November 6th, 2009
01:02 PM GMT
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Warren Buffett voted with his pocketbook this past week, investing $26 billion to purchase Burlington Northern Santa Fe. It is one of America’s oldest railroad networks and the backbone that helped build the country. 

The Oracle of Omaha - as Buffett is fondly referred to due to his Mid-Western roots in Nebraska - is also big on animal instinct.  The concept is simple: we all need to be aware to both survive and smell opportunity when it beckons.

In that spirit, Buffett is probably letting economists debate the merits of whether this is a V shaped recovery, a sharp downturn and straight line back to growth or a recovery that reflects a W, where the economy recovers, dips and bounces up and down for a few years. 

Maybe I am a child of the 1960s, but my fond recollection of those letters has more to do with the VW Beatle that headed to the beaches of California, not illustrations to guide economics.

In October, my three visits to the Middle East, which included Dubai, Qatar and Abu Dhabi during the Formula One festivities and the launch of our regional hub in the UAE capital, led me to put aside traditional economic research. 

Instead, I relied entirely on animal instincts and, going back to my Greek roots, I used the agora to get the latest reading of what was happening.  Bankers confidently said that the road show to raise $6.5 billion in Dubai would be well received.  The first portion of that offering was three times oversubscribed.

Businessmen noted that they felt the worst was over in the local property market and that foreign buyers had started to show interest again.  Colliers International released figures this week indicating that prices rose 7 percent in the third quarter, although they are down 47 percent on the year.  Again, the figure does point to a bottom being reached.

In Qatar, despite the bottom following out of the natural gas market (trading one-fourth the equivalent of crude prices right now), the economy is hardly suffering amid the “recession” as growth has reached 8.5 percent this year.  The greatest challenge is completing projects on time and allowing the market to catch up with all the construction.   

Finally, the Formula One race looks to be only a starting point for Abu Dhabi. I was surprised enough at the $40 billion officially spent to build up Yas Island and the infrastructure around it to host the circuit.  According to Economy Minister Sultan bin Saeed al Mansouri that is only the beginning.

He says that the Yas Marina complex will be a blueprint for future developments with an eventual commitment of $1 trillion dollars - for roads, power plants and rail links.  That is an eye-popping number that others within the government were, shall we say, shy to commit to, but it does give a sense of how the old economy will help build the new one and how the future won’t be measured by a V or a W in the region.



soundoff (4 Responses)
  1. Per Holmlund

    If we are talking the new the question should bee: Will it be a N or a M? In the old world we are seeing the end of a financial mega trend. The new world still in an industrial mega trend.

    November 9, 2009 at 7:24 am |
  2. Grammar Screw Up

    despite the bottom following out

    fail.

    November 16, 2009 at 1:28 pm |
  3. icon package

    You will not prompt to me, where to me to learn mlre about it?

    hpixel

    September 22, 2012 at 11:48 pm |
  4. icon pack

    You have missed the most important.

    October 9, 2012 at 12:34 pm |

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