By now you've probably seen headlines like "Dubai defaults on 150 billion dollar debt". One interesting thing I seem to be picking out of the news is that Dubai structured these deals so shell companies like Dubai World took out the mortgages, not the government itself, so the only option the lenders have is to foreclose on the properties in local or Dubai courts (snort!). At which point the lenders hold the keys to large empty buildings and vacant lots with half-completed skeletons, *if* Dubai even bothers actually giving them the keys. It makes you wonder WTF these lenders were thinking, because the paper they’re holding explicitly states that the mortgages are *not* backed by the income of the government of Dubai, indeed states no source of income at all for how the loans are going to be repaid. It’s like the whole liar loan fiasco here in the USA, except writ large with international banks!
– Badtux the Amazed Penguin
(but who should not be so amazed by financial institution stupidity by now, I suppose)