Showing posts with label Dubai. Show all posts
Showing posts with label Dubai. Show all posts

Dubai sovereign debt fears

SUBHEAD: Dubai Group $10 billion talks with debtor banks loses support of British banks.

 By Stefania Bianchi on 10 July 2012 for Bloomberg News - 
(Ihttp://www.bloomberg.com/news/2012-07-09/dubai-group-10-billion-talks-said-to-lose-rbs-support.html)


Image above: A billboard advertises Dubai Properties, part of Dubai Holding, in Dubai, United Arab Emirates. From original article.


Royal Bank of Scotland Group Plc (RBS), Commerzbank AG and Standard Bank Group Ltd. abandoned talks with Dubai Group to restructure $10 billion of debt after failing to reach an agreement, two people familiar with the matter said.

The banks are dissatisfied with progress after 18 months of talks with the investment company, according to the people, who asked not to be identified because the discussions are private. RBS stepped down as co-chair of the coordinating committee of mostly unsecured lenders in the talks, one of the people said.

Dubai Group, controlled by Dubai Holding LLC, is among several government-owned companies in the Middle Eastern emirate seeking to restructure loans after property and asset values slumped and credit markets froze. The breakdown in talks comes after Dubai International Capital LLC reached an agreement with lenders to change terms on $2.5 billion of debt in April and Drydocks World LLC said creditors support restructuring plans. “The divide between Dubai Group and its lenders was too wide to bridge,”

Ahmad Alanani, Middle East director at Exotix Ltd. in Dubai, wrote today in emailed comments. “I wouldn’t be surprised if more lenders join the ranks of RBS, Commerzbank and Standard Bank in a bid to increase pressure on the company.” A spokeswoman for Dubai Group, who asked not to be named because of company policy, said it’s still seeking to reach an agreement. Standard Bank won’t comment because of client confidentiality issues, Erik Larsen, a spokesman for the Johannesburg-based lender, said by telephone. Martin Halusa, a spokesman for Frankfurt-based Commerzbank AG, declined to comment.

Reuters reported yesterday that the three banks abandoned talks with Dubai Group.

Dubai, home to the world’s tallest tower and an indoor ski slope, roiled global markets in 2009 when Dubai World, one of the sheikhdom’s three main state-controlled holding companies, announced plans to delay payments. The emirate received a $20 billion loan from the United Arab Emirates’ central bank, the Abu Dhabi government and its banks to help it surmount the global credit crisis and the real estate crash.

Dubai World reached a deal in March 2011 with about 80 banks to delay payments on $25 billion of debt. Dubai International Capital, the owner of Travelodge Ltd., reached an accord to alter terms of $2.5 billion of liabilities in April.

Drydocks World LLC, which owns the Middle East’s biggest shipyard in Dubai, received approval from an “overwhelming majority” of creditors for its $2.2 billion debt restructuring proposal, the state-controlled company said April 5.

Group appointed eight banks to represent creditors in two committees in 2011 to negotiate the terms on $6 billion of bank debt, with $4 billion owed to other investors. Paris-based Natixis SA’s Nexgen unit and Mashreqbank PSC (MASQ) of Dubai make up the committee of secured lenders. RBS and Emirates NBD PJSC (EMIRATES) were leading the group of partially-secured and unsecured lenders.

Dubai Group invests in financial services and owns property in the U.S., according to its website. It holds stakes in companies including Dubai-based investment bank Shuaa Capital PSC, Cairo-based investment bank EFG-Hermes Holding SAE and BankMuscat SAOG in Oman.

The company proposed paying interest of 1 percent to 2.5 percent in a $6 billion debt restructuring proposal, three people familiar with the plan said in April. Secured creditors, whose loans are backed by assets, will be repaid principal in three years, according to the people. Banks that offered partially secured and unsecured loans will be returned principal in 12 years and receive additional interest at the end of the loan term, they said.

“The restructuring was complex and with no government support many of Dubai Group’s lenders felt disenfranchised,” Exotix’s Alanani said.


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The Bat Signal

SUBHEAD: Examining the gusher too closely is dangerous, it leads to examining the consumption/waste context that it inhabits.

By Steve Ludlum on 15 June 2010 in Economic Undertow -
(http://economic-undertow.blogspot.com/2010/06/at-cross-purposes.html)

 
Image above: The bat signal spotlight on roof in Gotham. From (http://s138.photobucket.com/albums/q279/peter123_010/BATMAN%20BEGINS/The%20Dark%20Knight/?action=view&current=000prd6t.jpg).

While the oil gusher in the Gulf of Mexico attracts attention away from finance and the gangrenous Eurozone economy the overall situation quietly and steadily deteriorates. The Yanks, the Brits, the Chinese and the Euro bosses have all painted themselves into the same policy corner. The reaction to any steps administrators take is going to make things worse.

On display is the collective lack of imagination on the part of economic policy makers. Blindly repeating 'Keynes Lite' is not making policy.

 The reflation of aggregate demand has morphed into support for the monetary elite! The best the brain trust can come up with is deflation; crush the little guy while pampering the rich. People have the gall to call this out- and- out bank robbery Keynesianism.

Nobody can think of anything else to do. If the money plug is pulled the scaffolding of overextended credit will collapse. Our credit regime is a ponzi dynamic. It constantly requires new money to survive. If the plug is not pulled, the money cost becomes ruinous. There are no simple solutions to the dilemma, no easy middle ground. 

What is absurd is that thousands of highly educated, highly paid specialists are poring over the same small patch of middle ground with magnifying glasses looking for that magical easy solution. It's like the locked- out man looking for his house keys under the streetlight:
"Why are you looking here when your house is over there?" "Because this is where the light is."
The Gusher in the Gulf illuminates the lack of courage and imagination of US policy makers. Heaven forbid that any suggest that Americans begin the process of getting out from behind the wheel, to abandon their daytime roles as dumb machine operators.

The policy is bent toward hiding the truth about the Gusher as much as possible; this policy being shared by BP, the government and the consumers of BP's products.

To examine the gusher too closely is dangerous, it is but a small step toward examining the consumption/waste context that the gusher inhabits. A conservation plan would cut the drain of currency flowing away from the developed world toward the energy producers (and energy marketers like BP).

These funds could be diverted toward more remunerative investments that don't issue waste as the primary product. The US has a lot of low-hanging energy consumption fruit. Cutting 10% of energy use would be little more than an inconvenience.

A conservation plan would ironically be the easy way, the step leading toward greater efficiencies, the development of 'conservation industries' and would show the rest of the developed world a way out of its hopeless corner. The president does not mention conservation. It's ridiculous!

 If the Americans were serious about the Gusher, they would boycott BP products. Hit 'em in the wallet while they are down. Consumers must realize that they - not anyone else - will be saddled with the massive and expanding cleanup costs, as well as costs associated with the moratoria- driven decline of available deepwater crude. Since prices cannot rise - everyone is broke - allocation away from goods and services toward fuel will take place. Less goods and services sold means fewer jobs, declining demand and ... the vicious cycle of deflation intensifies. We are in a situation where the choice is to work at a good job ... or drive a car. How can this be a choice? What's deflating is our 'Blessed way of life'. In keeping with the President's tepid address yesterday the efforts at keeping appearances are returning less and less. Stoneleigh observes the turning of the screw:
Fannie Mae and Freddie Mac are to be delisted from the NYSE. Stocks on the exchange must either act to boost the share price or delist if they show an average share price below $1 for over 30 days, which has been the case for Fannie Mae. It's hardly surprising that the companies should be perceived as virtually worthless, considering that they preside over about half ($5.5 trillion) of a mortgage market in terrible trouble. Moving away from even the limited accountability of public listing is also no surprise. Confidence games require reality to be obscured for as long as possible. While the move is being spun, especially in the case of Freddie Mac, as compatible "with a goal of conservatorship and the preservation and conservation of assets", in reality there is little future value to protect. Taxpayers have pumped in $145 billion already, as the alternative would have been a property price collapse. That is still clearly on the cards if support were to be withdrawn, hence the unlimited nature of the guarantee that has been offered, meaning unlimited liability for the taxpayer. Again, brain lock on the part of administrators, who are terrified of asking bankers to take their lumps. Of course, as bankers are intertwined into all aspects of modernity - credit being the lubricant of the future pulling time machine - they hold the productive parts of the economy hostage: As John Stuart Mill observed, "Panics do not destroy capital, they merely reveal the extent to which it has already been destroyed by betrayal into hopelessly unproductive works." The construction of much of suburbia has been a giant exercise in the creation of negative added value. It is this decades-long commitment of resources to living arrangements with fatal structural dependencies that has been destructive of value, and there is a limit to how long we can stave off the day when that will be generally recognized. That is all we are doing in supporting Fannie and Freddie.
The American Way is houses spread all over the landscape with the necessary infrastructure 'improvements. The freeways, the box- stores, the distribution centers, the junkyards and the toxic waste dumps. Stoneleigh is the soul sister of James Howard Kunstler, Kunstler's point of departure is the absolute soullessness of the auto habitat, the brutal dead- ness of it, its inhuman scale, the evil of banality.
Author and cultural commentator, James Howard Kunstler, has called The American suburbs "the greatest misallocation of resources in the history of the world". This grandiose claim struck some as a massive exaggeration when he first made it several years ago. But since then we have seen oil prices zoom up to $100, and US real estate prices have gone into serious decline. Assuming these ominous trends continue, Kunstler's pronouncement will be seen to be correct, and we may be headed towards "the Long Emergency" that he has warned us about. America's investment in the suburbs, will need to be restructured or written off, in order that we can find a new and more sustainable future for our children and grandchildren.
Here's Herman Daly who cautiously suggests there is no free lunches:
With regard to the question of uneconomic growth in theory, we started with a pre-analytic vision. Let's take a first step towards analysis of that vision. The continuous curve represents welfare or marginal utility or the benefits of growth. Q on the horizontal axis is, let's say, GDP. As we go out the horizontal axis we have diminishing marginal utility. I think that's a very fundamental law of economics which is well established.
I've put a dotted curve in the bottom which is the cost of GNP growth - in other words, the social and environmental sacrifices made necessary by that growing encroachment on the eco-system. I've named that a Jevonian view in honour of William Stanley Jevons, a great economist of around 1870 or so, who used that kind of diagram for a different problem but the logic is very much the same. In this diagram what is uneconomic growth? Well, economic growth is out to point B on the horizontal axis. At point B, line AB is equal to BC. The marginal benefits of further growth are just equal to the marginal costs. Growth beyond point B is uneconomic growth. It is growth for which the distance from the horizontal down to the dotted curve is greater than the distance up to the continuous curve, growth which makes you poorer than richer. And so there's the definition of uneconomic growth, growth beyond point B.
I've distinguished several different limits to growth. One is Point B, the economic limit where marginal utility equals marginal disutility. Another is Point E, where marginal utility falls to zero. I've called this the futility limit because when you are there you have so many goods to enjoy you that don't have time to enjoy any of them Consequently, adding more isn't going to do you any good because you can't use all the stuff you've already got. It's just futile no matter how little they cost. The third is Point D, where the dotted curve takes a nose dive straight down to infinity. I call this the catastrophe limit, the ecological catastrophe limit. That's the nice scenario where you invent some marvellous new product which has an unpredicted side effect which absolutely ruins the capacity of all green plants to photosynthesise and suddenly zap. Well, the nice thing about economic limit is that it is the limit we encounter first.
Which is the limit we have been hitting for the past several years. The effects are felt in Fannie and Freddie, the Gulf and cheapskate BP's lethargic efforts to stem the flow of goo and in Greece, Portugal, Ireland, soon Spain then Italy and the rest. Dance as fast as you can, the heat generated might lead to forgetfulness. Who remembers Dubai? Things apparently haven't gotten any better but nobody is paying attention:
Dubai’s sale of a flagship corporate asset has been dealt a blow after prospective bidders learned of an investigation they believe the US Department of Justice is conducting into the business.
Dubai World has been seeking to sell Inchcape Shipping Services, a port and shipping agent, as the state-owned conglomerate seeks to raise cash as part of a restructuring of its $23.5bn of debt. But several private equity groups dropped out of the bidding for the business after discovering during due diligence what they believe is an investigation by the DoJ over its contract to service the US Navy’s Fifth Fleet in the Middle East.
US private equity groups General Atlantic and Carlyle and Canadian pension fund Omers all decided not to submit second-round bids, according to people familiar with the matter.
The world goes broke, the center does not hold, whaddya going to do? The 'Bat signal' has been turned on, but nobody's home.
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Dubai Dominos Fall

SUBHEAD: Dubai's stock market fell by 6% on Monday on new worries about the size of the emirate's debt burden. Image above: To save itself Dubai World may need to sell assets including Cirque du Soleil. Oh, that should do it! From http://www.jmorganmarketing.com/re-inventing-a-lesson-from-cirque-du-soleil
By BBC Staff on 7 December 2009 on BBC - ( http://news.bbc.co.uk/2/hi/business/8398707.stm) It came as Dubai's finance minister said the government would not sell any assets to help the emirate's investment vehicle, Dubai World, meet its debts. Minister Abdulrahman al-Saleh said any assets sold would have to be the property-to-ports company's own. Dubai shares have had a torrid time since Dubai World said 10 days ago it wanted to stall payments to creditors. They finished Monday trading at their lowest level since 22 July. Real estate and banking shares were particularly hard hit, with investors still concerned about the financial sector's exposure to Dubai World's debt. Dubai World has some valuable assets, notably its ports business, which stretches to every continent in the world, including London's Tilbury Docks and France's Le Havre. Other items in its wide-ranging investment portfolio include the luxury retailer Barney's of New York, a list of high-end US hotels, and the Canadian acrobatic circus franchise, Cirque du Soleil. Speaking to Al-Jazeera, Mr Al-Saleh said: "Like any company that has commitments, part of getting liquidity is selling some assets. Of course local or foreign assets." Investors' demands One of Dubai World's first major repayments to bondholders in its property firm Nakheel is due next week. The BBC's Middle East Business reporter Malcolm Borthwick said although the company had asked for a six-month delay, sources had told him that bondholders wanted to be paid off in full and on time. A group representing 25% of bondholders were writing to Dubai World to that effect, he added. What is Dubai World? The emirate's flag bearer in global investments. Has a central role in the direction of Dubai's economy. Assets include DP World, which caused a storm when trying to take over six US ports. Property arm Nakheel built The Palm Islands and The World developments. See also: Ea O Ka Aina: Dubai Commercial Dept Troubles 11/27/09 Ea O Ka Aina: The Dark Side of Dubai 11/28/09

The dark side of Dubai

SUBHEAD: It's the end of The World. Dubai has become market fundamentalist globalization in one city.

 By Johann Hari on 7 April 2009 in The Independent -
 (http://www.independent.co.uk/opinion/commentators/johann-hari/the-dark-side-of-dubai-1664368.html)


 
Image above: The Burj al Arab hotel on an island offshore of Dubai. From http://blog.luxuryproperty.com/new-luxury-development-porto-dubai

 [IB Editors note: this is the concluding section of the article. Please use the link above to read the entire article.]
 
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 $36million 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 somber 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 usable water. None. There is no surface water, very little aquifer, 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 learned 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-colored 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 globalization 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 realized – 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.

Dubai commercial debt troubles

SUBHEAD: Global markets begin to panic on news that Dubai's Commercial Debt situation is not under control after all. [Publisher's Note: These videos have commercial introductions.] Image above: Rendering of proposed Dubai Towers as they would be seen at night. From http://marcus1234.wordpress.com/2009/03/03/dubai-property-crash-update Broadcast on 27 November 2009 on CNBC - Insight on the developing story on Dubai's debt concerns, with Paul Homsy, Crescent Partners CEO; David Rosenberg, Gluskin Sheff + Associates; and CNBC's Simon Hobbs. Discussing Dubai's debt freeze, with Komal Sri Kumar, TCW; David Kotok, Cumberland Advisors; and CNBC's Simon Hobbs.