Monday, March 8, 2010

San Antonio, Texas and Dubai

I haven't posted much as I have kept my journal and thought I'd write the old stuff first to get the flow right but realise if I don't post contemporaneously I'll always be catching up so I'll do the contemporaneous post and a back post at the same time so that I can catch up.  So on to the first post.

Vivien and I just finished a weekend camp at John Newcombe's tennis ranch ( which he classes as a mixed fantasy weekend as it includes not only himself but also other tennis greats from the past -- Ross Case, Owen Davidson and the incomparable Roy Emerson.  The format was the people who showed up were split into 2 teams: the Wallabies (Newk & Snake) versus the Kookaburras (Emmo & Davo) and played matches in 3 sessions for bragging rights.  Newk's team have the eye at the moment over the years this weekend has been going and it did seem that the team selection night put the younger and more athletic attendees in Newk's team.  I presume it was the equivalent to home court advantage.

Getting there was an endless 36 hour trek door to door from Auckland via Sydney, Los Angeles, Dallas/Fort Worth and only umpteen hours later San Antonio.  Vivien and I were pretty worn out by this time but still had time to pop into a nearby restaurant called Texas Land & Cattle ( for a Texas rib-eye and some very nice barbecued ribs before bed (plus of course the obligatory Tom Collins).  This was lucky as we were able to sleep before rolling straight into some by now very unfamiliar tennis.

The camp itself is just outside San Antonio and interestingly enough some people from nearby were attendees as well as the rest of us from elsewhere.  Format early on was typical enough -- evaluation and some practice with the ranch pros and after a bit of shaking the various player "levels" were assessed.  Emmo in the past had told me it took him about 3 hits and 20 seconds to work this out but I guess he's that good it would do.  I did like the free beer at the end touch though as it was thirsty work and this carried on through happy hour until the group straggled in to dinner and wine at the table.  Food was great but it has to be said that the best bits for me were when the Legends sat down on stools at one end of the dining room and told stories.

Davo had just found out that he'd been inducted into the tennis hall of fame for his 13 mixed doubles grand slam doubles titles (including a grand slam of titles) so was feeling pretty good and so it proved great fare for micky taking by the other 3 guys.  I do wish they'd spend more time on stuff like that.  We're all tennis players so its an audience who wants to hear these stories and the time seems to fly by at times like that.

The actual matches were from my perspective less than startling as my partner Dave from San Francisco and I got well and truly thumped although Viv did win her match which turned out to be unusual as the team went down 7-4 in the opening round.  Emmo and Davo at the time were sympathetic and encouraging although a day or so later did say we were all pitiful, in the best possible way of course.

I did say earlier that the food was good -- first night steak & lobster, second night great fish, last night Texas barbecue.  And always salads.  I'd felt that I'd not eaten enough greens in the previous 2 months on the road but I sure put that right!  And also there is a very healthy party atmosphere surrounding the place too which we enjoyed very much.  And why shouldn't there be as we're all there on holiday?

The 2nd and 3rd round of matches were better both from my perspective as I won both matches due to my partners it has to be said (Margo from Cincinnati in mixed and Alan from Galveston in men's) -- as Davo said doubles is all about picking the right partner -- as well as the team as we went down "only" 7-5 in the 2nd round and drew the 3rd round.  Viv won one and lost the other in a 3rd set tie break.

All in all a great time as we also met some great people too.  We always do so this is nothing new.   Great weekend and thoroughly recommended.

San Antonio is an interesting town and on our way out to camp and back in today I was wondering what the reason was for San Antonio existing.  I asked the locals at the camp and the best answer they could come up with was tourism but that makes no sense as there really is nothing here at all.  Having driven across vast tracts of nothingness in Western Australia I feel I am an expert in knowing what nothing is and there's sure nothing here to bring people in.  But that obviously isn't entirely right as the place exists and I did read on a plaque on the Riverwalk that the Spanish arrived in 1691 on the San Antonio river and built a settlement there.  In time it became a crossroads town meaning it had little real reason for existence other than being on the way from here to there, wherever here to there is.  The brief history note in the hotel's welcome package says the Spanish built the walled Alamo mission here as a safe compound presumably from the local Indians and it was the capture of that by the rebellious Texans that pushed it into prominence.  The Mexicans who won that battle actually viewed it as a relatively unimportant incident but the Texans clearly didn't as they prevailed in the end (full history lesson coming tomorrow).  It seems to me that San Antonio exists today in the way it does as it is an army town and whatever else is here came from that.

The Riverwalk is a really neat place though.  In the 1920's a town planner with vision (sadly a rare commodity) recommended its layout and it was actually done so is a real downtown feature that is worth visiting.  Vivien and I walked around the inner circle and found a Tex-Mex (I think) restaurant for dinner.  I do wish I knew the difference between Tex-Mex and "real" Mexican whatever that is.  Anyway we have 2 weeks or so in this part of the US to go so will doubtless get some education.

And now Dubai.  This was over 2 months ago now that we spent 6 days there, 5 with friends late of Bermuda and one a day and night of extreme extravagance in the Burj al Arab.  This is the essay I did for my company, BIAS (  It is meant as an overview for those who've never been to Dubai and want it short and sweet.  It was a fascinating place but totally beyond my comprehension which is probably what comes through in the essay.  The people bits that should form part of a travelogue I will leave till later as I will talk of the absolutely unbelievable (and I use that over used word for a very real reason, it is unbelievable from start to finish).  If you don't believe me take a look at

If you haven't visited Dubai and have your own views and observations on the very interesting place, fear not.  These are mine.  It is in a nutshell an Alice in Wonderland kind of place.  The scale of the developments and the monies needed to put them together in the timeframe planned go beyond belief.  The neighbours in Abu Dhabi have both oil and a staggered development plan on their side and will probably succeed whilst I believe Dubai will not succeed in completing their plans.

When oil was discovered in Dubai in the 1970's there were 57,000 residents, 10 years later there were 300,000 and now 1.5 million.  Oil contributes less than 7% to GDP so to all extents and purpose the developments were all funded by hope and the expectation that foreign syndicated bank loans would help them build everything quickly.  As we all know the easy cash disappeared (and Deutsche Bank and a couple of big French banks plus HSBC are trying to work out how to get their money back as I type) and it was only Abu Dhabi's $10 billion (the main part of the UAE of which Dubai is but a part) that kept the wolves from the door.  The immediate price to Dubai was the renaming of the tallest building in the world from Burj (meaning "tower") al Dubai to Burj al Sharifa after the ruler of Abu Dhabi.  This must have been pretty galling.

However the $10 billion is but a drop in the ocean to the $80+ billion involved in the default by Dubai World whose status is akin to the US government's agencies Freddie Mac or Fannie Mae, an agency and with an "implied" backing from the government -- this "implied" backing was not forthcoming from Dubai's $400 billion sovereign wealth fund.  So the lenders are all in discussions and all building has ground to a halt and in the words of one person I spoke to in the construction industry there "100,000 Bangladeshi construction workers have been sent home".  Certainly all building work when I was there had ceased with only a few people evident on a few sites mainly connected with road and bridge building kind of infrastructure development.  That means that of the many hundreds of towers under construction -- and I do mean many hundreds -- probably more than half are in varying stages of completion with one or more of those very tall construction cranes stuck on the top of the building.

I think it was the sheer scale of the development that amazed me most.  The Hong Kong skyline is full of towers, but they are mostly in the 30-40 floor category.  It seems that whoever planned Dubai's development looked at Hong Long and said that's what I want here but also said "forget 30, lets start at 70" and planned for 15 million people by 2015.  I drove away from the shore into the desert and was amazed to see that the development called for 6 or 7 parallel roads 15-20 miles apart into the desert where all new cities would be located -- including Dubai World, a 3 billion square metre development that would dwarf Disney World by a factor of I think 10 -- with names such as Internet City -- for tech companies with numbers of high rises -- Motor City, Sports City and I think a dozen other themed Cities.  The friends we stayed with had bought a condo in Sports City 3-4 years ago which boasts a cricket stadium (finished), golf courses, football stadia, tennis stadia, etc (all incomplete) but whose overall state of development was about 50% complete.  Their expectation is that completion will be around the middle of the century and interestingly the financing they obtained started to require service at the time of the original completion date, not the actual completion date.  So they are servicing debt on an obligation for which the collateral won't be available for another umpteen years -- little wonder there are quite a few people walking away from their incomplete luxury condo purchases.

The master plan calls for 10+ years more hectic development at least.  The problem is of course financing.  This has evaporated and with the prospect large in lenders' minds of a default, I suspect that funding will be very sticky for years to come.

This leaves Dubai in the position of having magnificent designs that are underway but at best half completed all over the place.  Everything that has been considered and built, has been of top quality and to an incredible scale but the harsh reality is that:

1) they have run out of cash and the ability to borrow the amounts needed to complete the plan
2) the designer name brand stores have nobody in them buying
3) the completed buildings have few tenants
4) the complete condos have some new owners but there remains huge inventory
5) more than half of the development is incomplete with little real hope of completion anytime soon

Dubai is looking to create a tourism and business magnet for the region.  The plans focus on this.  The country has few if any other natural resources left to fall back upon.  Some tourists (like myself and my wife) of course visit.  Some high profile names (including Roger Federer and Raphael Nadal) own property there.  Richard Branson is rumoured to have bought the UK in the grandiose "World" project.  All fine and good but the numbers are simply not there to make it all work.

I expect to see incomplete building sites for many years to come.

Actually it reminded me in a certain way of when I worked in London before coming to Bermuda in 1985.  I worked for a merchant bank (aka investment bank in current terminology) who had 15 years worth of Latin American debt from the 1970's and again (incredibly) from the 1980's -- its true those guys NEVER learn -- and the Dubai debt position reminds me incredibly of that time.  Primarily bank debt.  Primarily vague and waffly ideas behind the lending.  Multiple year work outs -- in passing the Latin American debt my bank had in the 1970's is still in process of being worked out today.  Yes, they've reserved against it and No the borrowers haven't repaid a dime.  My expectations are similar this time around too.

By all means visit the country.  It is incredibly fascinating and boasts -- according to them -- the only Mosque that allows non-Muslims to visit and actually go inside.  The tour guides incidentally when I visited were both women, one with a South London accent and the other an Aussie.  Stay in one of the many extraordinarily plush hotels and enjoy the wonderful Asian service.  But do tread warily if you're thinking of making an investment in anything other than the gold jewellery to be found in the gold souk in Dubai City.

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