of optimism and faith in today's “anti-market at any cost” dogma of financial crisis management.

The growth of Dubai City has long seemed unsustainably anti-financial, unsustainably anti-nature (UAE ranking, page 14 - I know everyone like to beat the US but this is ridiculous) and anti-“guest worker”.

Revisiting the model is surely no bad thing.

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For a place where the widespread use of postdated cheques represents a dangerous form of unofficial, unregulated credit expansion; and bouncing such cheques is a criminal offense (interesting comments at the foot of this TimeOut Dubai piece) it is painfully ironic that the Emirate now requests a little understanding on a cultural more as sensitive as that of the importance of honouring one's obligations.

Barclays Capital will certainly wonder about Fate's sharp gag writers. A scant 3 weeks ago they considered Dubai sovereign debt "attractively priced at current levels". Well, it's an even bigger bargain today (excluding insurance costs described by some as "overblown").

Barclays, along with Credit Suisse, Lloyds, HSBC (seen last month describing the debt liabilities of related Dubai government companies as "reasonable"), Royal Bank of Scotland and Deutsche Bank, is one of the lenders caught in the dilemma of finding a way through potential losses whilst maintaining precious (for future business) relational ties. And talking its own book does not seem to have done the trick.

In sum, this might prove a story just getting started as both the US Thanksgiving and Islamic Eid al-Adha breaks guarantee that matters marinate until next week.

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Contrary to earlier reports from some Dubai government related entities, notably 31.2% publicly owned Emaar Properties whose tallest-in-the-world handy work is pictured below, it not only seemed a bad idea at the time. It, sadly, was.


Symbolic bragging rights don't come cheap or, generally, in non-pyrrhic packaging.

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As I was being physically crippled during a squash match last week (albeit on a deferred by 24 hours basis) I was lucky enough to have an opponent who competed with the spirit of that vague notion “fair play”. In past matches I have had the dodgy score-keeping opponent; the opponent who regards the let rule as secondary to the chance to get a blindside tackle in; and the screaming, cursing racquet smasher.

It was the day following France’s qualification for the World Cup courtesy of a neat piece of final moments, illegal control by the team’s skipper, Thierry Henry. The referee did not see it (officials missed an even more obvious offside from the kick that led to it) and – voilà it’s not Guinness but something pétillant all round.

Post-match the line of Raymond Domenech, the French manager and a man who allegedly puts astrology at the centre of his life, was “Let me enjoy this happiness!” Unsurprising for a guy whose reaction to being dumped out of Euro 2008 was to ignore questions about his future as manager and instead thought the moment romantic enough to ask journalist Estelle Denis to marry him. This has done little harm to his standing as a figure of fun:

Lorsque Raymond Domenech perd, il demande la main d’Estelle Denis.

Lorsque Raymond Domenech gagne, il demande la main de Thierry Henry.

But Domenech was right – enjoy it for his team played the system and won. The cast-iron logic was provided by the head of French football and boiled down to “it cuts both ways, that’s how it is, how it has been – and, by the way, accords to the structure in place”.

This is a good defence, one that transcends sport. Precedent is important. So important that, once installed alongside codification, “individual responsibility” becomes an idea of ridicule and “paying the consequences” an acceptable risk. Those are things for a third party to assess and levy.

As the handy Thierry Henry said, “I am not the referee”. It is the professional footballer’s (strangely familiar) Safe Habor statement, a shield and an invitation to deceive.

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It happens. No number of referees and/or linesmen can stop it.




Have a Good Weekend!

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