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Old 04-14-2009, 11:16 PM
 
289 posts, read 925,438 times
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Quote:
Originally Posted by tortoise View Post
Related article . . The Dubai Nightmare

Give it until the end of the year. Dubai will be fine. This current lull in oil prices is quite temporary and has had the unfortunate side effect of destroying any new drilling capacity we could otherwise start putting into place right now.

So once demand starts to perk back up -- without any real effort to expand production -- then WHAM! Oil is going to go back to the $150 level we saw last year and even higher. The Arabs will be rolling in money again.
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Old 04-15-2009, 12:10 AM
 
1,347 posts, read 2,111,941 times
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Quote:
Originally Posted by dude66 View Post
Give it until the end of the year. Dubai will be fine. This current lull in oil prices is quite temporary and has had the unfortunate side effect of destroying any new drilling capacity we could otherwise start putting into place right now.

So once demand starts to perk back up -- without any real effort to expand production -- then WHAM! Oil is going to go back to the $150 level we saw last year and even higher. The Arabs will be rolling in money again.
While I agree with your basic thesis, I don't see oil going back to $150 any time soon. First, because the demand just isn't there. The consumer is cutting back in all areas, including driving. Second, OPEC is a den of thieves and has real difficulty in maintaining coordinated production cuts. Lastly, Brazil and Russia are all too happy to fill any production void due to OPEC cutbacks. I do think oil trends higher. I just don't think we see $150/bbl for a good long time.
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Old 04-15-2009, 06:58 AM
 
Location: Here and there, you decide.
11,578 posts, read 22,679,105 times
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i'm going to agree with tony on this one.. $150 a barrel is not coming this year or next year..the american people are cutting back... i used to get mad when gas was $3.50 a gal.. now it ticks me off at $2.00
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Old 04-15-2009, 08:37 AM
 
815 posts, read 1,749,713 times
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I fail to see how $150/bbl. oil is going to stop the slave exploitation of workers in Dubai.
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Old 04-15-2009, 08:53 AM
 
Location: NW Las Vegas - Lone Mountain
15,756 posts, read 32,491,985 times
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Dubai itself has little remaining oil and gas. The UAE does but most of those reserves are not in Dubai.

Dubai makes its living in other fields and has been trying to establish itself as the commercial center for that part of the world.

It is probably hurting worse than Las Vegas in the present economic problems.

I would also agree that the worker exploiting is common through the ME and is a substanitial problem in a downturn.
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Old 04-16-2009, 01:17 AM
jpk
 
Location: Redmond, WA / Henderson, NV
531 posts, read 1,608,019 times
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olecapt is right, Dubai is in worse shape than Vegas. Which is why I think it's Dubai World more than MGM that is putting City Center at risk.

Dubai has been getting massive loans from the rest of UAE to finance it's commercial real estate extravaganza. Dubai doesn't have enough oil of its own to fund the local boondoggles its built, and it tried to get into Las Vegas boondoggles on top of it all. Only thing worse would be if MGM was building a MGM Grand Dubai right now.
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Old 04-16-2009, 01:55 AM
 
391 posts, read 1,582,862 times
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Well, Colony Capital broke off negotiations for some $750M for a 20% equity stake. By my calculation, that would have been about 44cents on the dollar.

We'll see. They have their own problems with Station Casinos, but if MGM is unable to sell any properties I don't know what other options they have. I'm sure Dubai having a 50% stake complicates things since they are technically in default on their obligation, but suing MGM for breach so I'm not sure how this plays out.

The other interesting aspect is that I don't believe a CityCenter default triggers default at MGM. So you have to look at their incentive here. They likely end up managing the property for about 20% of the profits even if someone else owns it through bankruptcy, and then keep their other properties. So there is not a lot of incentive there to give up equity at firesale prices. And the hang-up with Colony could very well have been negotiating a buy-out down the road which is a way of retaining some of the upside, but I'm speculating.
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Old 04-16-2009, 05:51 AM
 
Location: Beautiful Upstate NY!
13,819 posts, read 24,553,036 times
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Why buy the milk when the cow is about to become free?
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Old 04-16-2009, 06:40 AM
 
Location: Here and there, you decide.
11,578 posts, read 22,679,105 times
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i think mirage wants dubai out anyways.. if dubai doesnt pay, they may lose everything they invested
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Old 04-16-2009, 12:57 PM
 
Location: Beautiful Upstate NY!
13,819 posts, read 24,553,036 times
Reputation: 7615
CityCenter was supposed to be a Crown Jewel, not only for one of the most successful gaming corporations (MGM-Mirage), but also for the city of Las Vegas, itself. It now has the momentum and power to not only bankrupt that company...but to also leave a huge black mark on Las Vegas' planning for the future.

You gotta admit, though...you can't beat Las Vegas for its drama. In a city with a relatively young history (100 years), and one built on opposing stories of huge successes and huge failures...this one has to go down as one its biggest mistakes.
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