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Tuesday, December 8, 2009

Brainstorming Wednesday - part 1

1. Guess who comes to save Dubai - Rothschild himself got the mandate ( a Turkish newspaper had reported that Jewish forces plan to take over Dubai within 10-15 years ). That's is like hiring the wolve to see after your sheeps. The collateral for the first tranche of Nakheel bonds due in a few days is a huge pile of sand which is only a lease for 66 years - absolutely worthless in my book. Now that even the Dubai guaranteed units ( Dubai Electricity & Water Authority) are at junk level the liquidity crunch on overall Dubai gets into a more severe situation.


Rothschild Names Sawko to Head Middle East Investment Banking

By Serena Saitto

Dec. 9 (Bloomberg) -- NM Rothschild & Sons Ltd., the family owned investment bank advising Dubai World on its debt restructuring, appointed Herve Sawko as its head of investment banking in the Middle East.

Sawko, 43, who has 20 years experience in corporate finance, mergers and acquisitions, financing advisory and equity capital markets, moved to Dubai from New York, where he spent three years working on cross-border transactions.

Rothschild, which employs more than 20 bankers in its Dubai and Abu Dhabi offices, intends to expand in the region, Sawko said in an interview.

“Our business in the Middle East has grown exponentially and we are optimistic about the prospects for further development,” Chairman Baron David de Rothschild said in an internal memo.

Sawko, a French national who spent 17 years with Rothschild mostly in Paris, will work with the head of mergers and acquisitions for the Middle East, Michael Helou, and with Paul Reynolds, regional head of financing advisory.

Dubai World, the state-owned holding company in talks to restructure $26 billion of debt, said last week it retained Rothschild and hired Moelis & Co. as its financial advisers.

2. As I stated in earlier posts fundamentally the rise of the EURO is not based on any fundamental facts as the EU has as much problems as the USA with the complete Eastern part of members are potential default cases as we do see now by the case of Greece plus smaller countries like Ireland are at the brink to become the next Iceland. All the fundamental rules as that borrowing shall not be above 3% GDP has been violated for years and is now just a pathetic joke in retrospective. The Dollar is weak because America wants it to be weak against all public statements of officials as it reduces the trade imbalance and gives a competitive edge. I am astonished that Japan and Europe have tolerated that but in case of Europe the fact that they do not speak with one voice makes them a weak competitor. We will see a final wave of Dollar weakness early in 2010 before a big Dollar recovery will turn the overall trend . The second stage oft the overall crisis will be protectionism as the stimulus measures will not achieve the come back of a 'regular economy' pace. The results will be the fade away trade of globalisation but that will occur after a short covering wave for the Dollar carry trade as markets will drop in 2010 sharply.

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