Many, if not most of these senior-level managers took the leap and bought super-expensive houses and condos when they left for Dubai 2 years ago, at the peak of the Dubai bubble. Dubai real estate is now cascading down a cliff, where I think it will crash down a full 90% from peak value.
Put yourself in the shoes of a Halliburton fatcat. The asset they bought via an onerous mortgage for, say, $2 million, is now worth two thirds what they paid. The value of that asset continues to bleed. In most of the world, the options for the Halliburton fatcats are civil in nature, at most involving foreclosure. But as we've learned over the past week, in Dubai they will stick your ass in jail if you welch on a debt. New York Times:
“I’m really scared of what could happen, because I bought property here,” said Sofia, who asked that her last name be withheld because she is still hunting for a new job. “If I can’t pay it off, I was told I could end up in debtors’ prison.”These Halliburton fatcats have two options: They stop paying for these anchors around their necks and either flee or go to jail. Or they continue paying millions for a dead asset and stay in Dubai. Dunno about you, but if I was rich I'd cut my losses and move back home.
Deutsche World provides a glimpse. What you are seeing is a sea of empty skyscrapers and a population headed back home. The saddest part of this video is at 3:38 when we see the construction workers line up for the buses, knowing that they will be deported within weeks to Crapistan with no money and owing thousands to the violent predators they borrowed from to get to Dubai.
Future economic activity in Dubai will consist of movie making, as the ghost city of Dubai will make a splendid set for movies such as I Am Legend 2.