MUCH ABU ABOUT NOTHING

Ok, really cheesy as my daughter-in -law would say. But this thing in the Gulf is a real kick. Right out of Arabian Nights.

Once upon a time there were two Sheiks who were cousins from the marriage of convenience of two families why the heck back when. One sheik wound up growing up and eventually becoming the ruler of a sheikdom which has more oil and gas than any 10 square mile place on the face of the earth, The other guy, though just a hop, skip and a jump away would up with sand. Sheik #2 was a fun-loving guy, however--none of that stay away from booze stuff for him (three wives were ok and a bit on the side worked)--and he had big ideas. You see, he figured out that there was in fact a sucker born every minute and when you couple that revelation with the fact of many of those suckers had access to more money that they ever dreamed possible, you could have more fun than a herd of camels...assuming camels have fun which given the way they look and smell is hard to believe.

#2 was a pretty shrewd guy when it came to politics as well and he also figured out than unless you lived in the neighborhood he and the other sheiks looked pretty much alike to those people who were known as bankers and investors and who had all this money, but more importantly they also believed that the mutual interests of he and his cousin and all the other sheiks in the area were the same and when it came down to the good and dirty it would be all for one and one for all.

He was also a pretty good salesman. Now a while back I had wise old banker say to me, "Charlie, one day you're going to meet a guy who will tell you he can put 2 pounds of crap into a 1 pound bag and if you believe him, you are going to have 2 pounds of crap all over your boots." #2 was that guy, and sure enough, a lot of people believed him, and to be honest he probably believed himself. Anyway, he talked these bankers and investors (let's call them yield whores...oh hell, whores will do) into lending his little plot of land (called Dubai by the way) more money that Allah ever had to build a dream world to include a snow-ski jump in a place where the average temperature is about 92F. on the theory that build it and they will come. And come they did, fueled by the most incredible increase in world-wide liquidity anyone had ever seen and they kept coming until...the money stopped in far off places like New York and London and Zurich.

At this stage the whores had a problem 'cause Bernie Madoff had nothing on #2 and his boys. This was a Ponzi scheme to end all Ponzi schemes 'cause if the people stopped coming to fill up all the space #2 had built there was Zip there to service what the whores had lent. At first, there was little worry because the conventional wisdom was that the entire region was interconnected and the guys with the REAL assets wouldn't dare let one of their own collapse. Problem was no one took account of human nature, and as I keep saying in the end it is all about people, and in this case the other people--especially #1--had been quietly seething at the antics of # 2, so when a few of the whores asked #1 and his boys whether they were standing behind #2, jolly good show, brothers in arms, blood is blood and all of that, turns out #1 said, "Think again."

Horror and disbelief. One shakes one head and asks one's self, "Will they never learn?" The answer is apparently not. The good news for The Suit and Helicopter Ben is this one isn't on their watch; it is very much a European banking problem with the Brits having a substantial part of the action. But as we have all learned, oceans do not protect us from actions in some far away place and the repercussions of this in Europe may well affect us at some later date. Do I believe that this will be the case. Actually, no. Folks who know a lot more about this than I say it's really #1 trying to teach #2 a lesson and that some accommodation will be reached. Me, I'm more of a cynic. I suspect the fact that #1 and his buddies have all of their PRIVATE money with the folks who are the creditors of #2 may influence them to be of some assistance before bad things begin to happen to them. Then again, it's the Middle East. Inshalla.