Dubai - November 13, 2007
You would not think looking around here that the world will run out of oil wealth anytime soon. Prince Alwaleed Bin Talal, the Saudi named thirteenth richest in the world among billionaires (says Forbes), just became the first individual buyer of a Boeing A380 superjumbo. I have to wonder if this is a sign of a market top?
Please note that the "Flying Palace" configuration, for which the Prince has paid an undisclosed amount somewhere north of $300 million, has enough floor space for two tennis courts (it can hold 800 regular economy passengers if built to pack 'em in). Rising oil wealth is good for airline sales, as the Gulf Arab states have stepped up to buy about $80 billion worth from Airbus and Boeing, with 70 mid-sized A350s and 11 A380s going to the Dubai-based Emirates.
I just arrived on an Emirates flight from JFK to a McKinsey conference as their guest to speak about the utility of scenarios in contemplating rising global uncertainty. A review of the last month's Financial Times headlines during the flight (you've got 12 hours to play with) suggests that CEOs feel more uncertain than ever about the state of world markets, partly driven by US real estate woes - not to mention the ailing dollar, $100-a-barrel oil and querulous comments among Chinese central bankers who dislike weakening currencies they hold a ton of and can't easily sell. Blackstone just acknowledged amid record losses that it doesn't know "where the sub-prime black hole will end."
To look around Dubai, the world capitol of construction cranes and posh planes (my Emirates business class seat not only would stretch into a bed, it had four styles of internalized vibration massage with touchscreen control, and its own 20-inch TV screen - a wonder I got so much reading done), there is no end in sight of black gold, and the things that money will buy.
Meanwhile, non-oil states have to contemplate futures where the oil price rises as the dollar declines, and many arrangements will not be as they were before, perhaps radically. I wonder if the Prince buying his own jumbo jet is perversely suggestive that there might be an end to oil after all, as recently argued by oil experts on the topic. This is probably not on the mind of too many others here at the Jumeirah Beach Hotel, a wonder of luxury on the shores of plenty.
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