Andrew Ducker (andrewducker) wrote,
Andrew Ducker

Dubai defaults on its debts

If it was just a large Dubai-based company then I wouldn't be that surprised - but this is the largest government owned investment company in Dubai.

An awful lot of expansion over the last 15 years has been based on debt - and we're going to be seeing more and more of it unwind.  Which is what happens when your model is based on getting into debt and then paying it off faster than the interest mounts up - you live on the edge, balancing incomings against outgoings on a constant basis.  The longer the recession lasts the more companies will be pushed over that edge.

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