BLOG: Dubai learns lessons fron Dad's Army

By Alistair Houghton on Nov 30, 09 03:12 PM

Blogger Dougal Paver on how a calm word in the ear stopped Armageddon in its tracks

LAST week closed with the sure and certain belief that the world's economy was coming to an end - for the second time this year.
The news that Dubai's leading state-owned property developer, Nakheel, was asking to defer payment on its multi-billion pound debt pile sent the nay-sayers in to a frenzy of doom-laden predictions.

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Like Frazer from Dad's Army, however, the predictions were quietly ignored. The world's stock markets opened up on Monday morning and life continues along its merry path.
The calmness is all down to some good communication. The central bankers in UAE had let it be known over the weekend that they would provide the necessary liquidity and intervene, where required, to ensure there were no corporate crashes. Continuation of stout party.
For those who pay no heed to the stock market it provides a helpful reminder of just what a relatively unsophisticated gamblers' den it is.
Mere sentiment (not fact) can drive share prices up and down like a yo-yo, sweeping all before it irrespective of worth or performance.
Odd then, that a different type of communication - calm and authoritative - can have such a beneficial impact. Would that that were always the case.

Dougal Paver is managing director of Paver Smith in Liverpool