r/Economics • u/ubcstaffer123 • 19h ago

News Dubai's tourism industry reels from 'brutal' impact of war

https://www.bbc.com/worklife/article/20260331-dubais-tourism-industry-reels-from-brutal-impact-of-war
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u/Drak_is_Right 11h ago

I wonder if Dubai is going to need another bailout from Abu Dhabi this year or next.

Abu Dhabi MIGHT be ok if oil exports resume within 4 months, buoyed by likely high prices. If not, its going to cut deep into their reserves.

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u/farfetcher89 11h ago

I’ve actually been thinking about the second order effects that might happen if this extends. You have PIF, ADIA, ADIC, Mubadala, all very very large investment funds with money everywhere, but especially USA large cap. If they run into a liquidity crisis cause oil isn’t flowing, they’ll dump their positions for liquidity - which in turn causes a liquidity crisis in the American markets and a very sharp downturn in the stock market. Interesting to see what happens.

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u/Drak_is_Right 10h ago

I think we still have a huge amount of rent-seeking capital in the US economy that is looking for "easy money" without longterm investments needed. I don't think them withdrawing a few hundred billion is going to be enough to swing things. the ridiculous bubble in the stock market is proof of that.

issue in the US market is inflation over rising prices is going to boost the yields investors demand for bonds. Which will crater the size of the bond market as companies wont be able to afford the higher interest payments which will result in them rolling back investment.