We wrote recently about the “my building is bigger than yours” war between Saudi Arabia and Dubai. Now Moody’s Investors Service reports that Dubai may need help from Abu Dhabi to finance the borrowing that led to, among other things, the construction of the Burj Dubai, their first record-breaking unnecessary skyscraper. Dubai promptly denied the allegations, of course. [Bloomberg]
All things considered, this is the market equivalent of taking Viagra and trying to hide it.
A Saudi Arabian prince announces plans to spend 26.7 billion dollars to build the tallest building in the world, over 1 km high. Not to be outdone, Dubai, which currently holds the record, also says they plan the same. [CNN]
Look here, this is getting a little insane. There hasn’t been some sort of a major materials engineering breakthrough. What has happened is a massive accumulation of capital in the hands of a few people that collect rent on minerals extraction.
But this is at least a whole order of magnitude smaller than the amount of capital that Americans burned on housing. Three hundred million idiots are better than one.