Dubai FUBAR

Dubai had gone hog wild with unimaginably expensive and downright silly investments in dream city real estate projects which are now turning out to be the mirage one could see shimmering over the sand dunes all along.
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I suppose that building a gigantic indoor snow skiing facility in a desert sheikdom as the outdoors bake away at 120 degrees Fahrenheit (And that is in the shade if you can find any) has got to be a fabulously profitable idea. Wonder what the lift ticket costs. One has to wonder if the motive for building the world's tallest building in such an inhospitable environment (Just think of the cooling costs) was profitability or plain megalomania. Did the investors realize that as "partners" with investments that pay no interest they may also be responsible for the losses?
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Well, the way it works (even for the peanut issues) is that under Sharia laws you can still issue a note of indebtedness, sovereign bonds and take up loans, but instead of the usual formula of getting a percentage of interest payments and installments of principal plus interest over a set period of time, you get instead, a "participatory interest" in a specific project for which the loan is to be granted. A bit convoluted. Does it work? Not really.
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Roughly speaking, under islamic law, lenders and borrowers are quasi partners. Very roughly speaking of course, because there are some further devilish details.
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It is simply money loaned on faith.
No big deal. I know lots of people that loaned out their money on just faith and belief and got hosed right here close at home. No need to go to Dubai for that.
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Actually there is no legal recourse to collect by investors. The islamic underlying rule for a Sukuk bond is that investors are partners and therefore must accept the losses since there is no guarantee of profit. Unbelievable as it may sound to western ears, a promise to pay back capital is against islamic rules. Yup, the unbelievers have been left in utter disbelief.
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Although islamic law considers non payment of a debt a crime and Dubai does not have a bankruptcy procedure, a scapegoat has been set up. His name is Aidan Birkett, a partner in Deloitte.
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Frankly I can't see how he will manage to put lipstick on a swinish bond that has neither interest nor any credit rating whatsoever.