Dubai requested a standstill in their debt repayments and the markets reacted. Why is it people are surprised this would happen? Is it the unconscious promise that investments would be guaranteed by the oil millions of the country the property investments stood within? It was as though the bubble would never burst. The boom in the UK a few years ago looked very mild and miserable compared to what was happening in Dubai. So many people seemed to be flocking to jobs in a world which appeared as the New Camelot. It was an illusion and everyone believed it. I believed it. My dog believed it. Property kept rising in a land which lay on desert. Property seemed to be selling even when it was off-plan and had not been built. It would then be sold on as rights to the next person with a profit. Do you remember a thing called hire purchase? This seemed to take it to a level of give back purchase.
Money, invisible and intangible money would change hands for invisible intangible property.
Money is often an issue people come to therapy to see me for. Money is an essential element in everyday living but it appears to often be over-looked and ignored. What happens and why we do the things we do with money is so important it affects us first at a micro level (why we buy) then expands to the macro level (what we do buy). What do we have in terms of emperor’s new clothes? The new tower has been built, the tallest building in the world – ‘The Burj Khalifa’ (It was going to be called ‘The Burj Dubai’ before the debt meltdown).
There is a theory that many tall skyscrapers are built before a financial meltdown (It almost makes you want to put off building any large buildings). In 1999 Andrew Lawrence, of Deutsche Bank, published ‘The Skyscraper Index: Faulty Towers’, which posits that economic crashes follow the construction of record skyscrapers. The New York Stock Exchange crashed in 1907, just after work began on the city’s Singer Building and Metropolitan Life Tower. The building of the Chrysler and Empire State buildings was followed by the 1929 Wall Street Crash and the Great Depression. The World Trade Centre, New York, and Sears Tower, Chicago, opened in 1973 — the year of a global stock market crash. The Petronas Twin Towers, Kuala Lumpur, were started before the 1997 Asian financial crisis. Would not building these skyscrapers have prevented the depression and recessions that had followed? The reality is, after all these crises the markets recovered and grew to more then regain their previous market positions.
The over-reaction in the markets has now abated. It seems there will be backing by Abu Dhabi. The initial reaction in the market was to catastrophise. To have the worst case scenario of complete and utter doom. Just as they did when the banks were being rescued. When we catastrophise we do not think clearly and are unable to plan properly. Everyone does that, even Presidents and Prime-ministers. In the end things settle as they tend to do with all of us. It takes time and patience to see through it all. Once again we need to learn how not to catastrophise.