Just a quick post today...

Just under one year ago I wrote a blog post:

August 13, 2008 11:26AM

No Brainer Trade: Short Dubai in August 2008

By Cody Willard

I was surprised to see a seemingly bearish headline about Dubai in the WSJ’s property report today.   After all, it was just a couple weeks ago that another mainstream media property, 60 Minutes, did it’s love-fest profile of all things Dubai, including loving their monarchy that violently represses its owns people’s property rights while exploiting and oppressing the immigrants coming to the country to work.

Alas, the WSJ wasn’t bearish on Dubai real estate at all — they warn that those idiots trying to control Dubai’s economy from the state are now “homing in on effort to cool red-hot property market”.   Yeah, the paper goes on to speculate that “prices are expected to fall 10% by 2010″.

Dude, lemme tell ya something.  When you’ve built an entire island and have convinced repressive billionaires from other regimes to buy up the properties EVEN THOUGH NOBODY HAS OR APPARENTLY EVER INTENDS TO ACTUALLY LIVE ON THE ISLAND…well, that’s an even bigger bubble than the US real estate market got itself into.

Dubai is a collapse waiting to happen.  Real estate prices in Dubai will be down more than 50% by the end of 2010.

On Happy Hour yesterday, I repeated to Pam Leibman, the CEO of giant NYC real estate agency, Corcoran, that there’s never been a better time than now (well, six months ago) to sell NYC real estate. NYC’s real estate might be a great short opportunity right now…but it’s nothing compared to the sweet set up of Dubai’s pending bubble pop.

Indeed — shorting Dubai real estate in August 2008 when 60 minutes is fawning over the place is probably about as good an opportunity as shorting US real estate when Time Magazine was explaining to us “Why We Love Our Homes” right at the top in July 2005.

Fade the mainstream media.  Fade the repressive central powers.  They can’t stop the revolution (another of my trademarked terms, btw).

But we can profit off their centrally-created bubbles when the free market forces that always reign start to let the air out.  I’ve been saying that betting on higher rates is the no brainer trader for the next couple years.  Even no brainer-er is shorting Dubai when it’s blow off top is being heralded by the mainstream media and the world.

Well, here it is just 11 short months later...and the middle section of the Financial Times today says:

As the global financial crisis hit the Gulf’s most globalised economy, the services industry buckled amid a property crash, forcing the proud emirate to accept a $10bn bail-out loan from the central bank. Now the race is on to put Dubai on a more sustainable footing, managing repayments on the emirate’s $80bn debt pile and reviving business confidence.

The twin issues of debt and falling property prices will act as a drag on Dubai’s recovery. However, amid the turmoil, Dubai retains an advantage: no other city in the Middle East has the gumption or the infrastructure to act as a services hub for the rest of the oil-rich region, which is expected to rebound from this global recession faster than other areas.

It remains as yet unclear whether Dubai can scale back its ambition and make the necessary reforms to capture victory from the jaws of defeat.

Well, the FT might be unclear about whether or not Dubai's gonna be okay in the next year or two...eh huh.  Dubai's still doomed even if a part of the pain has already been priced in.