Monday, November 12, 2007

The Stallion Prospects were Bargains!

Much has been spoken about the Sheiks of Dubai and their major investments in horse flesh this year. Street Sense, Hard Spun, Any Given Saturday, Authorized, et al. Our exasperation is predicated on our own concepts of money as a limited resource. For these gentlemen, who don't exactly worry about how they are going to make next month's rent, the number of zeros in a price tag is less startling.

For instance, an Airbus A380 costs more than $300 million. Well, Emirates Airlines, owned by the Maktoum family, purchased 11 of them yesterday. They also ordered 70 Airbus A350s costing about $160 million each , and 12 Boeing 777s costing $250 million each. Total value of the orders - more than $38 BILLION DOLLARS!

I know that this is a corporation making long-term capital investment, but it is not hard to pierce the corporate veil when it comes to the Dubai ruling family. Their personal wealth is tied directly to the wealth of the nation and it often seems that the bank accounts are commingled.

In this persective, a few hundred million in breeding stock doesn't seem too bizarre to me. I guess we should expect all of the Emirates advertising to continue as the boys try to fill the seats on those sweet new jets.

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