Friday, January 23, 2009

Gettin' Out While the Gettin's Good

The speed and ferocity of the worldwide economic flameout is amazing, even for those of us who have been screaming about the imbalances that built up over the last decade or so (or longer, depending on your views).

Dubai is another of those very important canaries in the coal mine. The thumps you hear as they hit the floor of their cages is beginning to sound like machine gun fire. I was tempted to take a gig in Dubai ~ 18 months ago. Glad I passed.

Indians flee Dubai as dreams crash
Mumbai/DUBAI - JAN 14: It's the great escape by Indians who've hit the dead-end in Dubai.Local police have found at least 3,000 automobiles -- sedans, SUVs, regulars -- abandoned outside Dubai International Airport in the last four months. Police say most of the vehicles had keys in the ignition, a clear sign they were left behind by owners in a hurry to take flight.

The global economic crisis has brought Dubai's economic progress, mirrored by its soaring towers and luxurious resorts, to a stuttering halt...

...Mumbai resident D Nair (name changed) had been living in a plush highrise in Sharjah for the past four years. However, the script went horribly wrong when his contract was terminated. Nair used all his credit cards to their maximum limit, shopping for people back home. He then discarded his Honda Accord before returning to India for good. Nair, who stays in a rented apartment in Navi Mumbai today, has a Rs15 lakh loan with a Dubai bank.

Another such victim of the meltdown said he bid goodbye to his car in a small bylane near the airport and hailed a cab. "I was scared because a number of us were doing the same and did not want to be questioned by the police. There was no way I could afford to pay the EMI of 1100 Dhirams for my Ford Focus," he told DNA on condition of anonymity.

When contacted, the dealer for Asgar Ali cars in Sharjah said, "We are helpless and do not know how to tackle this issue. A large number of such owners are from Indian, Sri Lanka, Bangladesh and other South Asian countries."

Considering the treatment that guest workers have received in the past in the oil sheikhdoms, these men and women are probably making a very rational choice to get out quickly. What will these folks do back home? What will happen to the ones who haven't fled or can't afford to get back to their homes?

Hat tip to Mike Ruppert for the link.

Why do we care?

Mainly this is just another interesting anecdote. However, it does shed serious light on the shifting psychology in what has been a very dynamic part of the world over the last decade or so (read - petro economies juiced by war, soaring petroleum prices until last year, and all sorts of money laundering of gray and black money flows from the region).

Mood makes markets. Psychology rules all.

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